The Department of Energy and Climate Change (DECC) has confirmed that it will be closing the renewable obligation to onshore windfarms from 1 April 2016, one year early.
The government is claiming that it is ending support for onshore wind because there is now “enough subsidised projects in the pipeline to meet our renewable energy commitments”.
Although RO support will end on 1 April 2016, the government claims that as much as 5.2GW of onshore wind capacity could be eligible for its proposed grace period – offering projects with planning consent, a grid connection offer and acceptance and evidence of land rights extra time to complete their projects and receive RO support.
The controversial move follows the government’s decision to give local communities the final say over onshore windfarm planning applications.
Speaking to BBC 5 Live, Amber Rudd defended the decision, saying that onshore wind deployment had been “more successful than people anticipated”. She continued: “We think now is the time to draw the line. We think by 2020 onshore wind will be responsible for around 10% of our energy generation.”
Responding to criticism from green lobbyists, Rudd said: “This proposal has been on the table for quite a long time. It was in our manifesto, I don’t think it can come as a huge surprise to the industry.”
The Scottish government described the decision as “deeply regrettable”, saying that it could launch a Judicial Review over the move.
Maria McCaffery, chief executive at trade body RenewableUK described the decision as a “chilling signal not just to the renewable energy industry, but to all investors right across the UK’s infrastructure sectors”.
She continued: “People’s fuel bills will increase directly as a result of this government’s actions. If government was really serious about ending subsidy it should be working with industry to help us bring costs down, not slamming the door on the lowest cost option.
The government previously scrapped RO support for solar farms over 5MW two years early, removing subsidies on 1 April 2015.
‘Baffling’ ‘mistake’ which ‘flies in the face of common sense’: Reaction to early onshore wind RO closure
The government’s decision to end renewable obligation support for onshore wind a year early has been met by dismay from the UK’s wider green sector.
Caroline Flint MP, shadow Secretary of State for Energy and Climate Change, Labour
“Renewable energy investment was undermined by the mixed messages of David Cameron’s last government and sadly that looks set to continue.
“Onshore wind is the cheapest and most developed form of clean energy and there are 1,000 projects whose investment plans could be affected by the latest moving of the goalposts. Ministers need to make clear which projects exactly the grace period will apply to.
“We already know the government is on course to miss a key renewables target, and not only do these knee-jerk changes affect onshore wind, they dampen confidence across the renewable sector.”
Daisy Sands, UK energy and climate campaigner, Greenpeace UK
“Ministers have just moved to raise everyone’s energy bills by blocking the cheapest form of clean power, whilst continuing to back the impossibly expensive Hinkley C and going ‘all out’ for unpopular, risky, and unproven fracking.
“Even if this omnishambles of an energy policy survives the many legal challenges threatened against it, it will send a clear message to international investors that the UK government is willing to wreck our power sector to please their most ideological backbenchers. This mistake will cost the UK dearly.”
David Hunt, chair of the REA’s On-site Renewables Group
“We have been speaking to a major renewable developer about recruiting a Head of Onshore Wind and subsequent team, but in light of this announcement I doubt that will proceed.
“Even if it does, it will almost certainly be based and focussed overseas. We live in a global economy and we have numerous examples of manufacturers and developers of solar and renewable technologies setting up and focussing investment overseas, away from the uncertainty of the UK.
“A number of roles we are now recruiting are for UK businesses but for roles in Africa, the Middle East and Americas. This decision is likely to benefit other countries at the expense of the UK.
“This is a political decision which flies in the face of common sense and public opinion. It will provide a boost to the oil, gas and fracking community and goes completely against the government’s own polling which showed 74% in favour of onshore wind and only 24% in favour of fracking.
“Clean energy brings jobs, investment, energy security and innovation to the UK and, in case the government has forgotten, helps us meet our climate change commitments.”
Tim Waterfield, Savills Energy
“The government’s decision to terminate onshore wind subsidies is baffling to both industry and consumers. Indeed, the government’s own surveys show that 65% of the British public support onshore wind.
