England is simply not windy enough for more turbines. That’s according to RenewableUK chief executive Hugh McNeal, who’s quoted in the Daily Mail today as saying that any further investment into English-based wind turbines wouldn’t be economically sensible.
Regular readers of the TaxPayers’ Alliance blog will remember that this isn’t the first time the financial viability of this particular renewable energy source has been called into question. The UK has invested £1.25 billion into wind farm projects – as much as the rest of the world combined. Despite this, they produce only a small fraction of our UK energy supply – an average of just 5.6 per cent of our total electricity needs.
So why is there such a demand for these inefficient turbines? In a word: subsidies. Up until this month, new wind farms were eligible for large taxpayer-funded subsidies (known as Renewable Obligation Certificates). This taxpayer handout meant that companies were incentivised to install farms at a rapid rate in order to cash in on the scheme. With English turbines only producing energy around 25 per cent of the time they’re in use, the only way these companies were able to make a profit on the installations was through the Renewable Obligation Certificates. Further problems have occurred due to the government feed-in tariff, which rewards UK residents that generate their own electricity with payments from their energy supplier.
These market-distorting subsidies have led to an inflexible supply of expensive unreliable electricity flooding the market during the summer and being noticeably absent from the grid for the rest of the year – a reality that has a knock-on effect with our household energy bills. Indeed a recent report by Cornwall Energy found that energy subsidies will have risen 124 per cent by 2020/21, which in itself will mean an extra £100 on your energy bill a year.
For too long the renewables industry has tried to ignore the inevitable realities of renewable energy production. It’s not very windy in England, neither is it especially sunny. Yet the government has allowed the supply of these farms to spiral, with the promise of taxpayer cash to smooth the ride. As Keith Anderson, chief executive of ScottishPower Renewables, has said: “the industry has been in danger of behaving like salivating subsidy junkies”.
We think it’s time to end to these subsidies once and for all. Incentivising failure is not an acceptable way to spend the £800 million in taxpayers’ cash that went towards onshore wind turbines last year. While we welcome the abolition of Renewable Obligation Certificates for new wind farms, the government needs to realise, and realise quickly, that until they remove all of these harmful payments the market will continue to struggle, at a huge expense to all of us.