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Onshore Wind Power

Volume 533: debated on Thursday 20 October 2011

1. What recent assessment he has made of the effect of subsidies for onshore wind power on the levels of energy bills for consumers; and if he will make a statement. (75582)

Before I begin, I should like to offer my apologies on behalf of the Minister of State, my hon. Friend the Member for Bexhill and Battle (Gregory Barker), who is unable to attend owing to pressing engagements in Cape Town. As Minister of State with responsibility for climate change, he is deputising for me at a vital meeting in advance of this year’s United Nations framework convention on climate change negotiations so that I can be here today.

Support for onshore wind through the renewables obligation is estimated to add £5 to £6 to an average household annual electricity bill of £585 in 2011. The Government recognise the need to protect hard-pressed consumers and are committed to driving down the costs of renewables, as well as realising the economic growth and new jobs that renewables projects bring.

I thank the Secretary of State for his answer. He is well aware that the level of subsidy granted drives the siting of wind turbines, not their efficiency, and that this drives price, meaning that consumer bills for energy produced from these things are higher than they should be. What plans does he have to amend this subsidy regime?

We have today announced the latest consultation on the renewables obligation. That reduces by 10% the renewables obligation certificates available for onshore wind, reflecting the fact that there have been further technological improvements that mean that the costs of this technology are coming down. I realise that my hon. Friend has a long-standing interest in this, but I caution him, particularly given his experience in the European Parliament, to recognise that under the renewables target for 2020, which is EU law, we are committed to meeting 15% of our energy from renewable sources. Onshore wind turbines are one of the cheapest renewable sources, so the fewer onshore wind turbines we have, the more expensive renewable sources we need to have instead. That is a very important factor for him to bear in mind.

The Secretary of State will be aware that subsidy is not just for wind power but for other forms of carbon reduction, which are incredibly important to all our constituents, not just for their energy bills but for their personal efforts to reduce carbon consumption. What is the Secretary of State’s view of the report on the front page of today’s Financial Times, which suggests that he is completely pulling the rug from underneath thousands of people up and down this country who might have taken steps to invest in solar power for their own houses and who are now finding that their investment is being completely undermined by his decisions?

There is no question of anybody’s investment being undermined by any of our decisions, because this Government—in this respect, I think we are no different from previous Governments—are very committed to not having retrospection in legislation and legislative changes. However, we keep all our subsidies under review. I just told the hon. Member for Daventry (Chris Heaton-Harris) that we are cutting subsidies for onshore wind turbines by 10%, and that reflects what is going on in the real world. I recently visited a project run with the city council in Birmingham, where people were able to show me invoices from solar panel suppliers showing that they had managed to get a 33% reduction in the cost of solar panels in just one year. It is absolutely right that the Department goes on looking at the appropriate levels of subsidies to bring on these important technologies, and that is obviously what we will do.