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UK Government Pushes On With Ending Onshore Wind Subsidies, Includes Grace Period

The UK government has announced it intends to push on with ending public subsidies for onshore wind farms, but has included a grace period to soften the blow.

In an announcement made Thursday, the country’s Energy Minister, Lord Bourne, revealed that the UK government would be closing the Renewables Obligation across the UK from 1 April, 2016, as had been expected for some time now. However, amendments were made to the Energy Bill, setting out grace period criteria which intend to “provide further certainty for investors.”

Specifically, the government predicts around 2.9 GW of onshore wind capacity will be eligible for the grace period criteria.

The government also believes that, even with the closure of the Renewables Obligation scheme, 12.3 GW of new onshore wind capacity can still be installed by 2020.

The government outlined the following criteria for inclusion in the grace period: that a project would “need to demonstrate either that they had planning consent as at 18 June; that they have successfully appealed a planning refusal made on or before 18 June; or that they have successfully appealed after not receiving a planning decision due by 18 June.” Furthermore, projects will also need to show they had a grid connection and land rights already in place.

This will allow projects affected by the uncertainty of the Renewables Obligation scheme, which have struggled to conclude funding, will be allowed extra time beyond April 1, but no longer than 9 months.

“We have a long-term plan to keep the lights on and our homes warm, power the economy with cleaner energy, and keep bills as low as possible for hard-working families and businesses,” said Energy Minister Lord Bourne. “To do this we will help technologies stand on their own two feet, not encourage a reliance on public subsidies. By bringing forward these amendments we are protecting bill payers whilst meeting our renewable energy commitments.”

The news has also been both welcomed and condemned by trade organizations.

“While we need to assess the precise impact of the announcement, it is clear that government has sought to address some unintended consequences of the decision to close the RO, for example, giving more time to projects unable to access finance because of the uncertainty created by the closure,” said Michael Rieley, Senior Policy Manager for Scottish Renewables. “However, many of our members will be bitterly disappointed that ministers are not going to allow projects which have submitted planning applications to be given a grace period.”

“This announcement means that wind farm companies can now go ahead and fully invest in local wind farm projects,”
said RenewableUK’s Deputy Chief Executive, Maf Smith. “It’s good to see that Government has acknowledged the financial uncertainty caused by these changes and the additional time offered will help rebuild investor certainty.”

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