Subsidy grace period could allow for another 3GW of onshore wind

The Government has confimed it will grant a 'grace period' after the closure of the Renewables Obligation subsidy in April that could allow another 2.9GW of onshore wind energy capacity to be built in the UK.

The grace period means that projects with planning consent, grid connections and agreements to use the land by 18 June 2015 will still be eligible for the subsidy.

Projects that have met all these criteria and can demonstrate that they have struggled to secure finance from lenders since 18 June will be allowed extra time but no longer than nine months.

The Department of Energy and Climate Change (DECC) said the plans represented the best deal for the consumer and investors and would help see 12.3 GW of onshore wind deployed in the UK by 2020 – “enough to meet our renewable energy commitments”.

The Government has recently come under fire from an influential EY report which claimed that investor confidence in UK renewables was at its lowest level ever after recent subsidy cuts.

Long-term plan

Energy Minister Lord Bourne said: “We have a long-term plan to keep the lights on and our homes warm, power the economy with cleaner energy, and keep bills as low as possible for hard-working families and businesses.

“To do this we will help technologies stand on their own two feet, not encourage a reliance on public subsidies. By bringing forward these amendments we are protecting bill payers whilst meeting our renewable energy commitments.”

The changes will be introduced as amendments to the Energy Bill, which is currently going through Parliament.

Industry backing

Maf Smith, deputy chief executive of wind trade group RenewableUK, said: “This announcement means that wind farm companies can now go ahead and fully invest in local wind farm projects.

“It’s good to see that Government has acknowledged the financial uncertainty caused by these changes and the additional time offered will help rebuild investor certainty.
“It’s important that industry works with Government and Parliament to ensure these amendments are incorporated and the Energy Bill gets on the statute books as soon as possible. It is only then that developers can deliver the level of new capacity the Government wants to see by 2020.”

Emissions cut

The grace period was announced on the same day that DECC released new figures showing that temperature-adjusted greenhouse gas emissions were down more than 4% year-on-year in the first half of 2015.

DECC said the reduction was thanks to increased electricity generation from renewables in Q2 2015 leading to a reduction in coal use.

Road to Paris…

Reacting to the figures, Andy Dewis, the director of sustainability at energy management firm Schneider Electric, said “While today’s results will support the UK’s position around carbon policy in Paris, we are yet to see if it’s a true impact or a positive blip. Ultimately the government has to navigate an effective path between rising policy costs and decarbonisation targets.

“This downward turn in the numbers is a positive result for the UK, especially in the run up to the Paris climate change summit in November.

“What’s important now is that we maintain these numbers. The government’s recent move to curb offshore wind farms, such as Navitus Bay, and reductions in feed-in tariffs (FITs) which reward those who generate their own power through renewable sources, is casting doubt that we can sustain these figures.”

Brad Allen

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