The government has pulled the plug early on subsidies for onshore wind farms in the UK.
New wind farms will not be eligible for government’s subsidy from April 1 2016, new energy secretary Amber Rudd confirmed on Thursday.
Renewable energy firms had expected to be cut-out from the scheme, but not until 2017.
It is reported that the planned installation of thousands of wind turbines may now be in doubt, though some projects that have already had planning consent may be given some leeway.
RenewableUK, a trade association, has called for immediate talks between the government and renewable power companies with a view to ‘manage or at least reduce’ the impact of today’s decision.
Maria McCaffery, chief executive of RenewableUK, said: “The government’s decision to end prematurely financial support for onshore wind sends a chilling signal not just to the renewable energy industry, but to all investors right across the UK’s infrastructure sectors.
“It means this government is quite prepared to pull the rug from under the feet of investors.”
McCaffery also claimed fuel bills in Britain will increase directly as a result of the government’s actions.
On the London stock exchange, British gas owner Centrica (LON:CNA) is set to be a beneficiary, according to Augustin Eden, analyst at Accendo Markets, who highlights that rival SSE (LON:SSE) is one of the ‘players’ in UK wind.
“Gas loving Centrica has been fighting a war on two fronts of late - on the one side against cheap oil while on the other against the onslaught of heavily subsidised and thus far relatively feeble and unpopular renewables,” Eden said in a note.
“The idea that paying people to populate their land with technology that cannot fulfil the UK’s energy demand, rather than funding dedicated renewable technology R&D so that one day it can, is finally finding resistance in fact while natural gas will find support as the soon-to-be unchallenged best alternative to both coal and oil.”