Here's an extract that is rather tellig, I woonder if Chris Huhme would care to comment:
'The third sentence confirms that there is indeed a subsidy to onshore wind turbine operators via the legal obligation of electricity companies to buy electricity at artificially high rates (and then pass on the extra cost to us, the electricity consumers).Meanwhile the BBC continue to scare everyone about nuclear power, it's almost like they have an agenda.
Note that the DECC does not deny that the Renewables Obligation is a subsidy by any other name.
And remember the context of Mr Hammond's remarks: he was seeking to differentiate between onshore wind (not subsidised, he said) and offshore (which he conceded was subsidised).
In fact they are both subsidised in the same way but to different degrees. Onshore wind gets to charge twice the market price, offshore three times (because it is much more expensive).'
1 comment:
Hammond is not wrong. I have run the numbers many times. If the best onshore wind projects were given a floor price for the sale of electricity at around 4p/kWh rising atr the srt of rate that most economists expect fossil prices to rise then the projects would all make money in the long term.
The trouble is that the sort of small company that would own and run even a large wind farm does not have the balance sheet strength to put in place all the hedges that would be necessary to hedge the market price of electricity without a guarantee.
The ROC system is useless in supporting long term finance, but a fixed uplift in guaranteed feed in tariffs could do the job, and need not be a subsidy any more thatn any other hedge.
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