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Foreign firms reap £500m a year in subsidies from UK wind farms  

Credit:  By Edward Malnick and Robert Mendick, The Telegraph, www.telegraph.co.uk 18 September 2011 ~~

Two thirds of wind turbines in the UK are owned by foreign companies, raking in half a billion pounds in subsidies added to household bills.

A Sunday Telegraph audit of Britain’s 3,419 turbines reveals 2,276 are either fully or partly-owned by foreign businesses.

The findings demonstrate how companies from around the world are benefiting from generous incentives offered by the Government to meet carbon reduction targets.

One Danish company owns or part-owns three offshore wind farms that receive almost a hundred million pounds a year in subsidies from British consumers.

Critics say foreign firms are profiting from the Government’s “indifferent” approach to higher bills for households, but the Coalition insisted its incentives are “broadly in line” with other EU countries and that investors are instead attracted by Britain’s windy climate.

Other big winners in the scramble to make money out of Britain’s wind include energy companies and investment funds in Japan, the US, Norway, Sweden, France, Spain, the Netherlands and Germany.

Among them are a Tokyo-based investment company, which earlier this month bought a large slice of a 48-turbine offshore wind farm off the coast of Essex, a cruise liner company based in Oslo, and a Luxembourg-based firm which owns eight turbines on the land of Sir Reginald Sheffield, the father of Samantha Cameron.

Some of Europe’s biggest energy suppliers, such as EDF, are also among those cashing in, despite make billions of pounds in annual profit.

The subsidised, known as Renewable Obligations Certificate (ROC) payments, come on top of the money wind farm owners make from selling electricity, and are proportionate to the amount of energy produced.

Last year the scheme, which also provides incentives to other renewable sources such as hydroelectric power, handed out over £1.1 billion in revenue.

Offshore wind farms, which are more expensive to build and maintain, are paid up to double the onshore rate.

Calculations by the Renewable Energy Foundation think tank on behalf of this newspaper show that, from next year, ROC subsidies to wind farms owned or part-owned by foreign firms will total £523 million.

That figure is set to rise steeply in the next decade as the Government attempts to meet its carbon reduction targets in 2020.

The disclosures follow recent estimates that the switch to green energy adds an average of £200 a year to household energy bills, which are due to rise even further this winter.

On Thursday French-owned EDF Energy announced its electricity tariffs will increase by an average of 4.5 per cent and gas prices will go up by 15.4 per cent from November 10.

The Renewable Energy Foundation said that the Government’s “indifferent” approach to consumer cost made the UK an attractive target for investment in wind.

Dr Lee Moroney, Planning Director of the Renewable Energy Foundation, said: “Target-driven and generously-subsidised growth in the UK renewables sector was always likely to attract international investors seeking rapid returns and a prompt exit.

“The real concern is that having made handsome profits from the UK electricity bill payers, they will move on leaving the UK with subprime and distressed assets.”

The individual foreign energy companies contacted by The Sunday Telegraph said that their substantial investments brought numerous benefits to the UK, including thousands of jobs.

A spokesman for RenewableUK, the trade association for the wind industry, said: “The liberalised electricity market brought in by Margaret Thatcher has made the UK a great place to do business.

“Factoring in the best wind resource in Europe, it’s no surprise that companies from overseas would want to invest here.

“The wind industry employs nearly 10,000 people in the UK, and invested nearly £2 billion last year alone. The UK is making money from the wind.”

Lord Lawson, a former chancellor and chairman of the Global Warming Policy Foundation, said: “If it were a sensible policy then I would have no concern.

“But since it is anything but a sensible policy – it is absolutely pointless, it is extremely expensive and extremely damaging both for the British economy and for British consumers – to have so many foreign companies creaming off the subsidy merely adds insult to injury.”

The biggest overseas winner is Dong, a Danish company which has a large stake in three offshore wind farms that will make a total of £98m in subsidies and has a 50 per cent share in the development of the 175-turbine London Array offshore site.

Spanish-owned ScottishPower has 21 wind farms in the UK comprising over 500 turbines, which would entitle it to an annual subsidy of £80m.

ScottishPower, whose parent company is Iberdrola, also has a share of a 103-turbine wind farm at Llandinam in central Wales together with Eurus Energy UK, a subsidiary of Tokyo-based Eurus Energy Holdings Corporation, which entitles the companies to share a subsidy worth £3m – a relatively low figure because the turbines are outdated.

Another Japanese company, Marubeni Corporation, paid Dong £200m to become co-owner of Gunfleet Sands wind farm on September 1.

Vattenfall, the Swedish energy company, owns three wind farms and is entitled to an annual payment of £84m under the ROC scheme.

Fred Olsen, the Norwegian company that also runs several cruise liners, owns four wind farms in the UK comprising a total of 130 turbines – meriting a subsidy of £34m.

An eight-turbine wind farm on the land of Sir Reginald Sheffield, the prime minister’s father-in-law, earns a £2m consumer subsidy.

The ownership of the turbines is registered to a UK company, Bagmoor Wind Ltd, whose “ultimate controlling company” is Ridge Wind Holdings Sarl, based in Luxembourg.

The Swedish company Vattenfall and Nowegian Statkraft, whose UK turbines produce a £86m subsidy are both state-owned businesses.

A spokesman for Fred Olsen added that all profits earned by the company in the UK over the last 10 years have been reinvested in this country.

A Department for Energy and Climate Change spokesman said: “The subsidy levels offered in the UK are broadly in line with much of Europe and lower than a number of nations.

“But we are an island nation with the best natural, secure, sustainable and free wind resource in Europe, so it’s no surprise that major global firms want to invest and build in the UK.”

Many homes in Britain are supplied with non-renewable energy by companies that are also not based in the UK.

Source:  By Edward Malnick and Robert Mendick, The Telegraph, www.telegraph.co.uk 18 September 2011

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

The copyright of this article resides with the author or publisher indicated. As part of its noncommercial effort to present the environmental, social, scientific, and economic issues of large-scale wind power development to a global audience seeking such information, National Wind Watch endeavors to observe “fair use” as provided for in section 107 of U.S. Copyright Law and similar “fair dealing” provisions of the copyright laws of other nations. Send requests to excerpt, general inquiries, and comments via e-mail.

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