The British Wind Energy Association has warned that the UK will fail to meet its 2010 and 2020 renewables targets if the government does not step in to help struggling wind farm projects.
Onshore and offshore projects have been hit by the weakness of the pound against the euro and the difficulty in securing finance, with private developers hit the hardest. BWEA estimates that there are £10bn worth of ready-to-go wind schemes being held back by the poor financial situation.
In a budget submission to the Treasury, BWEA called for the Government to take the following actions:
• Underwrite floor prices in Power Purchase Agreements (PPAs). PPAs are the contracts signed between the developers and the supply companies who will buy renewable electricity. Supply companies can offer a floor price it will pay for electricity, usually at a cost to the developer. Instead, the Government could offer an insurance-type product to cover the developer if the actual price drops below the floor price.
• Socialising offshore grid costs. As in Germany, all grid users would share the cost of transmission charges, rather than the developer paying for it all.
• Direct capital relief. Introduce a programme of capital grants or Enhanced Capital Allowances to mitigate for the recent cost increases (due to the euro/pound situation)
• Increasing the offshore Renewable Obligation Certificate (ROC) multiple. A ROC is a green certificate issued to those that generate renewable energy. For every megawatt hour (MWh) generated they receive a payback from a licensed electricity utility company. Offshore wind currently attracts 1.5 ROCs per MWh.
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