It was the turn of onshore wind to feel the heat from the latest energy policy twist this week. The Department of Energy and Climate Change (DECC) revealed the final strike prices for renewable energy generation, and there were some notable changes from the draft numbers announced in June. The strike price for onshore wind will drop from the draft £100 per megawatt hour (MWh) to £95 from 2015, and will then drop again to £90 from 2017. Large-scale solar also lost out with £5 per MWh shaved off the draft figure.
"Obviously, any reduction in support for onshore wind is unwelcome," said trade body RenewableUK, which cautioned that smaller projects are likely to fall by the wayside and said that the government must work with onshore wind developers to reduce costs.
The way in which the subsidies will be paid for is also changing following the government's recent move to scrap green taxes from energy bills and instead fund them from general taxation. But the government denied that changes to the subsidies were indicative of a wider retreat from its commitment to green energy and said that the subsidies were high enough to support continued investment in renewables. "Investors are queuing up to express their interest in these contracts. This shows that we are providing the certainty they need," said Energy and Climate Change secretary Ed Davey.
Offshore wind, which has seen big projects such as RWE's Atlantic Array windfarm axed recently, fared better. The strike price for offshore wind from 2017 will now be £135 per MWh, up £5 from the draft figure. Biomass generation also received a supportive final decision, which helped send shares in Drax (DRX), the coal-fired power station that is converting to biomass, up 9 per cent.