“We urge the government to reconsider its decision and to avoid causing an irreversible impact on investor confidence. Consultation with key bodies, such as RenewableUK, British Wind and Scottish Renewables, is absolutely key to determine the best outcome for the industry.
“There is no denying that the UK needs to put in place a comprehensive and well-balanced mix of technologies to meet our decarbonisation targets and deliver energy security for future generations. Likewise, it is clear that such technologies need to be economically viable and able to stand on their own two feet.
“However, as has been seen across Europe, when subsidies are removed too early, the cost to industry and taxpayers is significant. Without confidence in future political and financial support, investors will lose faith in renewable infrastructure development and all of the good work that has been done to help the UK meet its targets to date will be put at risk.”
Niall Stuart, chief Executive, Scottish Renewables
[The decision is] “bad for jobs, bad for investment and can only hinder Scotland and the UK’s efforts to meet binding climate change targets”.
“Scottish Renewables completely rejects the UK government’s rationale for cutting support for onshore wind.
“We believe this decision could put around two gigawatts of onshore wind projects in Scotland at risk. These are projects that could provide the equivalent electricity demand of 1.23 million Scottish homes and significantly improve our energy security, while bringing around £3 billion pounds of investment.
“A recent report by the UK government estimated that there are 5,400 jobs in the onshore wind sector in Scotland, and many of these could now be at risk. Early closure of the Renewables Obligation will also serve to damage investor confidence, not only in the onshore wind industry, but in the wider UK energy sector.
“Ending the Renewables Obligation, which projects already in the planning system are reliant upon, is neither fair nor reasonable and would effectively amount to a retrospective act from the government.
“Onshore wind is the cheapest form of renewable electricity we can deploy at scale, so removing financial support completely undermines the goal of cutting carbon emissions as cost-effectively as possible, and actually risks increasing consumer bills.”
Maria McCaffery, chief executive, RenewableUK
“The government’s decision to end prematurely financial support for onshore wind sends a chilling signal not just to the renewable energy industry, but to all investors right across the UK’s infrastructure sectors.
“It means this government is quite prepared to pull the rug from under the feet of investors even when this country desperately needs to clean up the way we generate electricity at the lowest possible cost – which is onshore wind. People’s fuel bills will increase directly as a result of this government’s actions. If government was really serious about ending subsidy it should be working with industry to help us bring costs down, not slamming the door on the lowest cost option.
“Ministers are out of step with the public, as two-thirds of people in the UK consistently support onshore wind. Meanwhile the government is bending over backwards to encourage fracking, even though less than a quarter of the public supports it.
“We are calling for the energy secretary to hold immediate talks with the wind industry so that the impact of these cuts can be managed, or at least be reduced. We note that the government is allowing some flexibility – so-called “grace periods” – to allow projects where significant investment commitments have already been made in good faith to proceed as planned – but this still means that many much-needed projects will be lost unless the cut-off points for financial support are reviewed and extended.”
Juliet Davenport OBE, founder and chief executive, Good Energy
“At such an important time in international climate change negotiations, and just one day after more than 1,000 people descended on Parliament to lobby MPs about climate change it is very disappointing that the new government is announcing plans to reduce support for the cheapest large-scale renewable energy – onshore wind.
“By closing the Renewables Obligation early, the government is letting a vocal minority dictate energy policy. We believe the government should be providing solid, stable support for renewable energy which helps tackle the threat of climate change and challenges the dominance of fossil fuels.
“Today’s announcement will undermine growth, investment and jobs in a sector which is helping to introduce more competition and new players into the energy market. Onshore wind developers, including many British companies, have invested millions of pounds in good faith based on the government’s original timetable. This decision will bring further instability and uncertainty to investors and is transactional government at its worst.
“Onshore wind offers the opportunity for diversifying investment in energy, bringing with it the potential for job creation and further investment. Wind developments also support the growth of small-scale independent generators as well as communities who want to generate their own clean energy, have viable alternatives to the big six and reduce their energy bills.
