George Osborne is planning new powers to allow communities to block wind turbines as the Coalition row over green energy targets escalates.
Whitehall sources said the Chancellor was pushing for changes to the planning regime as part of a deal with the Liberal Democrats over the future of climate change policy.
There are 3,800 wind turbines across the UK, but at least 10,000 had been expected to be built to help meet Britain’s pledge to cut carbon emissions to 50 per cent of 1990 levels by 2025.
But more than 100 Conservative MPs have called for cuts in state subsidies for new turbines, and changes to planning rules to limit their construction.
One source said: ‘The Treasury is looking at how to change the planning process around turbines to try to give local communities more say, and potentially how they can share some of the financial benefits.’
Mr Osborne is offering to limit his demands for reductions in subsidies for onshore wind farms if the Lib Dems agree to compromise on inflexible climate goals.
He insists householders should not be faced with bigger energy bills and firms put at a disadvantage by Britain attempting to cut emissions faster than other countries.
The Chancellor points out that the UK accounts for less than 2 per cent of global greenhouse gas emissions, compared with 40 per cent from the US and China.
He argues that many renewable energy sources, such as wind and solar, are too expensive and wants a massive expansion of gas-fired power stations instead.
Applications for new wind farms have to be made to local authorities, and around half are refused. But under the existing system, energy companies often win on appeal to the Government’s planning inspectorate.
Campaigners took heart from a court ruling in May, in which villagers in Hemsby, on the edge of the Norfolk Broads, succeeded in blocking four 350ft turbines after a High Court judge agreed their right to preserve their landscape was more important than renewable energy targets.
In return for changes to allow communities more opportunities to prevent onshore wind farms, as well as financial incentives for those that do accept them, Mr Osborne is prepared to accept Lib Dem Energy Secretary Ed Davey’s proposed cut in onshore wind subsidies of 10 per cent, followed by a review next year.
The Treasury had been pressing for tougher cuts in the subsidies, though suggestions that they could be cut by as much as 25 per cent were dismissed.
‘We never tried for, nor were going to achieve an immediate 25 per cent reduction in onshore renewable subsidies,’ said one source. ‘This would be likely to be struck down in court.’
Sources said the Chancellor wanted to ‘rule out anything that might make gas investment unviable’ such as another renewables target.
He is pushing for a looser regulatory regime for ‘fracking’ – the fracturing of dense shale rock under pressure of jets of water, sand and chemicals – to extract gas. In the US, gas prices have fallen significantly as shale gas extraction has taken off.
‘Gas should continue to play a massive role in our energy needs for the future, alongside nuclear and some renewables, so we want to do all we can to secure investment in both gas and renewables generation, but also to bring down bills for businesses and consumers,’ the source said.
In a leaked letter to Mr Davey, the Chancellor has urged him to make a ‘clear, strong signal’ of support for ‘unabated gas’ up to 2030 and beyond, including a promise that consumers would benefit from falling gas prices.
‘Setting inflexible targets on the energy sector is inefficient,’ he writes.
Craig Bennett, director of policy and campaigns at Friends of the Earth, said: ‘The Chancellor’s pre-election pledge that the Treasury will become a “green ally, not a foe” has been completely trashed.’
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