UK warned of onshore 'shockwaves'
Industry body RenewableUK has warned Britain’s government it risks sending damaging “shockwaves” through the country’s onshore wind sector if it rushes into auction-based support.
The UK Department of Energy and Climate Change (DECC) today confirmed it is inclined to introduce competition immediately for established low-carbon technologies from the outset of its new Contract for Difference (CfD) support regime in 2014.
The final decision will not be made until early next year, but onshore wind is expected to be part of such a group and face battling it out for a share of a set pot of support.
That would keep the UK in line with the European Commission’s direction of travel, as outlined in its draft guidelines for future member state support for renewables.
DECC said today: "The new state aid guidelines will require the UK to move to competition for more established technologies. In addition, the pipeline of projects under development in the UK in established technologies is strong enough to permit earlier introduction of competition."
But RenewableUK warned DECC not to risk destabilising investment into the onshore sector, which has already seen its CfD strike prices reduced since the first draft proposals.
Deputy chief executive Maf Smith said: “There are already substantial cuts planned for onshore wind support, and plunging onshore wind into an auction process adds more risk and could be severely detrimental.
“Any move to auctions will need to be very sensitively done, and will have to be shown to have a clear economic case,” added Smith.
“Auctions being introduced at the start of the regime (in 2014) risks sending shockwaves through the industry – we’re talking about projects that will have been developed years previously, with substantial money having been invested in bringing them to consent.”