ONSHORE wind energy in the UK is . This, combined with plans to give local communities more power to reject wind farms could stop the country鈥檚 cheapest big form of clean energy in its tracks.
It鈥檚 unclear how the government squares this with its commitment to 鈥渄eliver clean energy as cheaply as possible鈥�, renewable energy targets, carbon budgets and the need to tackle climate change.
At the heart of this issue is the fantasy of a free, level and unsubsidised electricity market. In UK and European markets, fossil-fuel generators set the price of electricity to reflect operating costs, plus a margin 鈥� so falling gas prices, for example, can push down wholesale electricity prices. But if wind energy investors sell into this standard market without subsidy, they are paying all their money up front to build expensive turbines and taking a huge gamble on what happens to future electricity prices set by generators burning fossil fuels.
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鈥淎t the heart of this issue is the fantasy of a free, level and unsubsidised electricity market鈥�
So the irony of this market is that it places the commercial risks of fossil fuel price volatility on renewable energy.
There is another big problem. A recent International Monetary Fund found that fossil fuels enjoy a $5 trillion global subsidy. Critics say that this figure is largely an estimate of environmental harm rather than monetary support. You can debate the semantics, but to place wind in a market that ignores such costs and is biased against clean sources is just bad economics.
By all means take onshore wind out of the 鈥渟ubsidy鈥� regime, but only if and when a risks and environmental costs is created.
Such thinking sets the real test. Is the new position a legitimate concern about subsidising a technology that is now mature, or a cloak for killing it because it is unpopular in the shires? The latter would mean either a huge increase in the share of gas in the UK mix, more expensive offshore wind being favoured or far more dependence on electricity imports.
Similarly, are changes to planning rules intended to create a level playing field for local energy developments or to favour fracking over wind?
The debate is just beginning.
This article appeared in print under the headline 鈥淓nergy policy in a spin鈥�
