By Karolin Schaps, Estelle Shirbon and Nina Chestney
LONDON Dec 4 Britain boosted support for
offshore wind farms on Wednesday to attract multi-billion pound
investments and maintain its lead as the world's biggest
offshore wind market, while it cut subsidies for wind parks
built on land.
The move comes just one week after Germany's RWE npower
scrapped plans for a huge UK offshore wind project.
The company said the new subsidy would not change its decision,
because it was still seeking improvements in the technology.
Under the new provision, the government guarantees to pay
offshore wind developers the difference between wholesale power
prices and a fixed strike price of 140 pounds ($230) per
megawatt-hour (MWh) for the 2018/19 fiscal year, 5 pounds more
than its provisional subsidy figures in June.
The announcement gives clarity to investors, who can now
calculate their guaranteed returns on renewable energy projects
to the end of the decade.
"The strong commitment to offshore wind demonstrated by the
government today gives us the confidence to move forward with
our future pipeline of projects," said Brent Cheshire, UK
chairman of Denmark's DONG Energy, in a statement. DONG is
investing 4 billion pounds in British offshore wind farms.
Britain has ambitious plans to boost production of renewable
power to help it meet legally binding targets to reduce carbon
emissions and to replace ageing nuclear reactors and polluting
coal-fired power plants, up to a fifth of which face retirement
The strike prices set for renewable projects were all
significantly above current spot wholesale power prices of
around 50 pounds per MWh to help them compete with more mature
The government estimates that around 40 billion pounds will
be spent on building new renewable energy projects in Britain by
2020 to double its current installed green energy capacity of 20
"Investors are queuing up to express their interest in these
contracts. This shows that we are providing the certainty they
need, our reforms are working and we are delivering ahead of
schedule and to plan," said Britain's Secretary of State for
Energy and Climate Change, Edward Davey, in a statement.
The strike prices for onshore wind parks, meanwhile, were
cut by 5 pounds from the provisional figures to 2019. These wind
farms have often come under fire by local residents for
obstructing views and making too much noise and have struggled
to get planning approval.
Strike prices for large-scale solar plants were reduced by 5
pounds for 2015-17 and lifted by 5 pounds in 2017/18 and by 10
pounds in 2018/19.
"Reducing strike prices for onshore wind and solar could
reduce deployment of these technologies, even though they
require lower subsidies than offshore wind," Matt Brown,
director at energy consultancy Poyry, said.