Articles filed under Taxes & Subsidies from UK

Bonanza for old wind farms as bottlenecks hit new turbines

The large subsidies paid by British electricity consumers to fund the drive towards wind power are generating sizeable profits for existing wind farm owners without producing many new turbines. The UK needs a massive expansion of wind energy to meet government climate change targets, and the amount of subsidy paid to renewable electricity generators through consumers' electricity bills will rise from more than £600m ($1.2bn, €800m) a year to £3bn a year by 2020. But the format of the subsidy system, known as the renewables obligation (RO), combined with bottlenecks in the planning system, mean these cash injections are simply enriching the operators of existing wind farms well beyond their expectations. "The RO is a very expensive way of providing support for renewables," said Andrew Wright, managing director of markets at Ofgem, the electricity regulator.
4 Feb 2008

Setback for wind farm push

The large subsidies paid by electricity users to fund the drive towards wind power are generating profits for existing wind farm owners - without producing many new turbines. A huge expansion of wind energy is needed to meet the government's climate change targets, and the amount of subsidy paid to renewable power generators through consumers' electricity bills will rise from more than £600m a year to £3bn a year by 2020. Most customers are unaware of this, as it does not appear on bills. But the format of the subsidy system, known as the renewables obligation (RO), combined with bottlenecks in the planning system, mean these cash injections are enriching the operators of existing wind farms well beyond their expectations. The proportion of electricity coming from renewable sources has scarcely budged in recent years - it rose from 4.2 per cent in 2005 to 4.6 per cent in 2006, the latest year for which government figures are available ...
4 Feb 2008

Wind farms turn huge profit with help of subsidies

Lavish subsidies and high electricity prices have turned Britain's onshore wind farms into an extraordinary moneyspinner, with a single turbine capable of generating £500,000 of pure profit per year. According to new industry figures, a typical 2 megawatt (2MW) turbine can now generate power worth £200,000 on the wholesale markets - plus another £300,000 of subsidy from taxpayers. Since such turbines cost around £2m to build and last for 20 or more years, it means they can pay for themselves in just 4-5 years and then produce nothing but profit. The lucrative outlook has led to a surge in planning applications for new windfarms.
27 Jan 2008

EU plans to see our economy blown away

Few might guess, from the two-dimensional reporting of these plans in the media, just what a gamble with Europe's future we are undertaking - spending trillions of pounds for a highly dubious return, at a devastating cost to all our economies. The targets Britain will be legally committed to reach within 12 years fall under three main headings. Firstly, that 15 per cent of our energy should come from renewable sources such as wind (currently 1 per cent). Secondly, that 10 per cent of our transport fuel should be biofuels. Thirdly, that we accept a more draconian version of the "emissions trading scheme" that is already adding up to 12 per cent to our electricity bills. The most prominent proposal is that which will require Britain to build up to 20,000 more wind turbines, including the 7,000 offshore giants announced by the Government before Christmas. To build two turbines a day, nearly as high as the Eiffel Tower, is inconceivable. What is also never explained is their astronomic cost.
26 Jan 2008

Blowin' in the Wind

If you thought the 2008 presidential race was shattering all records for windy rhetoric, it's nothing compared to the political eco-rhetoric being spun to US taxpayers -- to get them to cough up billions of dollars to fuel a renewable wind power industry boom sensible investors won't touch with a turbine's rotor blade. ...Wind power sounds a great European success story -- one to be echoed in the US, it seems, as 2008 is set to see wind power developments shatter records for the fourth consecutive year. However, a closer look at the European "success" story reveals that all is not quite as it seems. Wind seems to be blowing in the mind of the politically correct and those on the recent environmentalist bandwagon but the cost is going to be huge, no companies will plunge into it without massive government subsidies and, if actually built, power reliability will take a nosedive. ...The bottom line is that the renewables debate, and investment in it, is as much about ideology and political belief as it is about economics and environmental issues. When the real cost of turbine power as a major player toward our future power needs is assessed, the answer just ain't "blowing in the wind".
23 Jan 2008

Wind farming at any cost

When there is considerable debate over future financial prospects of an industry, it's hard to argue over the present value of an asset. But some Scottish & Southern Energy investors are bound to raise eyebrows over the €1.46 billion it's just paid for wind-farm operator Airtricity. After all, it costs roughly £1 million/MW to set up a modern windmill. Airtricity has 600 MW of assets built up and permission to build another 963 MW of assets. Which means that if Scottish & Southern had set up the mills on its own, it would have cost roughly £1.6 billion. In buying Airtricity, it's now likely to end up paying nearly £3 billion. Scottish & Southern has warned investors the deal won't enhance earnings until 2011. Scottish & Southern's problem is the scarcity value of wind-power assets as the EU's energy policy makers have set a renewable-energy target of 20 per cent of total supply by 2020. The UK has a self-imposed target of 10 per cent by 2010.
8 Jan 2008

SEP head ‘cautious’ on green energy

Paterson said although alternative energies would undoubtedly become very important in years to come, there was "little clarity" in the sector at the moment. Many fundamental questions remain about how to best capture and transmit energy from natural sources, making it difficult to assess the potential effectiveness of new innovations. However, Paterson said the biggest barrier was the fact that the sector is heavily regulated and influenced by government. Much of the current interest in alternative energies is being driven by strong support from Europe, the UK and the Scottish Government. "But from an investor's point of view, we have got to think about the long term," Paterson said. "What happens if the government changes, or priorities shift?"
30 Nov 2007

Windfarm policy rewards energy companies

Millions of pounds of subsidy is pouring into the coffers of multinational energy companies while grave doubts remain about how much renewable energy is actually being produced and how best it can be fed into the national grid. No account is being taken of the damage being done to the finest wild landscapes of western Europe, the consequences for the Scottish tourist industry or the visual impact of enormous wind turbines on local communities and outdoor recreation interests.
3 Sep 2007