“Renewable technologies need a stable policy framework from which to grow. They do not need another retrospective policy decision, changing goalposts and associated uncertainty. This will serve only to stifle investment, growth, competition and ultimately, the opportunity to make a meaningful low-cost, low-carbon contribution to the UK’s longer-term energy security.”
Dale Vince, Ecotricity
“There are two issues here. Firstly the government justifies cutting support for onshore wind on the basis of saving money and wanting technologies to stand on their own feet. At the same time it awards a further 35 years of new subsidies to nuclear, and billions to the oil and gas industry to support it against falling energy prices.
“The IMF recently reported that Britain spends £30 billion a year subsidising the fossil fuel industry, that’s over £1,000 per household. Onshore wind by contrast costs £10 per household. Government sentiments make sense, but they’re targeting the wrong subsidised energy source.
“Secondly, it’s dishonest of the government to say they are changing the planning system to give local people the final say on wind farms. They are simply putting decisions about exceptionally large wind projects (over 50MW), which currently sit with government, into council hands. In fact these wind farms are so exceptional that only five currently exist in England, a further 3 already have permission to be built, and there are none in planning. So the government have just given a say, but not final one, to local people, in zero new planning applications for onshore wind. And projects of this size are so rare – it’s unlikely there will be any more coming forwards. It’s incredible to dress this up as giving new powers to local people – it’s a lie.
“Putting aside the dishonesty of the announcement, this represents a glaring double standard. Planning regulations stipulate that all energy projects over 50MW are decided at national level – this applies to coal, oil, gas and nuclear – yet only wind will now to be decided by local councils – the most popular and least harmful of all sources of energy. If the Tories are serious about this one nation thing they cited today (they used to call it Localism) then they should apply it evenly across the board – give local people a say on all energy sources. But don’t call it the final say, since it isn’t.
“And then there’s fracking, probably the most unpopular of all energy sources, planning regulations and property law have been changed to make it easier, environmental standards have been dropped – even the requirement to tell someone you plan to frack under their house has been removed. There is no local say or veto here. And it’s been promised the most generous tax regime in the world. These are double standards plain and simple and they show an incredible bias towards fossil fuels and away from renewables.”
Fergus Ewing, Scotland’s Minister for Business, Energy and Tourism
“We are aware of the UK government’s apparent intention to remove or reduce subsidies. In 2013, only two years ago, there was a UK government review of the appropriate level of support for onshore wind and concluded a reduction in support. Those were the rules set by the UK government and which investment decisions were made on. If you now bring forward an early closure of the Renewable Obligation a huge amount of sunk investment will not go ahead.
“We don’t believe an early closure of the Renewable Obligation is a sensible decision and will expose the UK government and hence the taxpayer to the risk of Judicial Review. However if such a decision goes ahead it must be ameliorated by a grace period covering all projects currently in planning.”
Dr Nina Skorupska, chief executive, Renewable Energy Association
“If the government is to ensure we meet our climate targets in the most cost effective way, it is hard to think of a way we can achieve that without onshore wind, solar PV, biomass power and the renewable heat incentive playing larger roles.
“Key decisions to all of these technologies are being made in the next year, and investors need confidence, as does the industry, if our members are going to keep their side of the bargain in driving down costs.
“We share Amber Rudd’s goal in getting renewables such as solar to grid parity, but constant piecemeal changes could harm this and add on costs through higher financing and risk.”
Ben Warren, Energy Corporate Finance Leader at Ernst & Young
“The government’s announcement of its plans to scrap subsidies for onshore wind comes as little surprise for many in the industry.
“The rationale behind today’s announcement is that the UK has enough onshore wind capacity to help it meet its targets. This ignores both the fact that onshore wind can, and already does, provide cost effective power, as well as the economic, social and environmental benefits that stem from it.
“It is time for the government to clarify its strategy for the UK’s future energy mix. If the objective is to secure clean and affordable energy then the Government’s policy needs to accelerate the deployment of onshore wind and solar PV, the two technologies that have proved that they can be the cheapest and most rapidly deployable sources of clean energy.”