Back onshore wind in Scotland and Wales government urged

Support for onshore wind with revised subsidies is critical to ensuring cost effective development of vital renewable energy source continues, says new Policy Exchange report.

Antony Oliver
28 August 2015

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Government was this week urged to continue support for onshore wind farms as a route to decarbonisation but only for cost-effective projects in Scotland and Wales.

According to a new report by independent think tank Policy Exchange, support for onshore wind using the Contracts for Difference with an early closure of the current Renewable Obligation (RO) subsidy  would halt development in England but allow vital and economic schemes in Scotland and Wales to continue to deliver low carbon energy to the grid.

“Analysis by the Department of Energy and Climate Change (DECC) suggests that onshore wind is already the cheapest major form of low carbon power generation available in the UK,” Policy Exchange

“Ultimately, this will lead to a saving for UK consumers versus alternative ways to meet decarbonisation objectives,” says the report. 

“The Government has recognised the important contribution that onshore wind makes towards meeting the UK’s decarbonisation. However, the new Government has changed the direction of onshore wind policy, committing to “halt the spread of subsidised onshore wind farms” and making significant changes to onshore wind subsidies and planning policies,” it adds. 

The report “Powering Up” by takes a look at the future of onshore wind in the UK and the role it can play in meeting decarbonisation targets and renewable energy commitments. Onshore wind, it says, is now the UK’s largest source of renewable energy, with more than 8GW of operational capacity meeting 5.6% of the UK’s electricity needs. 

However it points out that more than 60% of existing, consented, and planned onshore wind farms in the UK are located in Scotland. And with the onshore wind industry now supporting some 13,600 jobs across the UK, in project development, manufacturing, construction, operations, and maintenance, it is vital that government policy continues to support appropriate development “in a form where subsidies are progressively removed and communities have more of a say.”

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The report makes a number of recommendations to clarify and simplify the financing and planning rules around development of onshore wind including the need for government to “fast-track the Energy Bill to minimise uncertainty concerning the early closure of the Renewables Obligation for onshore wind developers”.

The RO model to support low carbon generation is scheduled to close in March 2017. However government has stated its intention is to bring this date forward to March 2016 for all new onshore wind projects leading to significant market uncertainty.

Instead, Policy Exchange says, “Government should revise down ‘administrative strike prices’ in the CfD auction to cap the amount payable to new and repowered onshore wind projects. The cap should taper downwards to achieve a reduction in subsidies to onshore wind, whilst also recognising that fossil fuel generators (such as gas) also receive subsidy payments.”

The report also proposes a number of changes to support the planning decision making process for onshore wind which is now driven locally but urges the government to adopt the core principle of a “presumption in favour of sustainable development” provided that developments demonstrate community backing.

"A moratorium on onshore wind is likely to lead to a higher cost to consumers of meeting decarbonisation objectives.”

“Analysis by the Department of Energy and Climate Change (DECC) suggests that onshore wind is already the cheapest major form of low carbon power generation available in the UK,” says the report. “Our analysis suggests that there is significant scope for further cost reduction if onshore wind continues to be deployed in the UK.

"A moratorium on onshore wind is likely to lead to a higher cost to consumers of meeting decarbonisation objectives.”