Reduced backing for onshore wind 'will damage viability'

Proposals put forward by the government to cut financial support for onshore wind farms will mean fewer planning applications being submitted for small-scale wind energy projects and could result in a 13 per cent drop in the anticipated amount of electricity produced by onshore turbines by 2017, according to a renewable energy trade association.

The Department of Energy and Climate Change (DECC) announced that it would cut support for onshore and offshore wind farms but increase aid for wave and tidal schemes through proposed changes to its Renewables Obligation system in England and Wales that would take effect in 2013 and run to 2017.

The Renewables Obligation compels UK energy firms to source an increasing proportion of the electricity they provide to customers from renewable sources. Firms that generate electricity from renewable sources are issued with a certain number of renewables obligation certificates (ROCs) depending on the amount of electricity they produce and what renewable power source was used to generate it.

Firms with a surplus of certificates can trade them with firms that have a deficit. Where energy suppliers do not have enough certificates to meet their obligation, they must pay an amount determined by the scale of the shortfall into a "buy-out" fund. This pot is redistributed back to suppliers in proportion to the number of certificates that they possess.

DECC has proposed that, from 2013, onshore wind will be eligible for 0.9 ROCs per megawatt hour of electricity, down from the current level of one ROC, while the number of ROCs per megawatt hour received by offshore wind operators will be cut from two to 1.8 by 2016/17.

However, this proposed cut in support for offshore wind is less severe than that set out in the existing arrangements, which were to have run to 2013.

Meanwhile, wave and tidal stream power will be entitled to five ROCs per megawatt hour for projects with a capacity of up 30 megawatts under the proposals, a rise on the current level of two. Projects that are larger than 30 megawatts would still get two ROCs, the consultation says.

The government's long term goal is to achieve around 108 terawatt-hours - or 108 million megawatt hours - per year of large-scale renewable electricity generation by 2020.

The consultation document says: "With the support levels proposed in this consultation, we expect large-scale renewable electricity to generate around 70 to 75 terawatt-hours per year by the end of the banding period in 2017."

A spokesman for trade body RenewableUK said the proposed changes to ROC support for onshore wind would result in fewer planning applications being submitted for small-scale wind energy projects.

"Large windfarms are cheaper to build because they can achieve economies of scale, but we'd expect plans for small-scale projects to stop coming forward as they will be too expensive and not viable," he said.

RenewableUK claims that the cut of 0.1 of a ROC for onshore wind could reduce the total capacity of onshore turbines that it anticipates to be deployed by 2017 from 12 gigawatts to 10.4 gigawatts - a 13 per cent drop.

John Constable, director at sustainable development charity the Renewable Energy Foundation, said that while the changes to the Renewables Obligation would lead to a reduction in planning applications for wind energy projects in "areas of low wind", it would not have a dramatic long-term impact on wind energy developers because they could cope with the financial impact.

"But this is a strong indication of the direction of travel and indicates that subsidies will be reduced and ultimately withdrawn," he said.

DECC announced that enhanced co-firing of biomass - where at least 15 per cent of a power station's output comes from biomass burned alongside fossil fuels - would be eligible for one ROC per megawatt hour. Electricity generated in this way is currently ineligible for ROCs.

Dorothy Thompson, chief executive of coal energy company Drax, said it was pleasing that the government is seeking to "maximise the deployment of the cheapest renewable technologies" by creating "specific support levels" for the increased use of sustainable biomass in existing coal-fired power stations.

Thompson said that the proposed level of one ROC per megawatt hour for enhanced co-firing would enable the firm to produce more energy this way, but it would need uplift from this proposed level to maximise its potential for producing low-cost renewable electricity.

"If support were to be increased from the proposed level we believe it would further increase the opportunity for burning biomass in place of coal," she said. "This will lead to lower electricity prices for consumers, who will otherwise bear the cost of the technology required to meet 2020 climate change targets."

The consultation ends on 12 January and can be viewed via Planning Resource.co.uk/go/referencesection

PROPOSED CHANGES TO THE RENEWABLES OBLIGATION

Renewable Existing support Proposals for
technology 2009-13 (ROCs/MWh) 2013-17 (ROCs/MWh)

Enhanced co-firing None 1
of biomass
Onshore wind 1 0.9
Offshore wind 2* 2 in 2013/14,
1.9 in 2015/16 and
1.8 in 2016/17
Solar photovoltaic 2 0.5
Tidal stream 2 5 up to a 30MW
project cap. 2 above the cap
Wave 2 5 up to a 30MW
project cap.
2 above the cap.

* The 2009-13 document suggested support of 2 ROCs/MWh in 2013/14 and
1.5 from 2014/15 onwards


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