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Ed Davey pledges new price support for offshore wind power

Thanet Offshore Windfarm in U.K.

Thanet offshore windfarm, near Ramsgate, Kent. Photograph: Antonio Olmos


Powered by article titled “Ed Davey pledges new price support for offshore wind power” was written by Terry Macalister and Rowena Mason, for on Wednesday 4th December 2013 16.38 UTC

The government has responded to a growing investment crisis with the country’s offshore wind programme by pulling back on plans to make heavy cuts in subsidies for the power source.

After the German firm RWE last week told of its plans to shelve the 240-turbine Atlantic Array windfarm off Devon, the energy department announced the “strike price” (predetermined price) would be £140 a megawatt hour for 2017-18 and not the planned lesser amount of £135.

Ed Davey, the energy secretary, said the measures unveiled on Wednesday would unleash £40bn of extra investment in carbon-friendly electricity generation.

He said: “This package will deliver record levels of investment in green energy by 2020. Our reforms are succeeding in attracting investors from around the world, so Britain can replace our ageing power station and keep the lights on.

“Investors are queuing up to express their interest in these contracts. This shows that we are providing the certainty they need, our reforms are working and we are delivering ahead of schedule and to plan.”

Davey said the UK was now on track to double the amount of electricity generated from renewables, from 15% to 30% by 2020, with an expected 10GW of capacity in place generated by offshore wind.

Financial support for onshore wind farms and large-scale solar schemes that have sometimes caused controversy has been reduced faster than expected under the regime at the Department of Energy and Climate Change as these maturing technologies have become increasingly competitive with fossil fuels.

The cuts were criticised by Labour but government denied that the move against onshore wind power was motivated by a need to please Conservative backbench MPs opposed to farms mainly for the perception that they “blight” the countryside.

On Wednesday, the upbeat message from Davey was endorsed by Dong Energy, a Danish company at the forefront of the offshore wind power “revolution” being pioneered by Britain but opposed by some on cost grounds.

“We welcome the announcements from the government on … the strike prices today,” said Brent Cheshire, Dong’s UK chairman. “The strong commitment to offshore wind demonstrated by the government today gives us the confidence to move forward with our future pipeline of projects.”

Dong claims to have already committed to investing £4bn in the UK’s offshore wind market; its installed turbines already power more than 1m homes.

However, Gareth Stace, head of climate and environment policy at EEF, the manufacturers’ organisation, claimed his members would be unhappy.

“With energy bills already rising industry will be disappointed that the reduction in subsidies for mature technologies, such as onshore wind, hasn’t translated into a cut in the cost of the overall programme. In particular, the future path for offshore wind strike prices raises question about existing commitments to drive down their costs.”

The plans were also criticised by Labour for undermining certainty for investors in renewables so soon after previous cuts to financial support for onshore wind farms and solar panels.

Chris Leslie, shadow chief secretary to the Treasury, told BBC Radio 5 Live: “They’re just chopping and changing all the time – very bad for stable, long-term, investment.”

The prime minister’s official spokesman insisted the decision to reduce onshore wind subsidies had been taken for economic rather than political reasons.

“The reason behind it is that … we want a broad energy mix. As new technologies develop over time, lower levels of support are needed. That’s why you are seeing the changes we are announcing today,” he said.

Asked whether it had anything to do with Tories pushing for fewer onshore wind farms, he said: “Today’s announcement is about the structure … for a range of energy targets. It’s right those are regularly reviewed. The cost of energy changes as technology develops over time.


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