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REF Blog

REUK Legal Threat to Protect Subsidies is Poor PR

The Guardian last week reported that the industry lobbyist RenewablesUK (REUK) is threatening to use the courts to prevent any substantial cut in subsidies to wind power.

Setting aside technical doubts as to whether this could succeed, it is remarkable that the industry should even consider such a defensive action, and still more striking that they are willing to use that possibility as a weapon in public debate.

Consider the facts of the matter. Subsidies to renewable electricity generators are drawn from consumers bills (not from taxpayers), so the impact is regressive, in other words it bears disproportionately on low income households, some of whom won't be paying tax at all.

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Excess Subsidy for High Wind Sites

Summary: In order to meet ambitious and arbitrary renewable energy targets government has to over-subsidise high wind sites by a factor of four in order ensure that low wind sites are profitable. This isn't sustainable.

Roger Harrabin's story for the BBC news website yesterday quoted an energy consultant, Nigel Cornwall, as saying that "developers received the same subsidy for a very windy site as for a less windy site." What Mr Cornwall meant is that they receive the same subsidy per unit generated (roughly a 100% top-up over and above the wholesale market price, about £50/MWh).

Mr Cornwall is then quoted as saying: "That means the single band of support is very generous for some developers but not enough for others."

That is a very interesting remark, and touches on an important truth. However, there's a bit more to be said on this subject.

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REF's evidence on Economics of Wind Power

On the 12th of June the House of Commons Energy & Climate Change Committee launched an inquiry into the economics of wind power.

We worked with Colin Gibson, one of our advisors, and a leading expert on system costs, to draft our evidence, which we are publishing today (REF Comments on the Economics of Wind Power

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