Wind farm subsidies generate £900m for Britain’s big six energy suppliers

October 13, 2013 by  
Filed under Green Energy News

Alistair Phillips-Davies, the chief executive of SSE, blamed
green energy levies
, which include the wind farm subsidy, for
already adding £110 to the average household fuel bill before the rise took

SSE received £213 million in consumer subsidies from its fleet of on and
offshore wind farms. Its total income from wind farms was in the region of
£373 million.

With low running costs, the surplus made from operating its wind farms is
calculated at £277 million.

The study carried out by the Renewable Energy Foundation (REF), a think tank,
coincided with SSE’s announcement of a rise in bills.

The subsidies were introduced by the Labour government to encourage investment
in the wind industry, in part to meet strict European Union green energy

Opponents complain that wind farms are expensive, blight the landscape and
provide only intermittent electricity, meaning old style power stations will
still be needed on days when the wind is insufficient.

Dr Lee Moroney, REF’s principal analyst, said: “Successive governments’
policies have provided generous, low-risk and long-term rewards at
electricity consumers’ expense to incentivise the very rapid deployment of
wind deemed necessary to meet EU targets.

“The targets are misguided, the rewards are excessive and the
ever-increasing burden on consumers is iniquitous. Surely, it is time common
sense prevailed.”

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.

REF says evidence of how generous the payments are is demonstrated by the
discovery that one wind farm in Fairburn, near Inverness, owned by SSE, had
underestimated the size of its subsidy for 16 months because of faulty meter

REF says subsidies are so generous that the company did not notice when
£2.5million was owed.

Energy companies deny profits from wind farms are excessive and insist the
subsidy is necessary because start-up costs are so high.

London Array, off the south-east coast, is the biggest wind farm in the world
and has 630 megawatts capacity – enough to power 500,000 homes – but cost
£1.8 billion to build.

Dr Gordon Edge, the director of policy at RenewableUK, said: “It’s simply
untrue, and not looking at the full picture, to state that because the
running costs of wind generators are low, excessive profits are made.”

Dr Edge said the “very significant outlay” on building wind farms meant “it
can take a long time before you actually start seeing any profit”.

He added: “It is ironic that our opponents attempt to turn one of the
advantages of wind – its low marginal cost – into an attack.”

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