Ill wind blows for home micro-generators

Suppliers of mini-wind turbines and solar panels for the home have reported falls of up to 90 per cent in customer enquiries after the Government cut subsidies in May. While Energy minister Malcolm Wicks and Conservative leader David Cameron struggle with the vagaries of the UK's planning system (see below) to get their wind turbines erected, fewer ordinary households are now even bothering to apply.
23 Jul 2007

Islands urge cut in green energy costs

The cost of connecting green energy schemes in the Scottish islands to the National Grid is untenably high and should be cut, according to a new report. Orkney, Shetland and the Western Isles are seen as having huge potential for renewables, but regulations form a barrier to unlocking the resources. The report was drawn up by Xero Energy (XE) for Highlands and Islands Enterprise (HIE) and the three island councils, which are all promoting renewable-energy projects. It suggests charges are against EU rules on grid connections and could be challenged through legal action.
17 Jul 2007

Why the answer isn't necessarily blowing in the wind

Driven by concerns about climate change and security of electricity supply, public and political commitment to renewable energy has never been stronger. Generous financial support and market interventions have encouraged extremely rapid deployment in many European states and it is now a commonplace of the financial press that environmental business has become mainstream. And so it should. But some are now asking whether this rapid growth, and politically-driven target setting at local and national level, is creating a secure position for environmental technologies, one grounded in the realistic perspectives of engineering and science, or, on the other hand, a mere flash in the pan caused by speculative, subsidy-hunting developments. A wealth of data about the renewable energy experiment worldwide, and particularly in Europe, is now slowly emerging, allowing decision makers to evaluate the success of their policies. These results, as you would expect of real-world data, are mixed, and as we all get to grips with the implications, a change in the way the renewable energy sector operates is likely.
16 Jul 2007

Mad rush for wind sweeps in extra cash for farmers

Farmers and landowners should be aware that changes in the way green electricity will be funded mean there is currently strong demand for wind farm sites. The current system, that beefs up the income from onshore wind farm sites by up to 50%, is due to be changed in 2010 or soon after to favour offshore wind farms as they are considered more acceptable to the public rather than on shore ones. "Wind farm companies are going hell for leather to find onshore sites and agree terms with landowners during 2007," notes head of Fisher German's renewables team Mark Newton. "It's a lengthy planning process to get a site approved which normally takes three to five years, and they need to get a project agreed and built before the system changes. Otherwise the site will not be as profitable for the landowner and the wind farm company."
17 Jun 2007

The inconvenient truth about the carbon offset industry

It is 20 months now since British Airways proudly announced a new scheme to deal with climate change: for the first time, passengers could offset their share of the carbon produced by any flight by paying for the same amount of carbon to be taken out of the atmosphere elsewhere. "I welcome warmly this move from BA," said the then environment minister, Elliot Morley. And how much carbon has BA offset from the estimated 27m tonnes which its planes have fired into the air since that high-profile moment in September 2005? The answer is less than 3,000 tonnes, less than 0.01% of its emissions - substantially less than the carbon dispersed by a single day of its flights between London and New York. The scheme has been, as BA's company secretary, Alan Buchanan, put it to a House of Commons select committee earlier this year, "disappointing".
16 Jun 2007

Energy prices must rise to fight climate change

Declaring that climate change is a real and serious threat won't raise too many eyebrows these days. But where the debate really starts to warm up is in asking how much energy consumers should pay towards eradicating the threat of climate change. Soundings by Ofgem suggest that most people expect a reduction in emissions to come at a price. What's not clear is whether the amount people anticipate paying will match what they may be asked to pay.
12 Jun 2007

Green energy tariffs ‘not always what they seem’

Green energy tariffs that promise customers environmentally friendly electricity supplies face official scrutiny amid concerns that customers are not getting what they pay for. Ofgem will today outline plans to create a ratings scheme to highlight the most planet-friendly packages. The regulator is working with the Energy Saving Trust to determine a set of criteria under which the best schemes will be awarded five stars.
5 Jun 2007

U.K. announces solar, wind grants

LONDON, May 25 (UPI) -- The British government Friday said grants will be made available again for those who want to install micro-wind turbines and solar panels on their homes. The Department of Trade and Industry's Low Carbon Buildings Program has already allocated more than $13.5 million to householders and, following the addition of an extra $11.9 million in the national budget, applications are set to open Tuesday for an estimated $23.6 million remaining.
25 May 2007

New ‘green’ energy will come at a high price for everyone

Energy has a price - as consumers we are painfully aware of it when the gas bill surges or the cost of a litre of petrol catches us by surprise. When it bites our wallets we tend to blame oil companies, Middle Eastern sheikhs or Russian oligarchs, depending on prejudice or the last news headline. Less understood is the political price of energy, but it was the hidden message in the reams of paper published yesterday by Alastair Darling, the Secretary of State for Trade and Industry. For years the Government ignored the warnings about crumbling nuclear plants and the need to scrap dirty coal power stations. Finally someone has grasped the uranium fuel rod.
24 May 2007

Hard wind

Marshland St James is an isolated, functional, centre-less village, little more than a ribbon of houses along a country road surrounded by farms. In the far west of Norfolk, close to the borders with Lincolnshire and Cambridgeshire, it is a place that locals describe as "bandit country". It is not a place you expect an issue of national importance to find its focus. But on Monday, just a few days before the government released its white paper on energy, a local farmer was found dead in a drainage canal close to his home. A statement from his family linked his death to a battle over wind farms that has torn the village apart.
24 May 2007
back to top