According to the government's national infrastructure plan, support for onshore wind will be cut by £5/MWh (EUR 6/MWh) to £95/MWh from 2015. It will fall to £90/MWh in 2017-19. Offshore prices will stay at £155/MWh in 2015, before falling to £150/MWh in 2016-17 and £140/MWh in 2018-19. Under strike prices revealed in July, by 2019 offshore wind was to cost £135/MWh and onshore £95/MWh.
The scheme is part of the UK government's contracts for difference programme that will form part of the upcoming energy bill. The changes will take place from 2015 and will only apply to new projects. The government has said onshore and solar would be cut because they no longer needed as much support.
Many observers have pointed out that although onshore wind's cost of energy is falling, the subsidy reductions could affect community wind projects that are around the feed-in tariff level. It is predicted some projects could even fall by the wayside.
But treasury minister Danny Alexander was quoted as calling the changes "a rebalancing", while the Department of Energy and Climate Change hailed an additional £40 billion investment up to 2020.
Brent Cheshire, UK chairman of Danish utility and offshore developer Dong Energy, spoke positively, describing the changes as "a concrete step in the right direction".
Alexander said the government is committed to reaching 10GW of offshore capacity by 2020 - well below the 18GW goal set out in the UK Renewable Energy Roadmap.