Government working on creating a lifeline for the UK wind industry
The climate change minister has recently announced that the UK Government is actively working on developing a strategy to revive the onshore wind industry. Members of the Department for Business, Energy and Industrial Strategy (BEIS) are actively working on a plan to allow the development of larger onshore wind farms in Wales and Scotland.
Clare Perry, the Climate Change Minister has emphasized that onshore wind is an absolute necessity for the future of the UK energy industry.
Perry explained that we (UK) have a manifesto commitment which includes no large-scale development of onshore wind farms in the UK. However, there is planning consent and the opportunity to develop elsewhere. Under the existing ‘State Aid’ rules, the government cannot discriminate against projects based on location during the competitive auction process.
Perry emphasized that her team is working on how they can bring forward onshore wind, particularly for areas in the UK that do want to develop onshore wind sites. Perry along with the BEIS minister recently informed the Conservative Party conference in October that onshore wind can play a pivotal role in the development of clean energy in Britain. There is, however, concerns that any re-introduction of onshore wind will face resistance from some Conservative MP’s who have actively voiced their opposition to this industry.
Despite the possible objections, Perry has indicated that onshore wind farms can be given the green light in Wales and Scotland under the Contracts for Difference framework. The case for developing the facilities gained further traction by the recent auction in Germany, which saw associated development costs fall by a further 10%.
The recent acknowledgment of onshore wind industry comes at a time when the Government faced scrutiny over its decarbonization agenda and it’s stance towards International climate diplomacy. The recent budget decision to halt the UK’s carbon prices has been suggested by some analysts as a potential catalyst for the revival of the coal industry. Perry, however, insisted that the UK would continue to phase coal out of the energy market, regardless of the carbon prices. A formal consultation by the Government is now required to solidify this promise of phasing coal out by 2025.
The BEIS received further scrutiny over the future development of other renewable energy projects. For example, the Swansea Tidal Lagoon project failed to receive clear support from the recent budget. The director of BEIS stated that the extra funding announced by the Government has not yet been determined or allocated to any specific clean energy sector. He explains that the funding will be utilized for ‘less established technologies’ such as offshore wind, biomass, wave and tidal project. However, unless the funding is specifically allocated, it will likely be put towards biomass and offshore wind projects, due to being more established and cost-effective markets.
The budget also announced that no further funding would be available beyond the £557M figure until 2025. Perry has been pressed on how the UK can continue to develop clean energy projects without the support of further funding. As a result, many renewable energy developers are uncertain about the Government’s stance on the clean energy agenda. It does seem though the Government is now considering the reestablishment of the onshore wind market.