After months of speculation, the UK Government has announced its plans to revise funding and support for the renewable energy industry. And whilst subsidies for onshore wind and solar energy projects have been reduced, it’s good news for offshore wind in particular.
The Treasury’s National Infrastructure Plan 2013, published in early December, outlines the new strike prices for each area of the energy industry. And whilst onshore wind will see a drop in its current strike price (£100 per MWh) of £5 per MWh every year from 2015 until 2019, offshore will receive a boost of £5 per MWh in 2018-2019, taking the strike price to £140 per MWh.
The extra support for offshore wind comes at a crucial time, with a number of Round 3 projects due for completion by the end of the current decade. Together, these will add an extra 2GW of clean energy to the generation mix, helping the UK reach its target of producing 30% of all our electricity by renewable means by 2020.
Reactions to the Plan from the renewables industry have been mixed, with the increased support for offshore wind, geothermal and hydroelectric technologies being welcomed. The Solar Trade Association (STA) was also happy, despite having its strike prices reduced, as it will still receive higher subsidies than it asked for.
However, a note of dissent has been struck by the reduced support for onshore wind. Industry body RenewableUK questioned whether the decision was economic or political, pointing out that: ‘Onshore wind is the most cost-effective form of renewable energy we have, so…we need to ensure the level of support is right. The reduction means that some smaller projects such as community led schemes will be lost.’
On a brighter note, Energy and Climate Change Secretary, Ed Davey, has announced that 16 renewable energy projects – 12 of them offshore – have now been assessed as viable and invitations to tender will soon be issued. Government support has also been confirmed for the construction of a new nuclear power plant at the Wylfa site in Anglesey.
Wilding says: ‘The latest National Infrastructure Plan is a real mixed bag for renewables. It’s good to see the Government turning words into action by supporting offshore wind, but worrying to see the forthcoming cuts for onshore projects. Let’s hope that Ministers support the right projects in the future so we can maximise the potential of renewables as a whole.’
Sources: Business Green and RenewableUK
