RWE Halts $1.4BN of Onshore Wind Plans Due to UK Policy

RWE AG has halted about 1 billion pounds ($1.4 billion) of planned onshore wind farms in the U.K. because of government efforts to halt aid and restrict planning for the technology.

RWE’s Innogy renewables division canceled nine planned wind farms in England representing about 250 million pounds of investment, Mike Parker, head of U.K. onshore wind at the utility, said on Jan. 18 in an interview in London. Another 10 to 12 projects costing 650 million pounds to 800 million pounds in Scotland and Wales have been put on hold, with the utility spending just the bare minimum to maintain legal rights, he said.

“If we had a route to market, they were all viable projects that we were prepared to spend money on,” Parker said.

Energy Secretary Amber Rudd has already ended one subsidy program for onshore wind a year early and also has signaled that she’s looking at cutting subsidies to the technology under the government’s contracts-for-difference, or CfD, program. Her ambition is to protect consumers, who pay for the aid programs through their bills. RWE Innogy Chief Executive Officer Hans Bunting said that argument should work in favor of onshore wind farms.

“The customer should not pay more than he has to, and onshore wind, especially at the large scale, is the cheapest form of renewables that we have,” Bunting told reporters on Jan. 18 at a meeting in London.

Planning restrictions have also made it harder to build new wind farms in England, though such decisions are already devolved to the local administration in Scotland and are likely to be devolved to Wales this year.

“You have local devolved administrations who can make decisions that they want things, but they haven’t got the economic lever to allow them to happen,” Parker said. He urged the government to bring clarity to the CfD program by saying onshore wind will be able to compete alongside other technologies for the contracts, which guarantee a set price for power over a set number of years.

©2016 Bloomberg News

Lead image: Royd Moor. Credit: Shutterstock.

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