UK- Government support for wind energy under the spotlight

UK government support for wind power under the spotlight. Wind energy has made headlines in the UK this week with the Guardian reporting that the views of some Members of Parliament could scupper billions of pounds of investment and the creation of hundreds of new jobs in wind turbines.

The paper reports that “billions of pounds’ worth of investment in Britain’s energy infrastructure is on hold or uncertain because of concerns over the government’s commitment to wind farm plants.” Leading energy companies surveyed by the Guardian with plans to set up wind turbines factories, research facilities and other developments have said they need reassurance on the UK government’s commitment to wind energy before they go ahead.

Vestas are reportedly planning on building a wind turbine factory in Kent, south-east England, that would create 2,000 jobs, and Siemens reportedly has plans to set-up a £210 million (€248 mn) factory in Hull that would employ 700.

The Guardian article comes shortly after 101 British MPs sent a letter to UK Prime Minister David Cameron, demanding a reduction in support for wind power which is, according to the letter’s signatories, “inefficient”. “In these financially straitened times, we think it is unwise to make consumers pay, through taxpayer subsidy, for inefficient and intermittent energy production that typifies onshore wind turbines,” the authors of the letter said.

There’s no doubting wind power’s ability to generate jobs which surely are a way out of the difficult economic climate the letter mentions. Unite, the UK’s largest trade union, has signed a memorandum of understanding with RenewableUK, the renewable energy trade association, saying they hope to create “tens of thousands of skilled jobs over the next 10 years.”

But according to the Guardian’s report, this kind of political uncertainty is jeopardising much needed investment and thousands of jobs in economically difficult times, let alone the UK’s climate change and renewable energy targets.

It also says consumers are paying to subsidise wind energy. The UK government does subsidise renewable energy – the Department of Energy and Climate Change says that this adds £20 (€24) to the average domestic fuel bill every year. RenewableUK says that wind power accounts for about 47% of this cost, so wind power adds £10 (€12) a year to the fuel bill, the Guardian reports.

Yet, fossil fuels in the UK still get tax breaks that amount to far more than subsidies for wind energy: “Gas, oil and coal prices were subsidised by £3.63 billion (€4.3 billion) in 2010, according to data from the Organisation for Economic Co-operation and Development, whereas offshore and onshore wind received £0.7 billion (€0.8 billion) in the year from April 2010,” the paper says.

Moreover, the UK government recently revealed that the £455 (€537) rise in fuel bills on average experienced by households between 2004 and 2011 was due to the rise in gas prices. Average bills have risen from £604 (€713) in 2004 to £1060 (€1250) in 2010 and 64% of that increase was down to rises in the wholesale gas price, which compares to just 6.5% for renewable energy subsidies, the government said.

Lord Turner, chairman of the government’s Committee on Climate Change, rightly described the debate on wind power in the UK as “confused”. “It is regrettable that people leap – without reading the facts – to things that they want to believe. Wind works. The idea that it is so intermittent that it is not beneficial, that is rubbish. There are countries getting large amounts of energy from wind farm,” Turner said.

These recent articles in The Guardian provide some welcome clarity by highlighting the fact that wind energy subsidies are nowhere near as big as subsidies dished out to fossil fuels, and only a tiny fraction of recent fuel bill rises can be attributed to wind energy – gas is the real culprit. This is worth remembering next time you read media reports which exaggerate the costs of wind power subsidies.

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