Lords backs down on grace period for onshore wind subsidies

The Energy Bill is soon to become law after the Lords backed down on a proposed extension to the grace period for the early closure of the renewables obligation (RO) to onshore wind.

Defending the government’s opposition to an extended grace period, energy minister Lord Bourne said: “Onshore wind is a well-established technology, the costs of which continue to fall, so it is right that government should scale back subsidy. The government have a mandate to deliver on their manifesto commitment to end new subsidies for onshore wind.

“The policy as set out by the government strikes a fair balance between the public interest, including protecting consumer bills and ensuring an appropriate energy mix, and the interests of onshore wind developers.”

Last month Lord Grantchester tabled an amendment which would have enabled projects to remain eligible for RO certificates even if they did not secure planning permission by the cut-off date – 18 June 2015 – so long as they had already received “democratic local consent”.

The amendment was passed in the Lords but voted down in the Commons, as was an adapted version which limited eligibility to projects which went on to receive planning permission within three months of the cut-off date.  

A further attempt to reinstate the amendment was defeated in the Lords yesterday evening by 204 votes to 109. As there are no more amendments to discuss, the bill will now proceed to royal assent at which point it will become law.

Lord Grantchester said: “It is deeply disappointing that the government are unable to agree an entirely fair, minor adjustment to the grace period concessions that have had to be woven into the bill following the opportunistic inclusion of the decision on the early closure of the renewables obligation.

“Yes, the Conservatives won the election and had included in their manifesto a commitment not to undertake new subsidies for onshore wind. However that may be interpreted, it cannot really mean that voters thought that they were voting for disruptive, arbitrary decisions regarding schemes with local backing that were nearing implementation.”

RenewableUK chief executive Hugh McNeal said: “The government has said that in the future the UK’s electricity will be generated by gas, nuclear and renewables and not from coal. Onshore wind is now the cheapest of these options. 

“With the pain of the Energy Bill finally behind us, we need to look forward and find sensible ways to take advantage of wind power to ensure consumers’ electricity bills are as low as possible.”

In April the government confirmed that early closure of the RO would not be enforced retroactively, after the original planned closure date – 31 March 2016 – passed by before the bill could become law.