£4 Billion in Renewable Energy Subsidies ‘Not Enough’, Green Lobby Insists

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Energy Secretary Ed Davey handed out more than £4 billion in lucrative subsidies to renewable energy companies yesterday, but industry lobbyists and green campaigners have insisted that the sum still isn’t enough. Meanwhile, Conservative Parliamentarians have reacted furiously to news that the go-ahead for 15 windfarms was included in the deal, calling on Prime Minister David Cameron to cancel the contracts.

Mr Davey yesterday announced agreements to buy energy from 27 new renewable projects until 2040 under the “Contracts for Difference Scheme”, which will award the firms a fixed price for their energy for the next 15 years. The projects given the green light included 15 onshore and two offshore wind farms, five solar arrays and five waste conversion plants, the Daily Mail has reported.

The contracts were awarded through a complex auction process, following criticism last year by the National Audit Office that a lack of competition in the system was allowing companies to push prices up at a cost to consumers. The government has therefore estimated that Scottish Power and another offshore wind farm developer would be getting 18 percent less in subsidies this year than they received last year for two other projects.

Nonetheless, the subsidies awarded will still cost bill payers £315 million a year – or an estimated £4 billion over the next 15 years once price fluctuations are taken into account, with the cost being added onto the wholesale cost of energy.

The government’s Independent Committee on Climate Change has found that green subsidies and taxes already add £45 to the average duel fuel bill, but predict this to rise to £100 by 2020, and £175 by 2030.

Yet green campaigners still aren’t satisfied. Simon Bullock of Friends of the Earth said: “Ministers should be investing far more on the UK’s huge renewable energy potential.”

And solar energy firms complained that they had been unfairly sidelined in favour of wind, even though solar energy is cheaper. Paul Barwell, chief executive of the Solar Trade Association, said: “The soon to be cheapest and most popular renewable – solar power – has lost out in a complex auction scheme that favours big players and genuinely established technologies. Is a policy that trips up the UK’s emerging solar industry really a successful policy? We don’t think so.”

Alex Fornal, head of project development at Juwi, a solar company  which made three unsuccessful bids, said wind projects had consumed most of what he described as a “minuscule” budget. “If properly supported solar will become the first renewable to compete with conventional generation by the end of the decade,” he added.

But John Constable, director of the Renewable Energy Foundation, lambasted the lobbyists, saying: “This industry is behaving like a spoiled brat – you can never give it enough subsidies, it will always want more. They have to grow up and come into the real world and compete.”

Meanwhile, Conservative members of Parliament are livid with the Liberal Democrat Energy Minister for awarding 15 on-shore wind farm projects subsidies under the scheme so close to the next election, as the Conservative party has pledged to stop all subsidies to on shore wind projects.

The contracts awarded yesterday are due to be constructed between 2016 and 2019, posing a serious headache for the Conservative party should they win the next general election in May.

Chris Heaton-Harris, a member of the Public Accounts Committee who has spoken up about the “blight” of wind farms a number of times in the past told the Times: “This is a rush to milk subsidy while subsidy still exists. A new Conservative government would not subsidise onshore wind in the future. This subsidises an expensive energy source which people then pay over the odds for.

“It is not green — you need gas- powered turbines — and it solves none of our renewable or green issues. It’s just a big white elephant.”

He added: “The Spanish government cut all subsidy to wind projects in that country and it would not surprise me if we had to go down that route in a couple of months time.”

A senior colleague of his said “Conservative party policy is to have no onshore wind at all. The department can do what they want — if there’s no subsidy they aren’t going to be built.” He added that new planning guidelines would put an end to the plans on a number of grounds.

Mr Davey has defended the cost of the projects saying: “This world-leading auction has delivered contracts for renewables projects right across the UK. These projects could power 1.4 million homes, create thousands of green jobs and give a massive boost to home-grown energy while reducing our reliance on volatile foreign markets. The auction has driven down prices and secured the best possible deal for this new clean, green energy.”

And hitting back at his Conservative detractors, Mr Davey insisted: “Onshore wind and solar prices are clearly leading the way for the cheapest green energy out there, and the Conservatives now have some serious questions to answer.

“If they want to tackle climate change and do it through bringing on more green energy, then why press the stop button on onshore wind? An end to onshore wind means that you are either saying no to tackling climate change, or you are having to plug the gap with a more expensive form of energy that will put everyone’s energy bills up.”


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