The Government’s decision to end subsidies for new UK onshore wind farms will have a “big impact” on the renewable energy industry.
Firstly this is a political decision on an issue which should be beyond politics, energy supply and security. In a month where the government gave the go ahead to develop the Swansea Bay Tidal lagoon (a good thing in itself), this decision flies in the face of the George Osbornes mantra of value for money. Onshore wind and indeed Solar are significantly cheaper and quicker to deploy. It also snubs the countless public opinion polls that support renewable energy, including onshore wind, governments own polling shows a solid 74% in support of Onshore wind, yet only 24% for Fracking, which they are keen to rush ahead with (see here) The decision lacks financial or political justification.
Investment and Jobs
This will clearly have a large impact on businesses and individuals involved in and employed by the onshore wind industry, but has larger knock on effects. Investors above all else value certainty. Where government policy is subject to short term change investors get spooked and take their money elsewhere, this could have a big impact on investment into Solar, and all other forms of clean energy.
Global financial advisory firm EY reported in March 2015 how policy uncertainty was reducing UK’s standing as a good place to invest ( here ).
This has real and tangible effects on jobs and growth in the UK economy. We saw that last year renewable energy jobs rose 9% against a UK wide rise of 1.2% but now more uncertainty will effect this. In a very direct example, we have been speaking to a major renewable developer about a ‘Head of Onshore Wind’ role to recruit, with a subsequent team to realise, in light of this announcement I doubt that will proceed, or if it does the role may now be based and focussed overseas. We live in a global economy, we’ve already seen many manufacturers and developers of solar and renewable technologies set up and focus investment overseas, away from the uncertainty of the UK. A number of roles we are now recruiting are for UK businesses but for roles in Africa, the Middle East and Americas.
You can only see politics at play in a decision that makes UK and Global objectives to reduce Carbon emissions and secure energy supply harder to meet, and goes against stated policy to provide value for taxpayers money. A happy day for the oil, gas and fracking community, let’s not forget that the fossil fuel industry globally gets, according to the IMF, £4.3Trillion in subsidy annually, including the most recent tax breaks for UK Oil and Gas of £1.3Billion in the most recent budget.
Clean energy brings jobs, investment, energy security and innovation to the UK and, in case the Government has forgotten, helps us meet our climate change commitments.