By Chris Hopson in London
Wednesday, December 04 2013
Updated: Wednesday, December 04 2013
The Treasury today published a list of final “strike prices” for generating electricity from renewables in its national infrastructure plan, cutting support for onshore wind farms and solar parks, while raising them for wind projects out at sea.
Prime Minister David Cameron has faced stiff opposition from Conservative members of parliament and rural communities to wind farms and solar parks.
In addition he is under pressure from the growing political support for the UK Independence Party, which is strongly opposed to renewables.
Today’s announcement gives much needed clarity to investors, who can now calculate their guaranteed returns on renewable energy projects until the end of the decade.
The strike prices for onshore wind parks were cut by £5 from the provisional figures to 2019. Strike prices for large-scale solar plants were reduced by £5 for 2015-2017 and lifted by £5 in 2017-2018 and £10 in 2018-2019.
“At first glance, it would be easy to say these changes are going to affect onshore wind and solar massively,” says David Ferris, who leads the energy & utilities team at legal advisers Osborne Clarke.
“But the devil’s in the detail, and the information being released today shows the changes are more in line with the accepted and continuing movement towards tapering off of subsidy levels as technology matures and costs reduce, reflecting the strength and maturity of the UK onshore renewables industry.
“If we’re not careful, we’ll lose sight of the really important detail here: this only affects future onshore solar and wind projects that are over 5MW and are not yet accredited. In short, there’s lots of great renewables projects that this simply doesn’t affect,” Clarke adds.
Gina Hanrahan, climate and energy policy officer at WWF Scotland, said while a successful subsidy regime is one that goes down over time, that it is essential that the revisions to support for onshore wind and solar are based on the economic evidence and reflect the maturity of the technologies.
But Matt Brown, director at energy consultancy Poyry, warned that “reducing strike prices for onshore wind and solar could reduce deployment of these technologies, even though they require lower subsidies than offshore wind”.
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