LONDON (Alliance News) - UK Secretary of State for Climate Change Amber Rudd Thursday said the government, a year ahead of schedule, has scrapped the Renewables Obligation which is the primary of three subsidies for onshore wind farms, claiming the country has enough onshore wind in the pipeline.
"The government was elected with a commitment to end new subsidies for onshore wind and to change the law so that local people have the final say on onshore windfarm applications," said Rudd in a statement.
"We are now giving effect to these changes in full through the introduction of an Energy Bill this session. The Energy Bill will devolve powers out of Whitehall so that applications for onshore wind farms are considered by democratically elected councils," she added.
Secretary of State for Communities and Local Government, Greg Clarke Thursday laid out the government's new considerations for proposed wind energy development so that "local people have the final say on wind farm applications".
"While onshore wind now makes a meaningful contribution to our energy mix, they are often imposed upon communities without consultation or public support," said Clarke. "Any application to build wind turbines will then need to have the clear backing of the community, with any planning concerns clearly addressed."
From Thursday, any wind turbines will only "get the go-ahead" if they have been backed by local people under a local or neighbourhood plan. Councils will only grant permission for a new wind farm if it is backed by the local or neighbourhood plan and only after a consultation has been carried out in order to address any planning impacts that could be potentially caused by a wind farm in the local area.
"This second test (the consultation) will ensure the planning concerns of local communities are addressed ? even if they give their backing for wind farms in their area through the local or neighbourhood plan," said Clarke Thursday.
Onshore wind is currently subsidised through three schemes: Contracts for Difference, which was introduced by the last coalition government, and the Renewables Obligation and Feed-in-Tariffs, which were both prior to 2010.
Rudd said she will particularly end subsidies for onshore wind via the Renewables Obligation, which is "the main support mechanism for renewable electricity projects in the UK", according to UK energy regulator Ofgem.
The Renewables Obligation was introduced in 2002, and places an obligation on UK electricity suppliers to source an increasing proportion of the electricity they supply from renewable sources.
The Feed-In-Tariffs were designed to promote the uptake of smaller-scale renewable and low-carbon electricity generation technologies and requires electricity suppliers to make tariff payments on both generation and export of renewable and low-carbon electricity.
The Contracts-For-Difference, introduced in 2013, is a private law contract that allows an electricity generator, such as a wind farm, to be paid the difference between the strike price ? a price for electricity reflecting the cost of investing in a particular low-carbon technology ? and the reference price ? a measure of the average market price for electricity in the market.
On Thursday, Rudd said the Renewables Obligation supports the majority of current and future onshore wind farm. She said it is demand led, and therefore "poses more risk of pressure on consumer bills from increased demand for the subsidy," she said.
"I am therefore announcing today that we will be introducing primary legislation to close the Renewables Obligation to new onshore wind from April 1, 2016 ? a year earlier than planned," said Rudd.
"To protect investor confidence in the wider renewables sector, I am proposing a grace period which would continue to give access to support under the Renewables Obligation to those projects which, as of today, already have planning consent, a grid connection offer and acceptance, and evidence of land rights for the site on which their project will be built," the secretary added.
Clarke also said that wind farms which have already lodged planning applications prior to the changes made Thursday will still need to hold a consultation, meaning it will not need a local or neighbourhood plan. Clarke said this still addresses planning concerns, meaning the farm has "local backing", he said.
Renewable energy companies are now racing to get projects that are currently under development approved before the subsidy is scrapped in 2016.
Infinis Energy PLC was the first company to release a response to the government's decision, clarifying that its two onshore wind farms that are under construction, Galawhistle and A'Chruach, will remain eligible under the Renewable Obligation regime.
Further, Infinis said it "remains confident" that it will be able to further build out its 130 to 150 megawatts of growth during the grace period. The company said a further 5.2 gigwatts of onshore wind capacity is likely to be eligible in the grace period to April 2016, which it believes it can participate in. However it said it is awaiting "further clarity" on the issue.
"Given the good progress of our A'Chruach and Galawhistle construction projects and the maturity of some of our other consented projects, we remain confident that we will deliver on our 130-150MW growth target by 2017," said Infinis Chief Executive Eric Machiels.
Infinis shares closed down 0.6% to 190.60 pence per share Thursday.
Rudd justified scrapping the Renewables Obligation, because onshore wind development using the Obligation has a capacity of around 11.6 gigwatts in the UK. Rudd said, when combined with the 0.75 gigawatts of onshore wind under the Contracts-For-Difference scheme, the country has sufficient wind power to meet its 2020 targets.
"It is therefore appropriate to curtail further deployment of onshore wind, balancing the interests of onshore wind developers with those of the wider public," said Rudd.
Earlier in June, The Telegraph said the Scottish National Party would block attempts by UK Prime Minister David Cameron and Rudd to scrap onshore wind farm subsidies, raising the prospect of the SNP government retaining the onshore wind farm subsidies in Scotland and undermining the prime minister?s election promise to scrap them.
That was followed by another article by The Telegraph which claimed the government's plan to scrap wind farm subsidies were being delayed amid fears they will trigger a costly legal battle with green energy companies and a damaging dispute with the Scottish government.
"I intend that any final proposals are applied across Great Britain, and I am in the process of consulting with Scottish and Welsh Ministers on this matter," said Rudd Thursday.
Later Thursday, industry trade body Scottish Renewables, which represents over 300 organisations in the clean energy sector, said Scotland could lose GBP3.0 billion worth of investment due to the decision, with its Chief Executive Niall Stuart calling it "neither fair nor reasonable".
"?We believe this decision could put around two gigawatts of onshore wind projects in Scotland at risk. These are projects that could provide the equivalent electricity demand of 1.23 million Scottish homes and significantly improve our energy security, while bringing around GBP3.0 billion pounds of investment," said Stuart.
Stuart also claimed that the 5,400 jobs in Scotland that depend on onshore wind farm projects were at risk and cause "damage to investor confidence" not only to the wind industry but the wider UK energy market.
"Onshore wind is the cheapest form of renewable electricity we can deploy at scale, so removing financial support completely undermines the goal of cutting carbon emissions as cost-effectively as possible, and actually risks increasing consumer bills," he added.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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