The U.K. government said it expects
40 billion pounds ($65 billion) of investment in renewables by
2020 after shifting incentives toward offshore wind power and
away from projects on land in areas where residents object.
The Treasury published a list of final “strike prices”
for electricity from renewables in its national infrastructure
plan today, cutting support for solar parks and onshore wind
farms and raising them for turbines at sea. The sums represent
the guaranteed amount that generators earn under long-term
contracts designed to stimulate investment in low-carbon energy.
“This package will deliver record levels of investment in
green energy by 2020,” Energy Secretary Ed Davey said in an e-mailed statement. “Our reforms are succeeding in attracting
investors from around the world so Britain can replace our aging
power station and keep the lights on.”
Prime Minister David Cameron has faced opposition from
rural communities to expanding wind farms and solar parks, which
some residents say are a blight on the countryside. The
government must balance those concerns with the need to attract
110 billion pounds ($180 billion) to replace aging power
stations and meet renewable energy and carbon targets.
The government is trying to spur offshore wind in an effort
to boost U.K. jobs and manufacturing. Those have been set back
in the past month after RWE AG (RWE) scrapped a 4.5 billion-pound
offshore project, and Centrica Plc (CNA) said it’s still deciding
whether to push ahead with another.
The energy department said today that deployment of 10
gigawatts of offshore wind power by 2020 is “achievable,”
while emphasizing that figure doesn’t represent a target.
Projects Benefiting
Sixteen renewable power projects are in the pipeline to
receive contracts guaranteeing energy prices, Davey’s department
said. Almost 11 gigawatts of onshore and offshore wind have
planning consent and are awaiting construction, compared with
total installed renewable capacity of over 20 gigawatts at
present, the department said.
Two of Drax Group Plc (DRX)’s units were included in the list
of projects that have progressed in their bids for contracts.
Shares of the company, which runs the U.K.’s largest coal-fired
power plant and has already converted one of six units to run on
biomass, rose to their highest since October 2008. The
government confirmed incentives for those biomass plants would
be unchanged from an earlier draft proposal.
Biomass Boilers
Eggborough Power Ltd. has also progressed to the next stage
in its bid for contracts guaranteeing power prices for coal
units converted to run on biomass, the Energy Department said.
Denmark’s Dong Energy A/S advanced with bids for three offshore
wind farms.
The guaranteed price for onshore wind was cut to 95 pounds
per megawatt-hour from 2015 and 90 pounds from 2017. That’s
lower than draft levels proposed in June for 100 pounds and 95
pounds in those years. Support for large-scale solar farms was
cut by 5 pounds in 2015, 2016 and 2017 and by 10 pounds in 2018.
“The price we’re willing to pay for onshore wind and
large-scale solar plants is coming down,” said Chief Secretary
to the Treasury Danny Alexander. Even so, “the need for
investment in our energy sector is enormous.”
The level offshore wind will get from 2018 was raised by 5
pounds to 140 pounds.
“Today’s cuts to onshore wind and solar support schemes
show how quickly the cost of clean energy technologies are
falling,” Greenpeace Policy Director Doug Parr said in an e-mailed statement. “It’s right ministers should now put emphasis
onto helping drive down the cost of offshore wind so that the
U.K. can reap the rewards of new turbine factories and thousands
of new jobs.”
Offshore Wind
The U.K., with almost 3,000 megawatts of wind turbines
installed at sea at the end of 2012, has more offshore wind
power than the rest of the world put together, though at present
none of the turbines are made domestically.
Government spending on environmental measures has become a
political focal point after five of the nation’s “Big Six”
energy providers raised bills to consumers.
Ed Miliband, leader of the opposition Labour Party, pledged
to freeze prices if he wins the election due in 2015. The
government responded by reviewing surcharges to energy bills
that pay for green and social programs, resulting in changes to
energy efficiency programs announced two days ago.
Aesthetics
The revisions also show a continued push-back against
large-scale renewable projects on land.
Energy Minister Greg Barker said in July that the
government planned guidelines for large-scale photovoltaic
plants designed to “preserve heritage assets and beautiful
countryside.” Former energy minister John Hayes last year made
similar comments about onshore wind, saying more weight should
be given to aesthetics when making planning decisions.
The government also in June announced higher payments to
communities that host onshore wind farms, and introduced
guidance for planning authorities to ensure local residents are
consulted earlier about applications for the installations.
In a separate announcement, the Department of Energy and
Climate Change proposed raising incentives to companies and
communities that install renewable heat facilities, including
biomass boilers over 1-megawatt, deep geothermal, combined heat
and power plants, ground-source heat pumps, solar thermal
installations and biogas burners.
“It is vital that we get the level of support right so
that the market can invest with confidence, cost reductions can
be achieved and the market can grow sustainably,” Barker said
today in a written statement to Parliament.
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