Energy: Onshore Wind — House of Lords, 2015-06-22
Topic: Energy
Nicholas Bourne (Conservative, Centre-right): My Lords, with permission I shall now repeat a Statement made by my right honourable friend the Secretary of State for Energy and Climate Change about ending new subsidies for onshore wind "Mr Speaker, with your permission I would like to make a Statement on ending new subsidies for onshore wind. This Government are committed to meeting objectives on cutting carbon emissions and to continuing to make progress towards the United Kingdom’s 2020 renewable energy targets. The renewable electricity programme aims to deliver at least 30% of the UK’s electricity demand from renewables by 2020. We are on course to achieve this objective. Renewables already make up almost 20% of our electricity generation and there is a strong pipeline to deliver the rest As we decarbonise, it is imperative that we manage the costs to consumers. Although renewable energy costs have been coming down, subsidies still form part of people’s energy bills and, as the share of renewables in the mix grows, the impact gets proportionally larger. It is one of this Government’s priorities to bring about the transition to low-carbon generation as cost effectively and securely as possible. The levy control framework, covering the period up to 2020-21, is one of the tools to help achieve this. It limits the impact of support for low-carbon electricity on consumer bills We have a responsibility to manage support schemes efficiently within the levy control framework to ensure that we maintain public support for the action we are taking to bring down carbon emissions and combat climate change. Government support is designed to help technologies stand on their own two feet, not to encourage a permanent reliance on subsidy. We must continue to make tough judgments about what new projects get subsidies. Onshore wind has deployed successfully to date and is an important part of our energy mix In 2014, onshore wind made up around 5% of electricity generation, supported by around £800 million of subsidies. At the end of April 2015, there were 490 operational onshore wind farms in the United Kingdom, comprising 4,751 turbines in total. These wind farms have an installed capacity of 8.3 gigawatts—enough to power the equivalent of more than 4.5 million homes The electricity market reform delivery plan projects that we require between 11 and 13 gigawatts of electricity to be provided by onshore wind by 2020 to meet our 2020 renewable electricity generation objective while remaining within the limits of what is affordable. We now have enough onshore wind in the pipeline, including projects that have planning permission, to meet this requirement comfortably. Without action, we are very likely to deploy beyond this range. We could end up with more onshore wind projects than we can afford, which would lead to either higher bills for consumers or other renewable technologies, such as offshore wind, losing out on support We need to continue investing in less mature technologies so that they realise their promise, just as onshore wind has done. It is therefore appropriate to curtail further subsidised deployment of onshore wind, balancing the interests of onshore developers with those of bill payers. This Government were elected with a commitment to end new subsidies for onshore wind and also to change the law so that local people have the final say on onshore wind applications. We are now acting on that commitment Alongside proposals outlined within the new energy Bill to devolve decision-making for new onshore wind farms out of Whitehall, my right honourable friend the Secretary of State for Communities and Local Government has set out further considerations to be applied to proposed wind energy development in England so that local people have the final say on onshore wind farm applications I set out to Parliament on 18 June proposals to end new subsidies for onshore wind, specifically in relation to the renewables obligation, which will be closed to new onshore wind from 1 April 2016, a year earlier than planned. My department’s analysis indicates that, after taking account of an early closure, onshore wind deployment under the renewables obligation will be in the region of 11.6 gigawatts. With this capacity, and that of onshore wind projects that have received support through the new contracts for difference, we expect around 12.3 gigawatts of onshore wind to be operating in the United Kingdom by 2020, supported by the levy control framework, providing around 10% of electricity generation. This puts us above the middle of the deployment range set out in the EMR delivery plan—our best estimate of what we would need to meet the planned contribution from renewable electricity to our 2020 targets. I have proposed a grace period which would continue to give access to support under the RO to those projects which, as of 18 June 2015, already have planning consent, a grid connection offer and acceptance, and evidence of land rights for the site on which the projects will be built. We estimate that around 7.1 gigawatts of onshore wind capacity proposed across the United Kingdom will not be eligible for the grace period and are therefore unlikely to go ahead as a result of the announcement of 18 June. That equates to around 250 projects, totalling about 2,500 turbines now unlikely to be built Therefore, by closing the RO to onshore wind early, we are ensuring that we meet our renewable electricity objectives, while managing the impact on consumer bills and ensuring that other renewables technologies continue to develop and reduce their costs. Consumer bills will not rise because of this change. Indeed, those onshore wind projects unlikely now to go ahead would have cost hundreds of millions of pounds. I believe that this draws the line in the right place In advance of this announcement, I and other Ministers and officials have been discussing these proposals with the devolved Administrations in Wales, Northern Ireland and Scotland. I now want to hear the further views from devolved Administrations, and also industry and other stakeholders. This is just the beginning of the process and we will continue to consult them as we move towards implementation The changes to the renewables obligation do not affect remote island wind proposals, which would not have been in a position to receive RO subsidy even under previous timelines. I will say more about how future CfD projects will be treated in due course. But I am particularly conscious of the fact that 68% of the onshore wind pipeline relates to projects in Scotland. I will continue to consult colleagues in the Scottish Government. Indeed, I am meeting the Scottish Energy Minister, Fergus Ewing, on Wednesday. By implementing these changes through primary legislation, they will be subject to full parliamentary scrutiny, including from Members representing Scottish constituencies With regard to contracts for difference, we have the tools available to implement our manifesto commitments on onshore wind and will set out how we will do so when announcing plans in relation to further CfD allocations. I will also shortly be considering options for future support for community onshore wind projects that might represent one or two turbines through the feed-in tariffs—FITs—as part of the review that my department is conducting this year. I do not wish to stand in the way of local communities coming together to generate low-carbon electricity in a manner that is acceptable to them, including through small-scale wind capacity. However, that action must be affordable as well as acceptable Clean energy does not begin and end with onshore wind. Onshore wind is an important part of our current and future low-carbon energy mix, but we are reaching the limits of what is affordable and what the public are prepared to accept. We are committed to meeting our decarbonisation objectives. The changes that I have outlined to Parliament will not change this. I look forward to having meaningful discussions with industry, with other stakeholders and with colleagues in the House and in Scotland, Wales and Northern Ireland on how we move forward".