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UK Conservative Party Opposes Wind Subsidies

Brian Hicks

Written By Brian Hicks

Posted July 9, 2012

The U.K. government faces a conflict as over one hundred Conservative backbenchers push for cuts in onshore wind subsidies.

Members of the Tory party in the United Kingdom have called wind farms “inefficient,” according to the Guardian, and have called for cuts.

But the powerful wind power lobby group Renewable UK has issued warnings of legal action if the government acquiesces.

And Siemens (NYSE: SI) declared that their planned development of a $310 million wind facility in the North Sea would be jeopardized should the government give in to the Tories.

Though the Department of Energy and Climate Change recommended a 10% subsidy cut in onshore wind, the Treasury wants to reduce subsidies by 25 percent.

The Conservatives have turned to Prime Minister David Cameron to initiate the cuts despite the fact that wind power plays a major role in enabling the U.K. to reach its renewable energy targets.

The Guardian quotes Gordon Edge, Renewable UK’s policy director:

“It’s really important this process is seen to be evidence-based and rational … The government took technical guidance on this issue. If, at this point, the government says we are going to do less for onshore wind than it proposed that will be seen as nakedly political.”

Meanwhile, the German engineering giant Siemens deplored the lack of clear direction in policy as far as government involvement and investment in renewable projects is concerned.

This is not the first time such flare-ups between developers and the government has occurred. Just recently, major Danish wind power developer Vestas (CPH: VWS) abandoned plans for a wind facility at the Sheerness docks in Kent.

And South Korean turbine manufacturer Doosan gave up on plans for a research and development facility in Glasgow.

Although the U.K. has an impressive renewable energy program in which wind power plays a significant role, the question of subsidies has become increasingly fraught with tension as Conservatives voice opposition to the state’s support of onshore wind farms.

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