Library filed under Taxes & Subsidies from Europe
"This study confirms suspicions that decades of generous subsidies to the wind industry have failed to encourage the innovation needed to make the sector competitive. Bluntly, wind turbines, onshore and offshore, still cost too much and wear out far too quickly to offer the developing world a realistic alternative to coal."
As Scottish households struggle to pay for rising heating bills, it is revealed that more than £18million has been paid out to the owners of Scotland's 19 windfarms to stop them producing electricity when demand is low.
The economic inefficiency of subsidies compounds the electrical inefficiency of wind farms. The U.K. should end its 200-percent subsidies for offshore wind farms, too - and the U.S. should follow suit by ending its own wind-power boondoggles.
"Without subsidies, (wholesale) power prices need to be around 600 crowns ($100) per megawatt-hour to make things fly," Andreas Aasheim, an advisor to Norway's wind energy association Norwea said. But lasting wet weather periods can push power prices down, as was the case this year, reducing the appetite for investment into capital-intensive wind power.
The main reason for the increase in energy costs is the simple fact that generating electricity with wind parks and solar arrays is more expensive. But allowing so many exemptions is taking its toll as well, and a better solution is overdue -- especially because this envious discussion over who's paying and who's not has the potential to chip away at support among the general public for the transition to renewable energy.
The country's four main grid operators said Monday that households will from January see a nearly 50 percent rise in the tax they pay to finance the switchover - from €3.6 cents to €5.3 cents ($6.7 cents) per kilowatt hour. A typical family of four will pay about €250 ($324) per year under the tariff, including a sales tax.
In total, the network operators hope to collect more than 20 billion euros to subsidise renewable energies. ..."The increase in this charge is manageable for many households, but there are also very poor, low-income households which could be negatively affected by this type of price rise," she said.
German Chancellor Angela Merkel's decision to cap taxpayer subsidies for renewable energy is aimed at limiting the political fallout. ...Merkel's government, already preoccupied with tackling the debt crisis in the euro area, is struggling to justify the rising costs to phase out nuclear power and replace it with more expensive wind and solar plants.
"There are significant impacts on the rural economy and the rural environment, all of which probably weren't intended when these things were thought up," he told an event at the Conservative Party conference. "It is not very green to be blighting the economy in one area." His comments came as Greg Barker promised that the Government was dealing with the "never-ending gravy train of green subsidies".
“Margins and pricing continue to remain pressured across the sector which, along with policy uncertainty such as the renewal of the U.S.’s production tax credit, have weighed on the wind industry.” James Evans, solar and wind analyst at Bloomberg Industries.
"Giving tax breaks to wind farm companies is a horrifying idea. These firms are already raking in massive subsidies, which end up on everyone's electricity bills. "Wind farm developers are already piling into places like the Borders," said Professor Ponton, who has worked in the renewable energy field since the 1970s.
Every time electricity bills rise, supporters of wind point the finger at fossil-fuel prices, insisting wind subsidies can't be to blame because all forms of electricity generation are subsidised. This is a blatant untruth. Oil and gas receive no meaningful subsidy, while wind will cost consumers more than £1.8bn in covert subsidy by the end of the year.
Germany's energy revolution is the government's only major project -- but the problems keep piling up. The pace of grid expansion is sluggish, and electricity costs for consumers are rising. The environment minister wants to fundamentally alter the way green energy is subsidized, but will it mean putting the brakes on the entire project?
Wednesday's proposals also coincide with a debate about spiraling electricity costs for private households ...Holger Krawinkel, head of energy issues at the Federation of German Consumer Organizations, said that the plan to pass on costs will further increase the bills that householders have to pay for the planned expansion of renewable energies.
Electricity prices and subsidies at current levels in Sweden may slow growth in wind power unless decision-makers boost targets, according to the Swedish Wind Energy Association.
A senior Whitehall source disclosed that the government was effectively railroaded into making its decision by foreign companies which make hundreds of millions of pounds a year in wind subsidies, which are added to household bills. Company chiefs were alarmed by claims that the coalition dispute was set to drag on into the autumn, sparking uncertainty across the industry.
Mr Osborne said he was “content” to accept a reduction in subsidies of just 10 per cent in the short term. ...some in the Treasury had been pressing for cuts of up to 25%. ...But the compromise offer came with a list of demands aimed at securing a big role for natural gas in Britain’s energy mix.
Ms Wallace's departure comes at a time when the Department of Energy and Climate Change (DECC) is involved in fighting the Treasury over reductions in subsidies for on-shore wind farms.
The chancellor fears overgenerous support for wind power and other renewable sources will deter investment in gas-fired power stations, which he believes offer businesses and consumers the prospect of lower bills in future.
Ministers had been due to announce revised subsidy levels for renewable energy technologies yesterday - a decision originally due in the spring but delayed amid political infighting over the scale of cuts for onshore wind farms.