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The government has softened its stance on the closure of the Renewables Obligation (RO) support scheme to allow almost 3GW of onshore wind capacity to move forward through an amended grace period.
The government originally offered the grace period to those projects with planning permission, a grid connection and land rights. This, the government estimated, would allow 2.9GW of capacity to move ahead. But the government is now offering an extra nine months to those projects which have struggled to secure financing in order to achieve the same total.
“The projects that are eligible for the grace period will need to demonstrate either that they had planning consent as at 18 June; that they have successfully appealed a planning refusal made on or before 18 June; or that they have successfully appealed after not receiving a planning decision due by 18 June,” the government said in a statement.
“Projects that have met all these criteria and can demonstrate that they have struggled to secure finance from lenders since 18 June will be allowed extra time but no longer than nine months,” the statement added.
Industry groups said the government’s admission that investor confidence has been damaged, and should be allowed time to recover, will help to improve trust in the sector.
“It is clear that government has sought to address some unintended consequences of the decision to close the RO,” said Michael Rieley senior policy manager for Scottish Renewables.
Renewable UK’s deputy chief executive also welcomed the government’s acknowledgement of “the financial uncertainty caused by these changes” and said that the additional time offered “will help rebuild investor certainty”.
Just weeks after the general election energy secretary Amber Rudd fulfilled the Conservative Party pledge to halt the spread of onshore wind by closing the RO scheme to onshore wind projects, saying that this would protect customers from high bills.
“There is no magic money tree,” Rudd told the Conservative Party conference earlier this week.
“As we have already shown, we will be tough on subsidies. We said in our manifesto that we would halt the spread of subsidised onshore windfarms… And six weeks into this Parliament, that’s what we did.”
However, analyst estimates of onshore wind deployment by the end of the decade have barely changed as a result of the RO cuts. Currently the UK has almost 9GW of onshore wind capacity already installed with a consensus estimate of 13GW by the end of the decade.
The government estimate for 2020 is now just slightly lower at 12.3GW as a result of the RO closure.
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