UK announces new subsidy profile for renewables

• 12 years ago (2011-10-21)
• Junior Isles

Europe 1061 Renewables 752

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The UK Department of Energy and Climate Change has announced the new levels of government support for different kinds of renewable generation under the Renewables Obligation (RO) from 2013-2017.

Offshore wind (for projects accredited in 2016-17) will receive a 10 per cent cut in support to 1.8 Renewables Obligation Certificates (Rocs) per MW generated. Projects accredited in 2015-16 will receive 1.9 Rocs. Support for onshore wind over the 2013-2017 period will be reduced to 0.9 Rocs.

The government is also set to increase support for biomass, while Rocs for coal stations that convert to biomass will be reduced from 1.5 Rocs to 1 Roc, that will be grandfathered. There will also be a new band for enhanced co-firing, set at 1 Roc. Energy minister Charles Hendry said that would encourage coal generators to convert to biomass, which delivers dispatchable power.

Wave and tidal generation will also receive 5 rocs for projects up to 30 MW completed by 2017 although support for tidal barrages will reduce over the period.

The offshore wind industry been taken by surprise by this subsidy cut, but has so far made no motions of official complaint.
Maria McCaffery, chief executive of RenewableUK, said the offshore wind sector had only heard rumours of a reduction in support two weeks ago. "We were taken a little by surprise... but it could have been a lot worse," she said today.

"Any reduction in financial support will have an impact on the industry, reducing deployment, and potentially jeopardising momentum as we strive to reach our carbon reduction targets. However, we recognise the need to drive down costs across the sector, especially offshore,”, she said in an official statement.

Energy secretary Chris Huhne has said the reductions are about delivering value for money. He said the reduced Rocs would still be enough to attract turbine manufacturers such as Siemens and Gamesa to the UK, and that the biggest savings to be made were from the benefits of this kind of UK-based supply chain.

Centrica managing director Mark Hanafin welcomed government's support for renewables but indicated the cut to subsidies would mean the company would "re-examine the economics" of some projects, including its next two offshore wind projects.

"In our view, these levels will only affect very marginal projects," said Huhne. He denied that the cuts to onshore wind subsidies would have an impact on smaller, community onshore wind schemes, as RenewableUK had earlier suggested.