A new report released by Aurora Energy Research has found that the UK Government has underestimated the amount of subsidies it will have to pay to UK wind farms by £80 million per annum.
The findings of the report relate to the distorted methodology used to estimate the required Contract for Difference (CfD) funding behind eleven contracts the UK Government has allocated to UK renewable projects, including Moray East Wind Farm in Morayshire and Grangemouth Renewable Energy Plant in east Stirlingshire.
According to the report, unless the government makes desperate changes to its methodology it risks even greater loss of funding from future renewable auctions.
The report stated that the ‘capture price’ acquired by offshore wind farms is comparatively low to the wholesale price and would therefore leave a £80 million shortfall in capital.
There have been previous concerns over the estimated subsidies and the inconsistency of wind power.
In an article for The Telegraph Nick Timothy, former advisor to the Prime Minister, highlighted the major problems that continue to exist within the energy sector and called for the scrapping of subsidies for wind power. In the article, he said: “Britain still has significant trouble with its energy retail market, its power generation, and its energy strategy. All three require decisive government action.” He added: “Britain has spent over £23 billion on subsidies for renewables since 2002, and now is the time to phase them out completely.”