Onshore wind farm subsidies will be cut

December 4, 2013 by  
Filed under Green Energy News

However the final figures that will come in a written ministerial statement
will represent major changes.

The change is necessary because there has been so much investment in onshore
wind and solar energy that they no longer needed so much state support,
Sources from both coalition parties said

In contrast, they said, offshore wind sources still needed more subsidy to
encourage long-term investment.

One Conservative source told the BBC he expected “quite a dramatic cut”
in prices for onshore wind in 2015 and beyond. Another spoke of the “beginning
of the end for mature renewables”.

It is also thought that the policy will help to counter the threat from UKIP
which opposes all wind farms on principle.

Mr Alexander denied suggestions the move was in response to Tory MPs unhappy
at wind farms being sited in their constituencies.

The Energy Secretary, Liberal Democrat Ed Davey, said “final plans” for a
reform package on strike prices would be announced this week during an
interview with BBC Radio Humberside on Monday.

Energy Minister Michael Fallon also hinted at changing the policy in a speech
earlier this week.

He said: “We will also announce very shortly now the final support prices
for each renewable technology. Of course new power has to be paid for and we
should be open about that.

“But investment in renewables cannot be done at any price. It must be
affordable for consumers. And the cost of that new investment needs to be
spread more fairly, much more fairly.”

In October energy companies were criticised for the high profits they make
from off and on shore wind farms due to separate a high consumer subsidy
added to household bills.

An analysis of the industry’s figures by the Renewable Energy Foundation
(REF), a think tank, shows that Britain’s largest energy firms received
almost £900 million last year through the subsidy.

In the past Energy companies have blamed green energy levies, which include
the wind farm subsidy, for adding £110 to the average household fuel bill
before recent energy bill rises from the Big Six took effect.

The subsidy is worth £200 million more than the income from the electricity
actually produced by Britain’s on and offshore wind farms. In total, the big
six received more than £1.5 billion in revenues last year from wind farms
they own.

Under present rules, onshore wind farms receive about half their income
through the consumer subsidy and half through selling the electricity they
produce while offshore wind farms receive a subsidy twice the value of the
electricity they generate.

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