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Cut looms for wind turbines in subsidy switch

Scottishpower is planning to pull the plug on more than 1,000 onshore wind turbines if the Westminster government cuts millions of pounds of subsidy from the industry. The Department of Energy and Climate Change (DECC) has launched a review of taxpayer-funded subsidies that is expected to lead to the payments being switched to giant offshore wind farms.

Scottishpower is planning to pull the plug on more than 1,000 onshore wind turbines if the Westminster government cuts millions of pounds of subsidy from the industry.

The Department of Energy and Climate Change (DECC) has launched a review of taxpayer-funded subsidies that is expected to lead to the payments being switched to giant offshore wind farms.

A report commissioned by ScottishPower reveals that a quarter of onshore wind farms planned for the UK could become uneconomic if financial support is cut by an anticipated 25 per cent.

Of these, more than 70 per cent are in Scotland, which would mean the equivalent of about 2.3 gigawatts of wind power going unbuilt - some 1,080 average-sized turbines; almost as much as the wind power currently installed.

Any attempt by the government to save taxpayers' money by slashing onshore wind subsidies could backfire - eventually costing the public more than 200m extra a year by 2020, the report says. This would result from renewable energy developers turning their focus to more expensive offshore wind farms, which attract higher subsidies.

Developers of small, community-based wind farms say they also fear the subsidies on which they... more [truncated due to possible copyright]  

Scottishpower is planning to pull the plug on more than 1,000 onshore wind turbines if the Westminster government cuts millions of pounds of subsidy from the industry.

The Department of Energy and Climate Change (DECC) has launched a review of taxpayer-funded subsidies that is expected to lead to the payments being switched to giant offshore wind farms.

A report commissioned by ScottishPower reveals that a quarter of onshore wind farms planned for the UK could become uneconomic if financial support is cut by an anticipated 25 per cent.

Of these, more than 70 per cent are in Scotland, which would mean the equivalent of about 2.3 gigawatts of wind power going unbuilt - some 1,080 average-sized turbines; almost as much as the wind power currently installed.

Any attempt by the government to save taxpayers' money by slashing onshore wind subsidies could backfire - eventually costing the public more than £200m extra a year by 2020, the report says. This would result from renewable energy developers turning their focus to more expensive offshore wind farms, which attract higher subsidies.

Developers of small, community-based wind farms say they also fear the subsidies on which they rely will be cut.

Such a savage reduction in onshore capacity would, experts say, undermine the Scottish Government's intention to meet all electricity demand north of the Border from renewable sources by 2020.

The DECC said its review aims to ensure that the huge subsidies to the booming renewables industry are spent on investing in the right technologies. Onshore wind is now seen as a mature industry capable of generating profit with less financial support.

The report commissioned by ScottishPower, one of Scotland's biggest investors in onshore wind, examines a reduction in financial support of between 10 and 25 per cent.

Banding scenarios; impacts on onshore wind deployment, by Oxera Consulting Ltd, says: "Any reduction in onshore wind banding is likely to reduce onshore wind deployment. Substituting this with increased offshore wind deployment would lead to a significant increase in costs."

Oxera calculated that a 25 per cent reduction would make a quarter of planned UK onshore wind farms uneconomic and cost the taxpayer up to an extra £256m a year - through additional subsidies to offshore farms - by 2020.

Keith Anderson, renewables director at ScottishPower, said: "To meet our challenging carbon reduction targets it is essential Scotland and the UK get the most from our abundance of renewable resources.

"The current system is working well and has given investors confidence. While there is a great deal of attractiveness in offshore wind development, particularly in terms of inward investment potential, onshore wind is the maturest and most economic renewable technology. Its continued development is essential if we are to meet our 2020 targets."

Niall Stuart, chief executive of Scottish Renewables, said: "A 25 per cent cut in support for onshore wind would stop a large chunk of planned projects in their tracks, reducing development and generation from onshore wind - the most competitive technology that can be deployed at scale today. This would undoubtedly undermine progress towards the UK's and Scotland's 2020 renewables and climate change targets, and would also mean we would need greater levels of electricity generation from more expensive technologies which are eligible for higher levels of support, paradoxically pushing up costs to consumers."

Bonnie Priest, financial director at Carbon Free Developments, a small, Stirling-based company that specialises in community wind farms, said: "It's interesting that the big players are as worried as we are. In some ways they have big portfolios so they can spread their risk. I think players like us will be hardest hit.

"It will impact on whether we do any more community wind farms. It will significantly change the risk profile if the potential value of consented wind farms reduces. ScottishPower is absolutely right. Wind farms will not be economic and any other small developer would say exactly the same. It's a very serious issue."

Onshore wind has been the world's fastest-growing renewable energy source since 2003. There are 308 operational wind farms in the UK, using 3,413 turbines to generate 5.7gW of electricity. Hundreds more are in the pipeline.

Companies are now increasingly focusing on the potential for dozens of offshore schemes around the UK coast, including in the Moray Firth and off Tiree. However, as a newer sector, with greater costs, it is currently supported by 50 per cent more subsidy per megawatt hour generated than onshore wind.

The UK government expects the results of its review before the end of the year. A DECC spokesman said: "It is vital that our support for renewable electricity encourages investment and represents value for money. We will shortly be consulting on support levels for all renewable technologies."


Source: http://news.scotsman.com/sc...

AUG 28 2011
https://www.windaction.org/posts/31767-cut-looms-for-wind-turbines-in-subsidy-switch
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