Offshore wind farms in England and Wales are set to receive more subsidies than previously planned in the next few years under proposals from the UK Government today.
Under the plans, which exclude Scotland, smaller-scale wave and tidal stream projects, which harness the flow of the tide, would also receive many times more support than other types of renewable energy in a bid to encourage those technologies.
While the amount of support to offshore wind will decline over the next five years, it will be cut less than had been planned, under the proposals put out for consultation today.
Other technologies, including anaerobic digestion, geothermal, hydroelectric, energy from waste, onshore wind and microgeneration will see the level of support decline.
Green electricity receives support though the renewables obligation (RO), under which suppliers have to show they have sourced a certain proportion of power from renewables.
Different credit is awarded to different types of power, and today’s consultation contains proposals for the levels of credit set for each technology up to 2016/17.
An announcement on the subsidies Scottish projects will receive is expected to be announced by the end of the week.
The Government said the new plans would cost between £400million and £1.3billion less than retaining the current levels of support for renewables, so that by 2016 they account for £50 on the average electricity bill, compared with £52 per household under the existing scheme.
Energy and Climate Change Secretary Chris Huhne said: “We have studied how much subsidy different technologies need.
“Where new technologies desperately need help to reach the market, such as wave and tidal, we’re increasing support. But where market costs have come down or will come down, we’re reducing the subsidy.”
However, wind, wave and tidal industry body RenewableUK responded cautiously to the announcement.
Director of policy Gordon Edge said the large boost in subsidy was a “major win”.
It will see the ROCs for wave and tidal stream power projects up to 30MW increase from two to five. Projects more than 30MW would remain at two ROCs.
But cutting support for onshore wind farms would hit the number of projects getting built, particularly smaller, community schemes, RenewableUK said.
estimating there could be potential losses to local areas of £1.5billion over the lifetime of schemes.
Under the proposals, photovoltaic projects would retain the current levels of support until 2014 but would then be gradually reduced until 2017.
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