By Emily Beament, Press Association Environment Correspondent
A “LOOPHOLE” allowing some wind power schemes to claim overly generous
subsidies costs hundreds of millions of pounds which could be spent on more
clean energy, a report has claimed.
Under the “feed-in tariff” payments system for small-scale wind schemes,
operators are deliberately reducing the output from larger turbines to
qualify for more generous subsidy payments meant for smaller turbines, the
study by think-tank IPPR said.
The practice could be committing consumers – who pay for the feed-in tariff
payments on their bills – to paying out £400 million in excess subsidies
that could be going to support more low-carbon energy generation, the study
said.
Labelling turbines as having a lower capacity than they really do, known as
“de-rating”, is easy to do in a system with a lack of scrutiny and means
investors could be receiving as much as £100,000 a year in excess subsidies
for each turbine, IPPR said.
The practice has become widespread among the operators of schemes with one
or two turbines, and leads to unnecessarily large wind turbines which are
not generating as much electricity as they could, the think-tank claimed.
It also threatens to undermine support for the onshore wind sector, IPPR
researchers said as they accused the Government of failing to take action
to address the issue.
IPPR called for moves to close the loophole, including a short-term cap on
the rotor size of turbines seeking the more generous subsidy rates and
longer-term changes to the scheme.
Joss Garman, IPPR senior research fellow, said: “This loophole is
short-changing bill payers to the tune of millions of pounds a year.
“Ministers should act immediately to close down what is becoming a ‘feed-in
frenzy’. It is distorting the energy market, lining the pockets of
investors and undermining public confidence in Britain’s vital clean energy
sector.”
Charles Ogilvie, energy consultant and co-author of the report, added: “The
feed-in tariff should be driving innovation to create a sustainable, broad
base of renewable energy for the UK.
“By leaving loopholes like this open for so long, the Government is
effectively squandering support for the innovators and entrepreneurs who
play by the rules.”
But wind industry body RenewableUK’s deputy chief executive, Maf Smith,
said operators adhered to the rules drawn up by Ofgem and the Department of
Energy and Climate Change.
“De-rating is a complex issue – for example, it may be necessary because of
limits in the capacity of the grid to cope with the amount of electricity
that’s being generated, or because a site where the wind is lower needs a
turbine with longer blades to make the best use of it.
“The IPPR report doesn’t take account of these legitimate reasons for using
the right turbine in the right location.
“It’s also worth remembering that we’re talking here about 103 operational
turbines at the most. That’s less than one per cent of the 12,000 small,
medium and large-scale onshore wind turbines generating in the UK.”
And he insisted that de-rated turbines did not cost consumers more money as
the feed-in tariff budget was capped by the Government.
“We want to work with Government and the regulator to make the most of the
UK’s exceptional wind resource and ensure that small businesses and
individuals are encouraged to generate clean energy,” he added.
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