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UK has best incentives for offshore wind farms  

The UK has the best financial incentives for offshore wind farms of any EU country and is “clearly seen by investors as the most attractive place for investment in this growing industry”, according to a KPMG study.

The research, carried out for the German Wind Energy Association, was published in the wake of leaked Government papers which suggested that the Government plans to work with Poland and France to undermine European targets of 20 per cent of energy from renewable sources by 2020 and “effectively abolish” UK targets.

The European Commission has postponed its proposals until the New Year due to “member governments’ lack of commitment” amidst the rumours of UK plans to scupper any attempt to enforce mandatory targets.

Existing UK incentives for green power generation under the Renewables Obligation have been heavily criticised, with Greenpeace executive director John Sauven describing the RO as “an uncertain and short-term system, which has been found by European Commission research to be one of the least efficient and most expensive renewable energy support mechanisms in Europe”.

Caroline Lucas, Green MEP for the South-East and the party’s principal speaker said current policy in support of renewables were “confusing, piecemeal and inadequate”.

However, the KPMG study found that UK offshore windfarm projects offer investors a rate of return of 13.4 per cent, compared to Germany – held up by Greenpeace as the shining example to which the UK should aspire – where higher costs, geographical issues and lower incentives for investors mean investors can only expect a 1.3 per cent return.

Gillian Butchart, KPMG’s corporate finance head of renewables, said: “To be honest we were a bit surprised with the results, having been under the impression that Germany has a very good regime. It flies in the face of what we expected.

“While the results have a lot to do with the UK being a good place to locate offshore windfarms, the RO regime does provide returns for investors.”

Despite its massive wind resource and the offshore expertise gained in the North Sea, the UK could still snatch defeat from the jaws of victory if targets are slashed and incentives dismantled.

Butchart said the UK should take advantage of its position of strength and that KPMG was seeing companies pulling out of projects elsewhere and focusing their investment on the UK.

However, if prime minister Gordon Brown does do a u-turn on renewables, momentum will be lost at great cost to both the environment and the economy.

“This is good news for the UK and good news for investors – as long as the Government doesn’t change its mind,” Butchart said. “We need security that the incentives are going to remain in place.”

By Bob Bell

Telegraph

7 November 2007

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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