England local incentive plans will make some projects "unviable"

UK: The British government is today expected to unveil proposals aimed at giving local communities in England a greater say in the development of onshore wind farms, including local incentive payments that could make some projects unviable, according to industry lobbyists.

RWE's Little Cheyne Court wind farm in Kent
RWE's Little Cheyne Court wind farm in Kent

Following today's deadline for responses to a consultation on how wind farm developers should engage with local communities, energy and climate change secretary Ed Davey will unveil plans to reform current permitting laws under which any project over 50MW installed capacity is decided at national level. This will allow local communities to have a say in all developments in their area.

The proposal is coupled with a pledge to offer local communities incentives that could include cutting residents' electricity bills by up to 20% and funding of facilities such as sports halls.

Trade body RenewableUK, which already recommends developers create local funds worth £1,000 (EUR 1,170) a year for every megawatt installed for the life of a project, welcomed the incentive plans.

However, it warned that the government may choose to set funds as high a £5,000/MW, making some future projects "unviable".

"Developing wind farms requires a significant amount of investment to be made upfront," said RenewableUK chief executive Maria McCaffery.

"Adding to this cost, by following the government's advice that we should pay substantially more into community funds for future projects, may unfortunately make some onshore wind energy developments uneconomic in England, so they will not go ahead, and that is very disappointing."

The new rates would apply to onshore wind projects in England that are yet to be built. RenewableUK estimates that, under the new guidelines, onshore projects already announced — those currently going through the permitting process or approved but not yet under construction, amounting to nearly 1.5GW — would contribute benefits worth nearly £1.48 million over the 20-year lifetime of those projects. This would represent a fivefold increase in the value of benefits to be funded by the onshore wind industry for local communities in England.


UPDATE 6 June 2013: The Department for Energy and Climate Change (Decc) has confirmed its proposals include plans to revise its community benefit protocol by the end of the year, to include an increase in the recommended community benefit package in England from £1,000/MW of installed capacity per year, to £5,000/MW/year for the lifetime of the wind farm.

At the same time, a new community energy strategy, published this autumn, will set out how government can encourage community ownership and investment in wind projects. A call for evidence on this strategy has been published byDecc  today.

As well as this, a joint Decc/Defra Rural Community Energy Fund will provide £15 million in loans and grants to rural communities.

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