BWEA demands bailout package
The British Wind Energy Association (BWEA) has urged the government that the credit crisis has hit the industry badly and made financing of projects prohibitively expensive.
Rising costs and the credit crisis have lead to a funding gap of about £2 billion for nine projects that have planning consent but haven’t been built. Moreover, the BWEA warned that, if the government does not take urgent action to fill the funding gap, these farms, which would provide enough capacity to power about 4m homes, would be cancelled.
The energy association has made three suggestions to the government. One would be to double the per-megawatt subsidy – so-called renewable obligation certificates (ROCs) – that offshore wind receives. Increasing the subsidy from one ROC per megawatt to two would triple the revenue that power companies collect for wholesale electricity. The second suggestion would allow for direct aid through government grants or tax breaks on construction costs and the third would be to distribute the cost of building the offshore grid – expected to be about £10 billion – among all power companies, whether they have offshore farms or not.
The plea has come at a time when important players are deciding on crucial projects. For instance, Eon and its partners Dong Energy and Masdar are expected to decide by June whether to build or abandon the London Array, the largest proposed wind farm in the world. Centrica and Npower also have projects that they have yet to approve.