Europe wants to block UK wind farm subsidies

January 3, 2014 by  
Filed under Green Energy News

“The commission has been making pretty clear that it’s moving towards saying
that these industries are mature and state aid won’t be allowed,” he said.

Although Conservative ministers sometimes criticise the EC for its
interference in domestic matters, they are understood to be keen to
cooperate in the case of renewable energy subsidies.

“I never thought I’d say this but the commission is absolutely right about
this,” a Conservative minister said.

“It’s absurd that taxpayers are being made to subsidise wind technology.”

The operators of onshore wind turbines get subsidies that increase the price
they are paid for the power they generate.

Wholesale energy prices are typically about £55 for a megawatt hour of power.
But onshore wind generators are paid about £90. Ministers have started
reducing those subsidies, cutting tariffs applied to household bills and
slashing guaranteed prices for onshore wind.

But pressure from the EC is expected force the Coalition to introduce a less
generous system of support for onshore wind and solar power.

That new regime, which could be in place in less than two years, will see wind
farm operators competing with each other for a share of a reduced pool of
public subsidies. Ed Davey, the Energy Secretary, said earlier this month he
was preparing to announce that onshore wind and solar farm developers would
be forced to compete to secure government subsidies.

The commission is expected to announce the results of a review of support for
renewable energy as soon as later this month.

Despite British enthusiasm for reducing subsidies, politicians in other EU
states may resist pressure to withdraw public support for renewables.

Connie Hedegaard, the EU’s climate action commissioner, said the eventual aim
was the end of state aid for wind power. “One of the things Europe has to do
better is how we subsidise renewables,” she said.

“That is why the commission is reviewing state aid guidelines for energy,
including renewables.”

“My view is that if you have mature technologies, renewables or not, they
should not have state aid. If they can manage themselves why have state aid?”

Policy Exchange, a think tank with close links to the Conservatives, has
called for steep cuts in subsidies, which would eventually reduce household
bills.

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