January 13, 2014
England, U.K.

Britons pay third more for wind subsidies

By Tina Rowe | Western Daily Press | January 13, 2014 | www.westerndailypress.co.uk

Britain has been paying on average 35 per cent more in subsidies for onshore wind farms than the international average according to an official report.

The independent study shows that £95 is paid for every megawatt hour of electricity in Britain, compared with the international average of £70. This places the UK, where subsidies are financed by a levy on bills, ahead of France, Germany, the United States and Denmark – which pays the smallest subsidy in Europe.

The 143-page report, published on the Department of Energy and Climate Change website, concludes: “On all measures, the UK support levels rank as between the seventh and ninth highest out of 26 countries.”

The coalition is split on the future of renewable energy and this report is though to be that which was at the centre of a reported row between energy secretary Ed Davey and Environment Secretary Owen Paterson.

Frontier Economics, which was commissioned to carry out the study by DECC, says comparing different subsidy regimes is difficult but concludes that Germany paid £80 per megawatt hour. In Denmark the cost is less than £60.

Since the report was published on the DECC website, the Government has announced a cut in subsidy by £5 per megawatt on future projects in recognition of the fact that costs of the technology are becoming more competitive.

The DECC says onshore wind is one of the cheapest large-scale renewable technologies and makes a valuable contribution to our energy mix, with the wind farm industry saying that the subsidy is fair because the cost of building wind farms is greater in Britain than elsewhere – a fact backed by the report.

Some charges outlined in the report, such as the transmission charge for connecting to the National Grid, are higher, but it added that commercial confidentiality over deals makes this difficult to detail.

It adds: “Higher development risks have also been cited as a possible reason although we did not find strong evidence that these risks are higher in the UK.”

The report suggests that subsidies tend to be higher in countries with lower wind speeds, but notes that Britain is far windier than Germany.

Brian Binley, the Conservative MP and chairman of the All Party Parliamentary Group for Clean Coal, told the Sunday Telegraph: “The cost of energy produced by wind farms, which is almost three times the cost of energy produced by carbon fuels, is placing a massive burden on households and businesses.”

There are 526 onshore wind farms in Britain, typically producing about five per cent of the country’s electricity.

DECC has said new European Commission guidelines on “state aid” for wind farms are likely to force the Government into further cuts in subsidies.

The wind farm subsidies were introduced by the Labour government to encourage development of the renewable energy industry, with Britain committed to legally binding green energy targets by 2020.

Dr John Constable, the director of the Renewable Energy Foundation, a think tank that has been one of the biggest critics of wind subsidy levels, said the report confirmed subsidies were too high.

He said: “The only possible justification is that it will drive down costs, but the UK Government ignored this principle and decided to use such subsidies to meet arbitrary and foolishly high targets for green electricity in a very short timescale.”

Applications for on-shore wind farms often prove controversial. A wind farm planning enquiry at the Princess Theatre, Burnham-on-Sea, enters its second week tomorrow. Green energy company Broadview is appealing against Sedgemoor District Council’s decision to turn down its application for four 130-metre high turbines at Pilrow, near the M5. The Nopilrow action group says such a development will be a blot on the flat landscape and deter tourists.

Broadview says if approved the windfarm could generate enough electricity to meet the needs of up to 7,560 homes.