Your independent energy adviser
0800 051 5770

PM: “Enough is Enough” for Wind Subsidies

The Conservative Party’s dislike for onshore wind is well known and now Prime Minister David Cameron has called that “enough is enough” for the subsidies available for renewable energy technology and that “frankly the public are fed up” with onshore wind. The same can’t be said of foreign investors however with the news that China’s largest nuclear generator is investing in UK wind.

This divergence of opinion could prove costly for the UK’s fuel mix as controversy around the compromises of wind energy grows.

Cameron believes that with onshore wind due to contribute 10% of all the UKs electricity needs (if all those wind farms in the planning system are built) then that is a sufficient enough level to ‘balance’ the UK’s energy supply and at that point the subsidies available should be removed.

Cameron said:

“We don’t need any more of these subsidised onshore wind farms so let’s get rid of the subsidy, put them back into the planning system and let them make their case – I suspect they won’t.

“With the reasonable amount of onshore wind we have now, we will have safe electricity supplies as a result, but enough is enough.”

In contrast Cameron defended the subsidy regime that underpins the first new build nuclear plant in the UK in 20 years when discussing the Hinkley Point C development in Somerset.

He said that the subsidy provided to EDF Energy’s new plant of £92.50/MWH was lower than the comparative subsidies provided to offshore wind of £150/MWH – itself not free from recent controversy. However the 35 year Contract for Difference (CFD) term for the nuclear deal remained controversial when compared to the 15 year deals on offer to renewables.

Cameron said:

“We don’t accept we’re treating nuclear favourably compared to renewables. You can’t ask nuclear power station to be there only for couple of years – it is a multi-billion construction project and it needs long life.”

Despite the potential ending of subsidies for onshore wind it remains an attractive proposition for investment with Chinese nuclear generator China General Nuclear Corporation (CGN) acquiring EDF Energy’s onshore wind assets near York, Newcastle and Peterborough

CGN are paying £100m for an 80% stake in the farms and have made clear that the current subsidy scheme has increased the attractiveness of onshore wind and other renewables versus coal and gas-fired plants, because operators receive income at above market prices.

The risk of Cameron’s “enough it enough” mantra is that such attractiveness is diminished leading to the much heralded ‘balance’ of electricity supply being lost. The flip sides remains the controversy of subsidy flowing to foreign investors at the expense of British tax payers. In the world of wind energy things rarely run smoothly.

Indeed offshore wind farms, the Conservative’s preferred wind technology, have also attracted interest of late although of a less positive sort after it has been revealed that in order to keep them operable and to prevent their icing up in cold weather, they need to draw power from the National Grid, at a time when they would be expected to be contributing to and not taking from the network.

This is manna to heaven for the anti-wind lobby with John Constable, of the Renewable Energy Foundation charity claiming that:

“[This is] another example of why wind farms are difficult and expensive to manage”

However Rob Norris, of RenewableUK, the industry body reasoned that:

“The best comparison is to think of how much electricity you’d use to boil a kettle compared to how much an entire village would need to power everything. All generators, including gas and nuclear plants, use some electricity as well as producing it.”

Whilst RWE, the owners of the turbines in question explained:

“All energy generators use a small amount of electricity to keep their systems running smoothly, in the case of wind farms drawing power from either an adjacent operating turbine or the grid.”

With the Government’s anti-wind stance, the death-knell sounded for future subsidy and a growing ennui with the compromises of wind energy stacked against the appetite for investment from foreign business and the need to deliver a balanced and secure supply of electricity, something clearly needs to give or the opportunity will be lost.