Blown Away petition: full text

On the 23rd of November, the new chancellor Philip Hammond will present his first autumn statement. It’s his first major policy announcement and a key moment to ensure onshore wind isn’t hung out to dry.

We’ll be there standing up for clean energy along with thousands who've already signed our petition. This is the letter we'll be handing in.

Make sure you add your voice.

Dear Mr Hammond,

Creating a route to market for the UK’s cheapest clean energy source

We were incredibly encouraged by your recent words in Boston, reaffirming your commitment to a low carbon economy. We share your view that safeguarding the planet is not a competing aim with ensuring future prosperity. That is why we are writing to you today to ask that a Contracts for Difference pot 1 auction be held as soon as possible to ensure that bill payers are not obliged to give fossil fuel generators more financial support than onshore wind power.

Since 2010 deployment of renewables in the UK has outstripped all but the most bullish expectations, meaning a quarter of UK electricity demand is now met from renewable sources. We warmly welcome the recent announcement of £290m worth of contracts for less mature renewable technologies. Furthermore, the success of the carbon price floor in pushing coal off the grid at a remarkable pace - and a commitment to end unabated coal power by 2025 - has seen an unprecedented decarbonisation of our electricity. In taking these decisions your Government is displaying global leadership on climate change at a time when this is most needed.

Lowest cost decarbonisation

The government is right to seek lowest cost decarbonisation, protecting consumers and businesses from excessive costs as pledged in the Conservative’s 2015 manifesto. Yet current policy guarantees mean this pledge will not be met. The decision to end financial support for onshore wind - and commercial scale solar due to the design of the CfD auctions - means the cheapest forms of low carbon electricity will be effectively locked out of the energy system moving forward. Decarbonisation costs for the taxpayer and consumer will increase and net subsidies required to meet carbon budgets will remain higher for longer. [1]

Onshore wind is competitive

Recently released government figures demonstrate that onshore wind will be cheaper than new gas power by, at the latest, 2020 - with significant scope for costs to fall below those for gas before that date. [2] By 2025 onshore wind will be the cheapest new power capacity by far. The same figures show solar costs matching gas by 2020 and dropping below it shortly after.

Onshore wind is popular

Onshore wind power is a cost-effective and rapidly implementable decarbonisation strategy. It is also very popular.

  • An October 2016 poll conducted by ComRes found 73% of the UK public back onshore wind farms (17% opposed). Support remains high in rural areas at 65%. [3]
  • Notably, support in Scotland - which hosts around 60% of UK onshore wind - is highest at 80%.
  • Only 34% support fracking (45% oppose), and 46% support nuclear (37% oppose).
  • The latest BEIS public attitudes tracker confirmed support for onshore wind at its highest since polling began in 2012, at 71%. Fracking support was 16%. [4]

Fossil fuel subsidies continue

While onshore wind is denied financial support, hundreds of millions of pounds are allocated to existing and future fossil fuel plants through the capacity market (and other mechanisms designed to ensure security of electricity supply).

  • Since 2014 £2.8bn of contracts have been awarded to generators. £1.8bn of this went to fossil fuel generators. [5]
  • In 2014 alone at least £675m of contracts, starting in 2018, were awarded to existing gas and coal plants simply to stay open. [6]
  • Around £1bn more public money will be contracted in the upcoming capacity market auctions, with no guarantee that any new gas capacity will be brought forward.

Tools for ensuring system security at peak demand periods are necessary during the shift to renewables. However, the design of the capacity market means we are overpaying fossil fuel generators and incentivising dirty, inefficient forms of power whilst failing to bring forward sufficient storage, interconnectors and demand response projects. This locks our energy system into fossil fuels, endangers emissions targets and likely increases cost over the long term.

Investor confidence

Lack of support for onshore wind is seriously undermining investor confidence. Without a clear indication from the government that it intends to provide a route to market, the UK risks losing billions in investment and triggering an exit of key companies from the UK market. This will hamper future cost reductions, contributing to increased decarbonisation costs long term.

In 2015 £400m was spent on onshore wind in the UK,[7] supporting 13,600 jobs. [8] In 2015 Scottish Renewables estimated that £3bn of future Scottish investment was being put at risk with the ending of financial support. [9]

It would be a serious and unnecessary loss to the UK’s economy at a crucial time to abandon such a success story.

Instead of overpaying fossil fuel generators we should support existing, proven clean energy alternatives.

While the Conservative Party’s 2015 manifesto pledge to ‘halt the spread of subsidised onshore wind farms’ remains in force, it is highly debatable what now constitutes ‘subsidy’ when no new generation capacity of any kind will be brought forward without guaranteed financial support from the government. A ‘no subsidy’ regime for mature technologies - both fossil and renewable - is simply unworkable.

The accounting method used for the Levy Control Framework is misleading. Even if no further renewables were built, bill payers would still be required to fund the gap between wholesale prices and the cost of new CCGT plants. Only support above this level should be considered a subsidy, reflecting the need to support less mature technologies to bring costs down. As the recent BEIS levelised cost of electricity figures show, onshore wind roughly matches new CCGT on cost already - and will be cheaper by 2020 at latest. [10]

It is entirely reasonable to offer subsidy-free Contracts for Difference to onshore wind, enabling new projects to lower the cost of decarbonisation. Will the government commit to this? If not, why not?

In light of the facts above, and in advance of the Autumn Statement, we the undersigned call on the Chancellor to ensure that fossil fuel electricity generation is not given more financial support than clean onshore wind power.

This would mean allowing onshore wind to compete in a pot 1 Contracts for Difference auction as soon as possible, with a tapering cap on the administrative strike price to ensure further cost reductions over time.

This will provide a route to market via which onshore wind can compete with all new electricity generation capacity and ensure decarbonisation at least cost to the public. It will help realign energy policy making with national public opinion, and provide a predictable basis for investment in a crucial emerging sector driving the UK’s green economy.

We would welcome a meeting to discuss this further and look forward to hearing back from you at your earliest convenience.

Add your voice to demand that dirty fossil fuel electricity is not given more public money than clean onshore wind power.

Photo: Andrew Hill Creative Commons