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Onshore wind subsidies cut but payments to offshore turbines increased
Credit: By Emily Gosden, and Georgia Graham | Telegraph | 04 Dec 2013 | www.telegraph.co.uk ~~
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Fewer new onshore wind farms will be built as a result of a 5 per cent cut to proposed subsidies, announced by ministers on Wednesday.
But subsidies for more expensive wind farms that are built out at sea will be increased, following lobbying from the industry.
Wind companies will be guaranteed payments several times higher than the current electricity price for any power they produce for 15 years.
Industry sources said the cut to subsidy levels – which will be reduced by 5 per cent from draft levels – would see some “marginal” projects which are smaller or more expensive scrapped.
However, dozens of new onshore wind farms are still likely be built, disappointing those who hoped for an end to the controversial technology.
In June, ministers announced that onshore wind farms built until March 2017 would receive a subsidised price of £100 for every ‘megawatt-hour’ unit of power they produce – about double the market price, falling to £95 for projects from April 2017.
The new levels announced on Wednesday are £95 until March 2017, falling to £90 thereafter.
Offshore wind farms are significantly more expensive than onshore turbines, at about three times the market price of power. But the industry had claimed that proposed subsidies set out in June would see subsidy levels cut too steeply over the rest of the decade.
After months of lobbying ministers have agreed to increase by £5 to the level of subsidy offered for 2018-19 but plans are otherwise unchanged from draft levels.
Chief Secretary to the Treasury Danny Alexander has described the shift in the subsidies as “a rebalancing” and said overall spending would not change.
The change is necessary because there has been so much investment in onshore wind and solar energy that they no longer needed so much state support, sources from both coalition parties said
In contrast, they said, offshore wind sources still needed more subsidy to encourage long-term investment.
One Conservative source told the BBC he expected “quite a dramatic cut” in prices for onshore wind in 2015 and beyond. Another spoke of the “beginning of the end for mature renewables”.
It is also thought that the policy will help to counter the threat from UKIP which opposes all wind farms on principle.
Mr Alexander denied suggestions the move was in response to Tory MPs unhappy at wind farms being sited in their constituencies.
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