Last week, the UK government announced it was to end subsidies for onshore wind farms in the country by closing down the Renewables Obligation (RO) a year early, from 1st April 2016. The decision has generated widespread debate, particularly with regard to its likely effects on the UK renewable energy sector as a whole, on investment and on the country’s renewable energy and climate change targets.
Furthermore, the government hasn’t clarified what technologies it will now rely on in order to ensure the country meets its targets on time.
Amber Rudd, the UK energy secretary has maintained that the government will be able to meet its stated objective of 11 to 13 GW of onshore wind energy by 2020, according to the Electricity Market Reform Delivery Plan. She believes that the UK now has enough onshore wind in the pipeline, including projects with planning permission, in order to meet the target comfortably. According to trade association RenewableUK, onshore wind currently provides over 5,000 MW in the UK with projections by the industry indicating a likely installed capacity of 12 to 14 GW by 2020, representing over 10 percent of the UK’s annual electricity demand.
However, the problem is that the UK is behind progress in other areas of the UK renewable energy economy, notably renewable heat and transport. That in turn means the country will be unable to meet its 2020 target unless renewable electricity provides in excess of 30 percent of UK electricity supply. There is some comfort in the prediction that 5.2 GW could be built through the ‘grace period’ exemptions to the RO allowed by the Energy Secretary. Furthermore legal action could enable a small number of extra projects to proceed while sub-5MW projects could continue under the existing Feed-in Tariff. However, there is an added problem in that the rules have been changed so that local authorities cannot, now, approve wind farm projects unless they have already been approved in the local plan.
John Coultate, Head of Condition Monitoring and EU Sales at Romax Technology, believes that the decision will force the UK to increase innovation across the wind industry, particularly with regard to cost reduction.
“Despite the government’s decision to remove subsidies for onshore wind farms, the UK must press ahead and continue to cement its position as a global leader when it comes to renewable energy and in order to do this effectively it must be prepared to play to its strengths, notably within offshore wind energy” Mr Coultate said.
There may be another option, which is for smaller community projects of under 5 MW to help fill the gap. In Germany and Denmark the majority of projects are developed along a community ownership model in which local communities bear the brunt of purchasing, installation and maintenance enabling individuals to share the resulting revenue. However, Ms Rudd’s statement seemed to indicate that the government would consider support for community projects with no more than 1 or 2 turbines at best.
Furthermore, it’s unlikely that community energy projects would be able to assist anyway. A member of Bristol Energy Network, when asked about this commented that he doubted that the capacity of the community energy sector would really make much of a difference to overall electricity production.
In other words, until the Energy Secretary clarifies how the government intends to cover any shortfall, the situation will remain confusing, with a perceivably detrimental effect on investor confidence.
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