As predicted, wind industry blackmails the UK - demands yet more subsidies

London, 5 July - Net Zero Watch has urged the Government to stand up for consumers and businesses by rejecting the wind industry’s latest demands for more subsidies.

In a move that gives the lie to years of propaganda claiming falling costs, the wind industry’s leading lobbyists have written to the Government, threatening to abandon the UK unless there are hugely increased subsidies for their companies (see RenewableUK press release).

The industry is claiming that unforeseen rising costs now necessitate and justify three actions:

1. A vast increase in the budget for the fifth auction (AR5) of Contracts for Difference subsidies, with an increase of two and half times the current levels for non-floating offshore wind alone;

2. Special new targets and thus market shares for floating offshore wind, one of the most expensive of all forms of generation, and, most importantly of all,

3. A revision to the auction rules so that the winners are not determined by lowest bids but by an administrative decision that weights bids according to their “value” in contributing towards the Net Zero targets.

This would in effect not only increase total subsidy to an industry that was until recently claiming to be so cheap that it no longer needed public support, but also provide it with protected market shares, all but entirely de-risking investors at the expense of consumers. It would also be an open invitation to graft and corruption.

The Government should reject these self-serving demands on three grounds:

1. The UK economy cannot be expected to continue to subsidise a sector that is still uneconomic after nearly twenty years of above-market prices and guaranteed market share. The wind experiment has failed and must be wound down.

2. UK consumers of all kinds, from households to businesses, are already experiencing extreme pressures on budgets, and a further burden on the energy bill simply cannot be tolerated. Government must recognise that households and businesses are unable to afford yet more subsidies to the wind industry.

3. The industry’s current cost difficulties are neither unforeseen nor unpredicted but have been obvious to careful observers for over a decade.

Dr John Constable, NZW’s energy director, said:

It would be both absurd and counterproductive for government to bail out the wind industry in spite of the evident failure to reduce costs. A refusal to learn from mistakes will be disastrous.”

Notes for editors 

Articles and studies on unrealistic offshore wind bids for Contracts for Difference:

1. Gordon Hughes, Capell Aris, John Constable, Offshore Wind Strike Prices: Behind the Headlines (GWPF: London, 2017)

2. Gordon Hughes, Who’s the Patsy? Offshore wind’s high-stakes poker game (GWPF: London, 2019)

3. John Aldersey-Williams, Ian D. Broadbent, Peter A. Strachan, “Better estimates of LCOE from audited accounts– A new methodology with examples from United Kingdom offshore wind and CCGT”, Energy Policy, 128 (2019), pp 25-35.

4. Gordon Hughes, Wind Power Economics: Rhetoric and Reality: Volume I: Wind Power Costs in the United Kingdom (Renewable Energy Foundation: 2020).

5. Gordon Hughes, Wind Power Economics: Rhetoric and Reality: Volume II: Wind Power in Denmark (Renewable Energy Foundation: 2020).

6. Andrew Montford, Offshore wind: Cost predictions and cost outcomes (GWPF: London, 2021)

7. Kathryn Porter: Addressing the high real cost of renewable generation (Watt Logic 2022)

8. Gordon Hughes, “Wind Costs will Remain High” (NZW, 2022)