It is a move that will save British taxpayers hundreds of millions of pounds per year in the future. But it will probably lead to a protracted legal battle as industry leaders are not amused about London's initiative.
Britain would scrap all new subsidies for onshore wind farms from April 1, 2016, the Department of Energy and Climate Change (DECC) said Thursday. By doing so, the government would close the Renewable Obligation (RO) support scheme for new onshore wind farms earlier than expected, it added.
Under the RO, onshore wind projects built before March 2017 would have automatically received funding, but the scheme will now close a year early.
More than once in the past, the UK's renewable energy industry had warned the Government’s new Climate Secretary Amber Rudd that she would face a legal challenge if she was going to cut subsidies earlier than planned. The industry body Renewable UK called it a "wilful destruction" of the industry by retrospectively curtailing subsidies.
"This is a blow, not just to the industry, and could damage our reputation as a good place to invest in energy infrastructure," said Katja Hall of the Confederation of British Industry (CBI).
The ministry seemed to be unperturbed by such criticzm. "We want to help technologies stand on their own two feet, not encourage a reliance on public subsidies," DECC said.
However, up to 5.2 gigawatts of onshore wind capacity projects that already have planning consent, grid connection deals and land rights could be eligible for grace periods, the ministry added.
According to the Department of Energy and Climate Change figures, in 2014, state subsidies of 800 million pounds (1.1 billion euros, $1.3 billion) helped onshore wind generate 5 percent of Britain's total electricity supply.
tko/ hg (Reuters, FT)