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Labour's 1bn Wind Turbine Rip Off

Date : 15.09.05

MPs say treasury is milking cash for renewable energy

Chancellor Gordon Brown was last night accused of profiteering from high
energy prices by exploiting the Government's support for windfarm

A study by the Commons public accounts committee concluded that up to 1
billion paid by electricity consumers to encourage the development of
renewable energy was being recouped by the Treasury.

The committee concluded that lavish subsidies paid to windfarm operators are
too high and should be diverted to encourage other forms of renewable

In a detailed report on the Government's renewable energy strategy, the
committee was highly critical of the subsidy regime, which is expected to
cost consumers 1 billion a year by 2010.

The committee said that subsidies paid to established forms of renewable
energy like wind were too high - leading to substantial profits for
operators. The report found that payments to some windfarm operators were
twice the level needed to make them viable.

Meanwhile, the committee found that subsidies paid to emerging technologies
like wave and tidal power were too low to encourage development.

In all, around one-third of the subsidy support, which is paid by consumers
each year through higher electricity prices, is being wasted, the committee

The report's findings will add to the row about a rash of proposals to
develop new windfarms across the Westcountry. Supporters claim the projects
are a valuable contribution to cutting carbon emissions. But critics insist
that they are inefficient and are only built to claim the subsidies on

The Renewable Energy Foundation, which has criticised the rush to build a
string of new windfarms across the Westcountry, said the report should serve
as a "wake-up call" to ministers.

Noel Edmonds, the Devon-based chairman of the foundation, said the report
provided further evidence of the "desperate need" to revise the subsidy

He added: "The committee supports expert analysis which has been showing
over the last year that the subsidy system over-supports onshore wind by a
huge margin. This has encouraged developers to go in far too close to
vulnerable villages and ecologically sensitive areas.

"Moreover, high value renewable technologies, tidal systems, biomass, and
even offshore wind, are being starved of investment because of this
misconceived and disastrous renewable energy policy. The Government must now
act, or lose all credibility in regard to energy policy."

Edward Leigh, the committee's Conservative chairman, said: "The Government
must start to target subsidy at the technologies which need it in order to
have a genuine prospect of becoming commercially viable."

Mr Leigh said it was wrong that consumers were forced to pay a "massive"
subsidy to the renewable energy industry without having any say on how it
was used.

He said it was "unacceptable" that the subsidy was not subject to scrutiny
by Parliament as it would be if it were paid directly by the state.

The report will increase pressure on ministers to change the system of
support. At present the level of subsidy paid to cheaper types of renewable
energy like wind is the same as that paid for forms like wave power, which
are still in development. Critics claim this has sparked a "dash for wind",
as developers eyeing massive profits put in speculative applications for new

The Department of Trade and Industry is currently reviewing the subsidy
system, although it has already indicated that radical changes are unlikely
when the review is published tomorrow.

A report by the National Audit Office earlier this year found that the scale
of the renewable subsidy will force up average electricity bills by at least
5.7 per cent, although this figure is likely to be higher once the costs of
connecting up hundreds of new windfarms to the national grid has been
factored in.

A spokesman for the DTI last night described the subsidy as "a price worth
paying for a key step towards reducing emissions".