The National Infrastructure Plan, announced on Wednesday, revealed details about the levels of financial support for onshore and offshore wind farms between 2015 and 2019.
It showed that government support for onshore wind will drop from £95/MWh in 2015/16 to £90/MWh from 2017/18.
Subsidies for offshore wind projects are also set to decline, but the reduction in government support is less steep than had been outlined in the draft strike prices published in the summer.
Following industry lobbying, the government will now only reduce its support for offshore projects from £155/MWh in 2015/16 to £140 MW/h in 2017/18.
What is of most concern to us at ethical partnership is that the emerging community renewable sector where we have a number of clients will be affected the most. What spooks investors and communities is uncertainty – the government must now work to ensure there is a period of stability in the sector.
Onshore wind is the most cost-effective form of renewable energy and so if we want to keep energy bills as low as possible, we need to ensure the level of support is right. Although the costs of deployment for medium and large scale wind continue to fall those of small scale seem stubbornly fixed. And its for these that the associated costs imposed by local planning authorities remain unreasonably high and a barrier to deployment. The reduction certainly means that some of our smaller projects including community led schemes will be lost.
Certainly some of our clients confidence would take a knock following the announcement and it’s almost certain that it will reduce the deployment of onshore wind. It has undermined onshore wind before it reaches maturity and by substituting it with more expensive low-carbon energy, the cost to the customer will increase.