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Government Subsidy Ban Could Mean £1 Billion Cost to Energy Customers

27 Oct 15:00 by Steve Walia

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Government ministers are being asked to explain why a planned subsidy ban for all new onshore wind developments could potentially add an extra £1 billion on to consumer energy bills over the next five years. Wind energy is already one of the cheapest forms of energy, and its costs are still falling as greater efficiencies are achieved by refining technology.

Research carried out by the Energy & Climate Intelligence Unit found that it would be £100 million less expensive every year to produce additional energy from new onshore wind farms than it would to build new biomass or nuclear energy plants. It would also be £30 million or less expensive than the latest wind power contracts for offshore.

Measured over five years, the potential savings could be £1 billion if an extra GW of fresh capacity was added in year one and an additional 500 MW in the subsequent four years. The ECIU is calling on the Conservative government to rethink its stance to allow onshore wind to compete for lucrative energy contracts in the next round of auctions in 2019.

Figures from Baringa Partners showed that Britain's onshore wind farms could produce clean energy for just £50 per mWh. This compares to the recent winning bid by Dong Energy of £57.50 for its offshore wind farms. EDF also won a contract for its Hinkley Point Power Plant at £92.50.

The ECIU has also said that the costs of producing onshore wind may have fallen yet further below £50 per MW since the figures by Baringa were generated in April, judging by the latest prices being achieved in Europe.

A spokesperson for the Department of Business, Energy & Industrial Strategy said that the government didn't believe England needed more commercial-scale wind power.