Wind sector breathes sigh of relief over Renewables Obligation (RO) banding review
The onshore wind sector has expressed relief following the government's Renewables Obligation (RO) banding review, cutting the sector's support by 10% compared to the 25% previously expected.
Industry associations believe the cut will not stop the sector growing and expects to employ over 12,000 people by 2020 and add over a billion pounds to the UK's economy every year.
The cuts have been made based on evidence of cost reductions within the onshore wind industry so that it offers energy consumers better value for money.
RenewableUK's chief executive Maria McCaffery said: "We welcome the government's decision to set its financial support for onshore wind energy at a level that will enable the industry to continue to grow.
"Although it has been a long time in coming, the final decision was based on hard economic evidence, and was not derailed by short term political considerations. We recognise that these are difficult economic times and we have been trying to drive costs down".
The cuts will, however, have an impact on the sector, reducing the growth by an estimated £2bn of investment out of a potential £20bn, with 1,300 fewer jobs created.
The banding for onshore wind support will be cut from 1 ROC to 0.9, while new projects at or below 5MW will be closed. However, from April 1 2013 projects will be subject to further consultation.
Martin Wright, Chairman of the Renewable Energy Association (REA) told edie: "We are concerned about the further reviews facing many technologies, which is likely to inhibit investment. This stop start process is profoundly damaging and we need a long-term energy plan that will encourage business investment."
Mr Wright added that if the 25% cut that some MP's were lobbying for had been approved many projects across the region would have closed.
Despite the cut in onshore wind, the announcements offered good news for other sectors including hydro, advanced pyrolysis and gasification and energy from waste (EfW).
However, the geothermal power industry was hit by proposals to freeze support for deep geothermal power.
The geothermal sector will remain at a level of 2 ROC from 2013-2015 but will then decline to 1.9 in 2015/16 and 1.8 in 2016/17, which is a level too low to stimulate domestic investment, according to the REA.
Ryan Law, chair of the REA Deep Geothermal Group said: "We are shocked by this announcement. We should be at the forefront of this industry, given the strength of British engineering skills.
"If the UK wants to seize a share of the booming global market for geothermal development we must prove our competence at home. The message today's announcement sends to the outside world is that the UK is closed for geothermal business."