Energy companies from Europe, the US and China will receive more than £100 billion in subsidies from British consumers to pay for a new generation of offshore wind farms, it was claimed last night.
The sums are due to go to the owners of just nine, giant wind farms which are being built in the seas around Britain. The wind farms – on a scale never seen before – will attract subsidies totalling more than £6 billion a year, according to an analysis by an energy think tank. That would equate to £120 billion over the 20-year lifespan of an offshore turbine.
With about 90 per cent of the wind farms in foreign ownership that means companies abroad would receive in the region of £100 billion in subsidies. Those subsidies are paid for through additional sums added on to consumer electricity bills. The figures are disputed by the wind industry.
The subsidies, which were put in place by the Labour Government to encourage the building of wind farms, have been criticised for being far too generous.
The energy companies will – under current payment structures – receive twice as much income from the subsidies than from the actual electricity the wind farms produce.
The Renewable Energy Foundation (REF), a think tank which campaigns against the cost of wind energy and analysed the data, criticised the sacale of the subsidies.
Dr John Constable, REF’s director, said: “While there is a real case for experimenting with offshore wind, target-driven development on this scale and at this pace is technically and economically reckless.
“Our current green policies give the EU renewable energy targets a higher priority than the economic health of the UK. This is particularly true in relation to offshore wind, where government has simply opened the British electricity consumer’s veins into the sea, and unsurprisingly some very big fish are moving in for the kill.”
Chris Heaton-Harris, a Conservative MP who has coordinated a campaign against wind farm costs, said: “These offshore wind farms are going to put more people into fuel poverty while failing to supply the consistent energy that our economy needs. It is a licence to print money.”
The nine new wind farms, which are expected to be largely operational by 2020 in time to meet green energy targets, are being developed by some of the world’s biggest energy companies. Only two are based in the UK – Centrica and SSE – while the rest have headquarters in Germany, Holland, Denmark, Norway, Sweden, the US, Ireland, Portugal and Spain. A Chinese energy company has recently bought a large stake in one of the offshore wind farms.
The wind industry describes the nine farms due to come on stream as ‘game changers’. By 2020, Britain is committed to providing 15 per cent of its energy from wind farms, both on and off shore. Presently, just 2.5 per cent of the country’s energy needs come from wind.
In 2010, the Crown Estate, which manages the sea bed off Britain’s coastline, held an auction to develop the sites. The largest is at Dogger Bank 100 miles from the east coast of England and covering an area half the size of Wales and will provide power to millions of homes. The annual subsidy paid to the owners of Dogger Bank – once it is fully operational – is estimated to be in the region of £1.7 billion a year, according to REF.
The Crown Estate, which will hope to profit from the sites under development, manages the assets of the monarch. However its assets are not the Queen’s private property and cannot be sold. It is run as a business and all profits go to the Treasury.
A Department of Energy and Climate Change spokesman said: “We are clear that costs must come down and we are working with industry to reduce the cost of offshore wind by around a third by 2020.
“The £6bn or £120bn figures are based on pure speculation. ”
RenewableUK, the body that represents Britain’s wind industry, said that by 2020 offshore wind farms “will provide clean electricity to 12 million British homes at a stable price which the UK can control”.
Nick Medic, RenewableUK’s director of Offshore Renewables, said: “As ever, REF has wildly exaggerated the figures.
“Driving down costs relentlessly is the key. So to pretend that the costs will be the same in 2020 as they are now is ludicrous.
“As always, REF also ignores the fact that the economic benefits outweigh the costs. Companies invested more than £1.5 billion in the UK offshore wind industry last year. More than 47,000 people will employed in the sector by 2020, many of them in highly skilled jobs.”
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