The Welsh Government, RenewableUK and several green groups have jointly called for onshore wind and solar projects to be allowed to compete in future UK clean energy auction rounds, arguing that the UK’s current subsidy regime is “threatening” the renewables sector in Wales.
A statement issued today calls on the UK government to “look again” at the way in which Contracts for Difference (CfD) auction schemes currently operate in order to better support development of renewable electricity facilities, and to help Wales meet its decarbonisation targets.
The development of large scale new onshore wind farms has effectively been banned in the UK since 2015, while onshore wind and solar projects are excluded from competing for state subsidies through the CfD process, with government focus instead shifting to ‘less established’ clean energy technologies such as offshore wind.
In the last few days the government has confirmed it wants to explore potentially allowing onshore wind farms to be built in parts of Scotland and Wales, but at present rules governing the CfD process mean contracts cannot be awarded on a geographically specific basis.
Meanwhile no auctions for more mature technologies – including onshore wind and solar – have been announced by government. The technologies are likely to be excluded from bidding for funding from the remaining £557m CfD budget, which is likely to cover a period running until 2025.
However, the statement issued today argues the lack of support for onshore wind and solar has had a significant impact on renewables development in Wales. No new planning applications have been lodged for onshore wind and solar farms in Wales since that time, it states, while many applications lodged before 2015 are now “not progressing” through the system.
“Projects being developed by communities and local authorities to deliver local benefit, including solar rooftop schemes in fuel poor areas as well as wind and solar to power public buildings and local businesses, can no longer attract investment,” the statement reads. “This is threatening both the once-growing sector developing and delivering these projects and the ability of bodies in Wales to build resilience for the future. It also threatens Wales’ ability to meet its climate goals, which contribute to the UK’s 2050 targets. This is at a time when the future looks more uncertain than ever as a result of the decision to leave the EU, and the need for resilient low carbon business models becomes even more urgent.”
Other organisations backing the statement include the Welsh National Trust, agricultural trade body the Country Land & Business Association (CLA) Cymru, developer Sirius Renewable Energy, the Centre for Alternative Technology, Welsh wind cooperative Awel Coop and Community Energy Wales.
“We believe that excluding the most affordable technologies from market mechanisms makes little sense from the supply side, with respect to the cost to bill payers, or from the economic perspective,” the statement continues. “Support for earlier stage technologies is important for economic prosperity and for decarbonisation. We need a concerted approach that provides incentives to new technologies as well as supporting those which are most economical in order to keep costs at affordable levels.”
Electricity generation from renewable sources in Wales has tripled since 2010 and last year supplied 32 per cent of the region’s electricity.
The call came as UK climate change and industry minister Claire Perry defended the government’s current stance on onshore wind, reiterating her comments yesterday that her department is working on a solution to allow such facilities to be built once again in Wales and Scotland. She also appeared to voice frustration that the debate over onshore wind was acting as a barrier to development of other renewables technologies.
Speaking at an event hosted in London by think tank Green Alliance this morning, Perry said that onshore wind was “absolutely part of the mix” for the UK’s future energy sources, but that the current Contracts for Difference (CfD) structure did not allow for support to be restricted only to projects in specific geographies, such as in Scotland and Wales.
“And as many people will be frustrated by in this room, whenever we’ve tried to have a sensible debate about renewable technology, it is crashed on the shoals of onshore wind turbines and mass protests,” she added. “And indeed on the issue of energy bills.”
Green groups were critical of the revelation in last week’s Budget that there would be no additional support for renewable development beyond the existing £557m CfD funding pot – with that pot likely to have to last until around 2025 – but Perry batted away concerns this would impact on investment for clean energy in the UK.
“I was just a little bit surprised at the reaction to that because we are moving to an era very rapidly of subsidy-free renewable technology,” she said. “I opened the Clayhill subsidy-free solar farm just a few months ago; everybody knows the astonishingly low price we are now paying for offshore wind; and it seemed to me that setting out almost £600m of taxpayers money as the ongoing subsidy over the next few years, it did give industry some certainty, and we should be subsidising technologies as the costs are dropping so dramatically. But I do agree that what we need to do is invest more in technologies that are further from the market.”
Now that the government is clearer on wanting onshore wind development in principle, expect the pressure for a route to market in practice to intensify.