Subsidies that have fuelled the spread of onshore wind farms are to be dramatically curtailed, under Government plans to be unveiled within days.
The Telegraph has learnt that a generous subsidy scheme will be shut down earlier than expected, effectively preventing thousands of turbines from getting built, under plans being considered by Amber Rudd, the new energy secretary.
The proposals, which could be announced as soon as this week, will set out for the first time how the Conservatives will implement their manifesto pledge to end any new public subsidy for onshore wind farms – amid concerns that turbines are unpopular with local communities.
Under current policy, any big onshore wind turbines built before the end of March 2017 would automatically be able to qualify for generous payments through a scheme called the Renewables Obligation (RO), which is funded through green levies on consumer energy bills.
The Department of Energy and Climate Change has now confirmed it plans to “reform” the RO scheme. It is understood to be looking at ending the free-for-all by shutting the scheme down early – effectively preventing thousands of turbines getting built. The action follows similar moves taken to curb subsidies for solar farms last year.
After the RO shuts, the only possible subsidies for wind farms will be through a new scheme that is less generous and also much more strictly rationed, with ministers deciding how many projects – if any – are awarded subsidy contracts, enabling them to block further onshore wind if desired.
As well as big wind farms, subsidies for small individual wind turbines such as those popular with farmers – funded through a separate scheme called the Feed in Tariff – are expected to be limited under the plans.
A spokesman for the DECC said: “We are driving forward plans to end new public subsidy for onshore wind farms.
“We will shortly be publishing our plans to reform the Renewables Obligation and Feed in Tariff scheme to implement this commitment. With the cost of supplying onshore wind falling, government subsidy is no longer appropriate.
“We have supported new technologies when they’ve been a good deal for the consumer – providing start-up funding and certainty about future payments to help them become competitive. However, those subsidies won’t continue when costs come down – that’s not value for money for billpayers in the long run.”
Ms Rudd said: “We promised people clean, affordable and secure energy supplies and that’s what I’m going to deliver. We’ll focus support on renewables when they’re starting up – getting a good deal for billpayers is the top priority.”
Government plans to tackle climate change and hit EU renewable energy targets envisage that between 11 and 13 gigawatts (GW) of onshore wind power is needed by 2020.
More than 9.5 GW of projects – about 5,500 turbines – have either already been built or are under construction in the UK. At least 5.2 GW more wind farms – almost 3,000 more turbines – have already been granted planning permission.
Even if not all of these are built there would still be enough to hit the top end of Government plans.
On top of that, there are close to 3,000 more big new turbines with a combined capacity of more than 7GW seeking planning permission.
The DECC spokesman said: “Looking at what has already had planning permission, there is enough onshore wind to contribute what’s needed to reach the ambition set out in the Coalition Government’s renewables roadmap that 30 per cent of our electricity should come from renewables by 2020.”
Many of the projects that already have planning permission would have been expecting to secure subsidies under the RO scheme and it is not clear whether they will still be able to if the scheme shuts early. Ministers may consider offering a ‘grace period’, enabling some of those that already have permission to still get built while blocking off subsidies for those that do not.
One of the biggest factors determining the impact of the proposed changes will be whether or not they apply in Scotland, where the majority of proposed turbines are due to be built.
The Government said last week that it would “consult with the devolved administrations on changes to subsidy regimes for onshore wind farms”.
Nicola Sturgeon, the SNP Scottish First Minister, wants more onshore wind farms and has already demanded a veto on the Tory plans – raising the prospect that subsidies could continue to be paid to new projects in Scotland.
However the Conservatives will be under pressure from their own backbenches to ensure the subsidies are scrapped across the UK.
The Government also announced in the Queen’s Speech last week that it would bring forward legislation to give local communities “the final say” by ensuring large wind farm projects are decided at local rather than national level.
Ms Rudd said: “We need to make decisions on energy more democratic and give our communities a direct say into new onshore wind farms where they live. In future, I want planning decisions on onshore wind farms to be made by local people – not by politicians in Westminster.”
However those in the green energy industry had been most concerned about the pledge to end subsidies, amid uncertainty over the detail of the plans.
Critics of the Conservative pledge, including Tim Yeo, the former Tory head of the energy committee, and Ed Davey, the former Lib Dem energy secretary, have argued that it will actually push up bills as ministers instead offer subsidies to more offshore wind farms that are even more expensive.
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