Britain to change subsidies to boost offshore wind power - BBC

Reuters
A boat powers past the Thanet Offshore Wind Farm off the Kent coast in southern England
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A boat powers past wind farm off the Kent coast in southern England September 23, 2010. REUTERS/Stefan Wermuth

LONDON (Reuters) - The British government plans to reduce support for onshore wind and solar energy while giving more backing to offshore wind power from 2015 onwards, the BBC reported on Wednesday citing sources within the Conservative-Liberal Democrat coalition.

The government had in June announced details of a scheme aimed at making renewable energy more attractive and less risky for investors by guaranteeing a minimum electricity "strike price" for wind, solar and other green energy.

The BBC said the government would announce later on Wednesday that the strike price for onshore wind and solar would be cut from the figures announced in June, while the strike price for offshore wind would be increased.

Germany's RWE in November scrapped plans to build the world's largest offshore wind farm in British waters only a month after warning that political wrangling over green energy was endangering billions of pounds of investment.

A spokesman for the Department for Energy and Climate Change declined to confirm details but said the government would be issuing a statement at 1000 GMT.

The BBC report cited sources from both coalition parties as saying there had been so much investment in onshore wind and solar energy that they no longer needed so much state support.

In contrast, they said, offshore wind sources still needed more subsidy to encourage long-term investment.

The scheme announced in June is part of an electricity market reform to help spur 110 billion pounds ($181 billion) of investment in low-carbon energy.

The investment is needed to replace ageing nuclear and polluting power plants, up to a fifth of which face retirement this decade. The government aims to treble the support for low-carbon technologies to 7.6 billion pounds a year by 2020.

To help give more certainty to investors, it proposes to guarantee to pay the difference between the variable wholesale power price and an agreed, fixed strike price, under a contract for difference (CfD) scheme.

This effectively sets a minimum price for nuclear, carbon capture and storage (CCS) and renewables.

In June, the price for offshore wind was set at 155 pounds per megawatt hour in 2014-2015, falling to 135 pounds/MWh by 2018-2019. The aim is to bring forward 8 to 16 gigawatts of offshore wind capacity, the government said at the time.

The price for onshore wind was set at 100 pounds/MWh in 2014-2015, falling to 95 pounds in 2018-2019, while for large-scale solar it was set at 125 pounds/MWh in 2014-2015 and 110 by 2018-2019.

(Reporting by Estelle Shirbon, additional reporting by Sarah Young; editing by Kate Holton)

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