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Watchdog probes £16bn government energy deals

Early contracts for five wind farm projects were agreed.
Early contracts for five wind farm projects were agreed. Credit: Gareth Fuller/PA Wire

The government may have pushed up costs for consumers by awarding billions of pounds worth of contracts for renewables without any competition, the spending watchdog has said.

Eight long-term renewable energy deals with a total value of £16.6 billion were awarded early to avoid delays in investment as the government brought in the new "contracts for difference" scheme, which guarantees an agreed price for electricity generated by low-carbon energy.

The contracts were awarded to develop five offshore wind farms, for two coal plants to convert to burning biomass and for one new biomass combined heat and power plant, the National Audit Office said.

The NAO believes the scale of the contracts - awarded without competition between developers - may have increased costs for consumers, who have to meet the price of developing low-carbon power through their energy bills.

Tidal lagoon power project would create 1,850 jobs

If it gets the go-ahead, the tidal lagoon energy project in Swansea Bay could be the first of a series of five developments around the UK coast which could generate as much as 10% of the UK's electricity by 2023.

Tidal Lagoon Power, the company behind the project, said it was hoping that 65% of expenditure would be in the UK, boosting a homegrown supply chain and a possible future export market. The company has produced a video to explain the scheme:

The project includes creating a 10km sea reef, the reintroduction of the native oyster to Swansea Bay, an offshore visitor centre and national triathlon and water sports facilities.

According to the developers, research as part of the project's initial stages found that 86% of local residents were in favour of the scheme. The Swansea Bay project would save 236,000 tonnes of carbon a year and create 1,850 construction jobs.

Read: Tidal lagoon energy project plan to power 120,000 homes

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Tidal lagoon energy project to power 120,000 homes

Plans have been submitted to develop the world's first tidal lagoon energy project in the UK, which would provide renewable power for 120,000 homes for 120 years.

An aerial of the proposed site. Credit: Tidal Lagoon Power.

The developers of the £750-850 million project in Swansea Bay say their application is the first step to developing lagoon technology that could meet 10% of the UK's electricity needs from the tides.

The scheme would involve a six-mile (9.5km) wall built around Swansea Bay, creating a lagoon in the Severn Estuary with turbines that can harness the incoming and outgoing tides to generate power 14 hours a day.

Ukip: Change to wind power subsidies a 'political stunt'

The UK Independence Party has called the cut to onshore subsidies a "political stunt" to buy off voters opposed to turbines "despoiling the British countryside".

Energy spokesman Roger Helmer said the change "fails to address the real argument which is the nonsensical and frankly dangerous energy policy this Government is forcing upon UK taxpayers".

He said the taxpayer would still have to fund "this wasteful and downright ridiculous technology to be built out of sight".

Changes to subsidies 'good news' for renewable sector

An industry body representing the renewable energy sector has said that Government changes to subsidies are good news:

Today is actually a good news day for renewable electricity and renewable heat.

The real reason that support for solar and onshore wind will go down is that they are leading the race for cost-competitiveness with fossil fuels. Government policy is working and bringing down costs.

The important thing is that decisions are evidence-based, not purely political, and we need to see the methodology to assess that.

– Dr Nina Skorupska, Renewable Energy Association

Davey: Cuts to onshore subsidies not driven by politics

Energy Secretary Ed Davey has said that the decision to reduce subsidies was driven by the falling costs of generating onshore and solar energy, and not political pressure.

Energy Secretary Ed Davey
Energy Secretary Ed Davey Credit: ITV News

He told ITV News: "Because of our investments in renewable energy, we are seeing the costs fall ... It means we can still develop onshore wind, still develop solar, but it means we can also bring on some of the technologies for the next decade like offshore wind".

Rural wind farms have been a source of coalition tension, with many senior Conservatives staunchly opposed to the turbines, which Liberal Democrats say are needed to meet environmental objectives.

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Danny Alexander: Onshore wind will still play a 'big role'

Danny Alexander has insisted that onshore wind energy will continue to play "a big role" in the UK, despite the decision to reduce Government subsidies in this area.

Stirling Castle with the Braes of Doune wind farm behind it
Stirling Castle with the Braes of Doune wind farm behind it Credit: Andrew Milligan/PA Wire

The Liberal Democrat Chief Secretary to the Treasury said state help for onshore wind and solar was being reduced "slightly" in favour of offshore wind.

But he told BBC Radio 4's Today programme that the move would present better "value for money" and could open the way for an extra 10 gigawatts of energy by 2020.

The "strike prices" for renewable energy - the amount of subsidy the taxpayer pays to entice investors to make long-term commitments - is already set well above the current market value, but will be slightly lower for onshore wind and solar.

Read: Shape of the Chancellor's Autumn Statement is beginning to emerge

UK's green energy investment falls to 'seven year low'

UK investment in green energy has fallen to its lowest level in seven years, according to new figures from Bloomberg, reports the Independent.

The figures show that clean energy investment has fallen from £7.2bn in 2009 to under £3bn last year, and is forecast to be below £1.9bn in 2013.

In May 2010 David Cameron pledged that the coalition would be the "greenest government ever".

MP: Fracking industry will sap funding from renewables

The Liberal Democrat MP Tessa Munt has warned that giving the green light to fracking in the UK will lead to a "commercial stampede" and will sap investment from renewable energy sources:

Even as a small part of the energy mix, a push for shale gas will swiftly descend into a commercial stampede and investment will leak away from the renewable sector.

– Tessa munt mp
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