The Government is pushing ahead with its commitment to end public subsidies for onshore wind farms, by closing the Renewables Obligation across Great Britain from 1 April 2016.
But today in amendments announced in the Energy Bill – just hours after we reported that the Scottish Energy Association had raised these issues with UK Energy Minister Amber Rudd – the government has now set out the grace period criteria and the nine-month timescale to provide further certainty for investors.
The Department for Energy (DECC) estimates that around 2.9GW of onshore wind capacity will be eligible for the grace periods, meaning that bill payers will be protected. The projects that are eligible for the grace period will need to demonstrate either that they had: –
- Planning consent as at 18 June 2015
- That they have successfully appealed a planning refusal made on or before 18 June; or
- That they have successfully appealed after not receiving a planning decision due by 18 June.
- They will also need to show that they had a grid connection and land rights in place.
Projects that meet all these criteria and can demonstrate that they have struggled to secure finance from lenders since 18 June will be allowed extra time – but no longer than nine months.
Energy Minister Lord Bourne said: “In total, the amount of onshore wind capacity that could be deployed by 2020 is still 12.3GW and will ensure we meet our renewable energy commitments.
“We have a long-term plan to keep the lights on and our homes warm, power the economy with cleaner energy, and keep bills as low as possible for hard-working families and businesses.
“To do this we will help technologies stand on their own two feet, not encourage a reliance on public subsidies. By bringing forward these amendments we are protecting bill payers whilst meeting our renewable energy commitments.”
A UK Renewables spokesman said: “This announcement means that wind farm companies can now go ahead and fully invest in local wind farm projects. It’s good to see that Government has acknowledged the financial uncertainty caused by these changes and the additional time offered will help rebuild investor certainty.
“It’s important that industry works with Government and Parliament to ensure these amendments are incorporated and the Energy Bill gets on the statute books as soon as possible. It is only then that developers can deliver the level of new capacity the Government wants to see by 2020.
A Scottish Renewables spokesman commented: “While we need to assess the precise impact of the announcement, it is clear that government has sought to address some unintended consequences of the decision to close the RO, for example, giving more time to projects unable to access finance because of the uncertainty created by the closure.
“However, many of our members will be bitterly disappointed that ministers are not going to allow projects which have submitted planning applications to be given a grace period.”
“It is still our position that the UK Government’s rationale for removing financial support for onshore wind was unjustified. It is a course of actions that will, according to their own assessments, save just 30p on annual consumer energy bills and increase the UK’s carbon emissions by 63 million tonnes.”