Industry welcomes UK Government decision on wind, wave and tidal energy to unlock growth

Paul Boughton

RenewableUK, the trade and professional body for the wind and marine energy industries, has welcomed the Government’s announcement on levels of financial support for onshore and offshore wind, and wave and tidal energy, following the long-awaited conclusion of the Renewables Obligation Banding Review.

The additional certainty this announcement provides could help the Onshore Wind sector grow to employ over 12,000 people by 2020 and add over a billion pounds to the UK’s economy every year.

The decision sees the level of support for onshore wind cut in April 2013 from one Renewables Obligation Certificate per megawatt hour to 0.9 of a ROC per megawatt hour.

The cuts have been made based on evidence of cost reductions within the onshore wind industry so that it offers energy consumers even better value for money.

They will however have an impact, reducing the growth of the sector by an estimated £2 billion of investment out of a potential £20 billion, with 1,300 fewer jobs created.       

The onshore wind sector notes that the level of financial support from April 2014 onwards will be subject to a review of costs to commence this September, concluding early next year. RenewableUK will continue to provide evidence so that agreement is reached as swiftly as possible. However, any element of uncertainty created by such a review must be reduced to a minimum if the onshore sector is to grow as fast as the Government wishes.

RenewableUK’s Chief Executive Maria McCaffery said: “We welcome the Government’s decision to set its financial support for onshore wind energy at a level that will enable the industry to continue to grow. Although it has been a long time in coming, the final decision was based on hard economic evidence, and was not derailed by short term political considerations. We recognise that these are difficult economic times and we have been trying to drive costs down.

“RenewableUK will play a full and active role in the Government’s review of onshore wind costs. However, the review must not be allowed to create a mood of uncertainty among investors. We trust that Government will continue to send a clear signal of its commitment to building the low carbon economy this country deserves.

"We have been given clarity on funding for April 2013 to April 2014, but this is a relatively short timeframe. Investors need long term certainty, and ideally we would have welcomed a little more of that in today’s announcement. However but we shall continue to work closely with Government in the period of evidence-gathering this autumn, and we will also continue to develop initiatives for closer community engagement”.

The industry has welcomed the fact that the cut in financial support for Offshore Wind does not come into effect until April 2015, when it will be reduced from 2 ROCs to 1.9 ROCs. A further cut to 1.8 ROCs will take place in April 2016

Maria McCaffery said: “The carefully-phased reduction in financial support for offshore wind over a long timeframe shows that the Government is committed to the development of the UK’s world-leading offshore sector as a key part of our energy mix.

"In June, the industry-led offshore wind Cost Reduction Task Force published a ground-breaking report showing how we will take practical steps to reduce the cost of offshore wind energy by one-third by 2020. By then, we will have at least ten times as much offshore capacity installed as we have now, employing tens of thousands of highly skilled workers in Britain’s burgeoning low-carbon energy sector.

“These decisions for onshore and offshore wind are vital, as they   provide the much-needed confidence and certainty needed to attract billions of pounds of inward investment into the UK economy, creating tens of thousands of jobs and providing energy security which will protect consumers from rising fossil fuel prices.

“We now look forward to the Energy Bill, and the details of the Government’s reforms to the electricity market which have the potential to harvest a great prize indeed: a world-beating wind turbine manufacturing industry that will export British products across the globe.”

RenewableUK has also acknowledged that the increase in support for Wave & Tidal energy – up from 2 ROCs to 5 ROCs - will stimulate the marine sector.

Maria McCaffery said: “The Government’s recognition of the importance of the marine energy industry to our future energy supplies is most welcome. This will help Britain to turn its head start in this nascent technology into a lead in building a new industry. The wave and tidal sector will be worth £3.7 billion to the UK by 2020, creating 10,000 jobs, with the opportunity to export technology worldwide."

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