Written Statement -  Onshore Wind Statement

We are issuing this statement in response to recent announcements by UK Government regarding onshore wind and in particular to feedback we have received from the wind and wider renewables sector.

Future development and deployment of onshore wind in Wales is being seriously compromised by decisions taken in Westminster.  These will have far reaching implications for jobs, investment and community benefit funds as well as reducing the ability of the Welsh Government to meet our own carbon reduction targets and also deliver on the UK and EU commitments

Early closure of the Renewables Obligation mechanism has compromised a number of large scale projects in Wales with even those meeting the grace period criteria at risk of missing the new deadline as a result of the financial uncertainty caused by the announcement.

At the smaller scale, proposed changes to the Feed-in-Tariff are similarly undermining schemes being planned by community groups and others c who have already invested significant sums of their own money in taking projects forward.

Most recently, the decision by the Secretary of State for Energy & Climate Change to refuse 5 of the 6 projects making up the Powys conjoined enquiry, was another disappointing development. The Secretary of State saw fit to over-rule the Inspector’s recommendation to approve two wind farms and their connection to the national grid, perversely leaving the single project that was approved with no way of exporting the power it would generate.

These developments, and the ongoing uncertainty around whether onshore wind projects will be allowed to access future Contract for Difference rounds, have far reaching consequences in terms of immediate investment and employment by onshore wind developers and their supply chain in Wales, especially in the rural areas where projects are typically situated. This will also have huge reputational damage in terms of the UK’s credentials on green growth and our ability to decarbonise.

A stable funding regime is crucial in creating investor confidence to support onshore wind, which is already the lowest cost large scale form of renewable energy and is on a trajectory to becoming commercially viable within just a few years.  Reinforcing this success and driving it to the point of being self-sustaining will ensure that the cost to bill payers is minimised.  Recently the UK Climate Change Committee estimated that early action could benefit the economy by between £100 and £200 billion by 2030. The UK Government needs to acknowledge this, and have an open discussion with the renewable energy industry and Welsh Government to ensure that onshore wind is able to reach its goal of becoming subsidy-free and delivering maximum value for UK energy consumers.

However there are also the issues of climate risk which will continue to affect people on low incomes who may be disproportionately affected by policy interventions and lack the safety net of resources to cushion the direct effects of climate change.  

It is therefore critical that before making any decisions on the Renewables Obligation and Contracts for Differences that the Secretary of State for Energy and Climate Change fully considers the view of both the Welsh Government and project developers who are committed to using Wales’ natural wind resource to decarbonise our electricity supply at lowest cost to consumers, whilst also stimulating significant investment in Welsh businesses and communities.

Consulting with Devolved Administrations is an essential undertaking the Government needs to embrace representing as it does a fair and appropriate approach in reaching decisions that disproportionately impact Wales.  

We have therefore reinforced and reiterated our request that UK Government needs to engage fully with Welsh Government on determining an appropriate regime to support onshore wind and other low carbon generation technologies –specifically in respect of the Contract for Difference mechanism.  It is also vital to ensure that support is available for local generation projects that are not of a scale to compete with large projects but will reduce electricity demand and generate local benefit.  Securing the right regime is crucial for creating confidence in the actions of both UK Government and Welsh Government in delivering an affordable approach towards low carbon energy transition.