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UK cuts onshore wind and solar PV funding

The UK government has reduced financial support for onshore wind and solar PV, but has increased the incentives available for offshore wind.

As reported in the Treasury’s National Infrastructure Plan 2013 by the Financial support for onshore wind has been reduced by £5/MWh from 2015 onwards compared to the draft strike prices which were published in the summer; £100/MWh in 2015/16 has fallen to £95/MWh, and £95/MWh in 2017/18 has dropped to £90/MWh.

However, the reduction in financial support for offshore wind is less steep than had been mooted in the draft strike prices – for the financial year 2018/19, the level of support has been increased by £5 per megawatt hour, from £135/MWh to £140/MWh.

Trade association RenewableUK said that it welcomed the news.

 “We welcome the fact that the Government has heeded the wind industry’s call for a more realistic level of financial support for offshore wind,” said deputy chief executive Maf Smith. “It sends an important political signal that the Government recognises the need to back this sector, if we are to attract big wind turbine manufacturers to the UK to open up factories creating tens of thousands of jobs. The Chief Secretary to the Treasury Danny Alexander said today he wants at least 10 gigawatts of offshore wind installed by 2020, trebling current capacity. Industry can deliver this and more.

“Obviously any reduction in support for onshore wind is unwelcome, and the Government had promised that any drop would be based purely on economic evidence. Onshore wind is the most cost-effective form of renewable energy we have, so if we want to keep energy bills as low as possible, we need to ensure the level of support is right. Our challenge to Government is that it must work with industry to help us to reduce costs and support the right projects. The reduction means that some smaller projects such as community led schemes will be lost.

“If this cut has been made for political reasons rather than economic ones that would be a worry. All politicians need to understand that uncertainty spooks investors and it is the consumer who bears that cost. Voters support the development of on and offshore wind, so we now need a period of calm and consistency from Government.”

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