Scrapping funding for onshore wind projects will not affect existing portfolio Triodos Renewables
Triodos Renewables Executive Director Matthew Clayton comments on announcement to scrap funding for onshore wind
24-06-2015 | On 18 June 2015, Department of Energy & Climate Change announced that it plans to close Renewables Obligation for new onshore wind projects on 1 April 2016, a year earlier than planned. Only projects which have secured grid connection offers, planning consent and land rights will be able to secure a grace period during which it will still be able to qualify for Renewables Obligation Certificates (ROCs) beyond this date.
"Triodos Renewables will continue to contribute to cleaning up the UKs energy system, but this latest step may slow progress of the sector and ultimately cost the country more as we underutilise one of the countries greatest natural resources."
Matthew Clayton, Executive Director Triodos Renewables
New primary legislation will be introduced with details of the closure. The Government also announced that it wishes to review the Feed in Tariff (FIT) scheme later this year and as part of this review, to seek options at how community projects are being funded.
What does this mean for Triodos Renewables?
The Government's announcement was discussed at the Triodos Renewables AGM on Friday 19 June 2015. The board explained to the attending shareholders that the existing projects in our portfolio will not be impacted by the Government's decision as the Company's projects have already qualified for ROCs. This decision may however impact on our future investment strategy.
Impact on investment strategy going forward
In the next 12 months Triodos Renewables will only consider onshore wind projects which will qualify for either ROC, FIT or CFD (Contract for Difference). We will also continue to consider the variety of investment opportunities which exist in sustainable energy. These options include the sale of electricity directly to local industry, community projects and further consideration of technologies such as hydro-electric, solar pv, energy efficiency and demand side management. Decisions will continue to be made in line with the objectives of achieving the greatest impact, taking acceptable risk and maximising shareholder returns. We also hope that the Government will continue their commitment to renewables and that Contracts for Difference scheme will still be opened for onshore wind projects.
Matthew Clayton, Executive Director of Triodos Renewables comments: "As the UK Government remains committed to achieving its green house gas (ghg) emission reduction targets, onshore wind remains the cheapest way to deliver these targets. We like to flag that the onshore wind sector provides significant employment in the UK. Also, continued support of onshore wind will provide the UK with the cheapest means of achieving its ghg emission reduction targets. If the playing field was levelled, and subsidies removed from the fossil fuel industry we are sure that wind, hydro and solar energy would remain the least cost source of energy, with the ability to address security of supply issues."
Triodos Renewables will continue to contribute to cleaning up the UKs energy system, but this latest step may slow progress of the sector and ultimately cost the country more as we underutilise one of the countries greatest natural resources.