‘Astonishing’ Amount of Wind Farm Subsidies Announced in Budget

Kayakers paddle on the Mersey Estuary near the Burbo Bank Offshore Wind Farm in Liverpool, United Kingdom, on Aug. 4, 2021. (Christopher Furlong/Getty Images)

Net zero critics have slammed a new wave of increased renewable subsidies for wind farms announced in the budget as “astonishing.”

On Wednesday, Chancellor of the Exchequer Jeremy Hunt delivered his final budget before the general election, unveiling over £1 billion in funds for green electricity.

Of this, £800 million will be allocated to offshore wind projects delivered from 2027. The remainder will earmarked for schemes such as solar farms, floating offshore wind and wave power.

The Allocation Round 6 (AR6) budget,  exceeding £1 billion, marks the largest ever announced to support renewable electricity Contracts for Difference, a government scheme that supports “new low carbon infrastructure.”

The cost of the support will come out of energy bills rather than from general taxation.

Another Hammer Blow

In a statement, Andrew Montford, director of Net Zero Watch, a think tank that scrutinises climate and decarbonisation policies, criticised the policy, saying that it was “another hammer blow aimed at the hard-pressed public.”

“The contrast with the new wave of subsidies is astonishing,” he said.

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“With the government having awarded astonishing price increases to the sector last year, a total of £1.4 billion of new subsidies is expected, a total that amounts to around £50 per household. This is another hammer blow aimed at the hard-pressed public,” he added.

“It can’t go on of course, but it is surely beyond doubt that the damage being done to our way of life by such irrational policies will be catastrophic,” he said.

‘Missed the Opportunity’

Some in the energy and renewable sector said that the funds were insufficient.

Energy UK, the trade association for the energy industry, said ina statement that the “vastly increased budget reflects a welcome recognition by the government that offshore wind developers face particularly difficult economic and market conditions.”

However, it added that in order to “meet our energy security targets the government should increase the budget, subject to information and insight on the pipeline to deliver greater capacity.”

RenewableUK’s chief executive Dan McGrail warned that the increase would not be enough to get the most out of the auction this summer.

“Although we welcome this budget increase, as it recognises that global economic conditions have changed, the Treasury has missed the opportunity to maximise the amount of offshore wind capacity which the UK could have secured in this year’s auction for new clean energy projects,” he said.

Industry body Energy UK’s chief executive Emma Pinchbeck said a big increase in the budget for the latest auction round “means investing more in homegrown sources of clean power that will bolster our energy security and reduce emissions—and bring wider economic benefits across the country”.

“While we still face an uphill battle to meet the 2030 target for 50 gigawatts (GW) of offshore wind, today has sent out an important signal in the face of growing international competition for investment and will help reestablish the UK as a leader in offshore wind.”

Long-Term Growth

The budget was the Conservative government’s last chance to influence the economy and change the tax burden before an election which could be called by Prime Minister Rishi Sunak in May, in the autumn, or as late as January 2025.

Mr. Hunt confirmed a 2 pence in the pound cut in national insurance contributions and also announced plans to abolish non-dom tax status, as he delivered his last budget before the general election.

Mr. Hunt told the House of Commons on Wednesday the government was sticking to its plan with a Budget for long-term growth and added, “It delivers more investment, more jobs, better public services, and lower taxes.”

The Epoch Times contacted the Department for Energy Security and Net Zero for comment.

PA Media and Chris Summers contributed to this report.