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Energy law: Renewable UK threatens legal action over subsidy cuts

Companies in the wind power sector have warned that they may seek a judicial review of any government decision to cut the subsidies it offers for onshore power generation.

The Department for Energy and Climate Change (DECC) has proposed a cut in subsidies for onshore power of around 10%. However, some backbenchers believe that subsidies should be cut entirely, threatening the industry with a major blow to future financing.

Renewable UK, which represents the industry, has said that any change to the subsidies offered must be based on evidence.

"It's really important this process is seen to be evidence-based and rational" Gordon Edge, Renewable UK's Director of Policy told BBC News.

Wind power subsidies are a political topic, dividing communities between those who accept their presence in return for money into the local economy and those who oppose them for their aesthetic cost.

In Ayrshire some residents are campaigning for a 50% reduction in subsidies to reduce the impact of wind farms on the local environment. Aileen Jackson lives a short distance from a wind turbine in Ayrshire.

"The subsidies need to be cut at least 50% to stop the wind farms taking over our landscape and making residents' lives a misery," she told the BBC.

Public outcries have prompted at least 100 Tory MPs to write to the chancellor requesting an end to subsidies paid out of current energy bills. However, cabinet ministers believe that cutting subsidies too fast could be detrimental. Tim Yeo is the Chair of the Energy and Climate Change Committee in the House of Commons.

According to the BBC, Mr Yeo said: "I think some people don't appreciate that amongst the low carbon renewables, onshore wind offers better value than many alternatives. Reducing onshore wind would mean putting up bills for consumers."

Most experts agree that the subsidy could be cut, with DECC commissioned studies by Arup and Poyry suggesting a cut in the region of 10% could be sustainable.

Industry insiders believe that a major cut to subsidies could put an end to the industry. Rod Wood is the managing director of Community Wind in Ayrshire.

"We can tolerate a cut of 10% in subsidy. But 25% - forget it. It would kill the industry stone dead," he told BBC news.

Source:

Fight on for wind power subsidies (BBC)