The renewable energy industry in the UK has welcomed Alistair Darling’s Budget announcement of a package, which includes a potential £525m of new money through a review of the support mechanism for offshore wind.

The Budget proposes to review the support given to the offshore wind from Renewables Obligation Certificates by £525m.

Electricity supply companies currently receive 1.5 ROCs for every megawatt hour (MWh) of energy they buy from offshore wind farms, which they can then sell on. Under the Chancellor's plans this will rise to 2 ROCs for the financial year 2009-2010, and fall back to 1.75 ROCS in 2010-11.

The UK has 9GW of wind energy projects on and offshore with planning consent or in construction, as much as 5GW of which could be completed within the next two-three years.

It is being said that sorting out funding issues at this stage is crucial if the nation has to make a decisive step towards reaching its 2020 renewable energy targets.

Because of the collapse in bank lending wind schemes currently seeking finance face potential delays, particularly those being developed by independent power companies that have historically relied on project finance to bring wind farms into operation. Under the arrangement negotiated by the Chancellor, the European Investment Bank will make available up to £4 billion for UK renewable schemes which cannot find project finance.