Developers are abandoning plans for new wind farms in Britain because they are “no longer financially viable”.
The decision to scrap the wind farms is the first evidence that the spread of turbines across the country is being halted. It follows a radical overhaul by the Government of the consumer subsidy, worth more than £1 billion a year to wind farm owners.
Under the subsidy, wind farms are guaranteed to receive double the wholesale price for the electricity they produce. Under the new scheme, to be introduced later this year, companies will have to sell their electricity to the national grid under a competitive bidding system.
The new scheme will limit the total amount of subsidies available for green energy; previously the subsidy budget was effectively limitless.
The change has led to developers scrapping wind farm schemes amid claims that the new system will make future wind farms unprofitable.
Last week SSE, one of the big six energy companies, announced it was abandoning two wind farms in Scotland, both of which had attracted fierce local opposition.
SSE had wanted to build one farm with 27 turbines, each 400ft tall, at Dalnessie in Sutherland and the other for 12 turbines at Glen Orrin in Ross-shire. Neither will now get built. SSE said it was looking at all its other schemes on a “case by case basis”.
Community Windpower, which has a number of wind farms already in operation, has abandoned two sites in England – one for 16 turbines, each 426ft high, at a disused airfield in north Cornwall and another for 10 turbines in the Forest of Bowland, a beauty spot in Lancashire.
Both companies had sunk millions of pounds into the schemes, which were going through the planning stage. Renewable UK, the trade body, said that other wind energy companies were also reviewing future projects in the face of a squeeze on the subsidy.
Campaigners, who say wind farms are ugly, expensive and unreliable, will celebrate the demise of the schemes. Conservative MPs have been demanding cuts in wind farm subsidies to halt their spread.
The changes to the scheme will not come into full effect until 2017. Until then the new scheme will run in parallel with the existing one.
Wind farms facing the axe are likely to be ones completed after 2017 when owners will be forced to bid for subsidy from a limited pot of money. The successful bids will win subsidies at reduced rates.
The changes were ordered by the Treasury, which had become alarmed by the huge sums being offered to wind farm developers. The subsidy is added on to electricity bills, driving up household costs.
Dr John Constable, the director of the Renewable Energy Foundation think tank, which has criticised the size of wind energy subsidies, said: “Competitive tendering for renewables subsidy is bad news for many wind projects, reducing the value of the planning consent and making it much harder for developers to realise a significant profit.”
Maf Smith, deputy chief executive of RenewableUK, said: “It’s obviously concerning that projects from one of the cheapest sources of renewable energy are being withdrawn.
“There are still projects coming forward, but these recent announcements are a warning shot to the Government to make sure that their up coming reforms are done in the right way.”
A spokeswoman for the Department of Energy and Climate Change said: “Onshore wind is the cheapest large-scale renewable technology and has a key role to play in our energy mix. It is a thriving and mature industry and it is right that Government support should reduce as the cost of generating comes down.”
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