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Onshore Wind

Volume 605: debated on Thursday 11 February 2016

5. When her Department plans to publish proposals on delivering a subsidy-free contract for difference mechanism for onshore wind. (903588)

Our priorities are to decarbonise at the lowest price while always ensuring our energy security. That is why we have taken steps to end new subsidies for onshore wind. It was interesting, after my right hon. Friend’s announcement, to hear companies almost immediately seeking a subsidy-free contract for difference, which suggests that our analysis that this industry can stand on its own two feet was correct. We are calling it a market-stabilising CfD and we are listening carefully to industry on how it can be delivered.

The early closure of the renewables obligation has severely damaged investor confidence in onshore wind, which is a vital part of the fragile economy of my Argyll and Bute constituency. The Government desperately need to restore that confidence quickly. The Minister could make a start today by announcing a date for the introduction of subsidy-free CfD. Why will she not get on and do exactly that?

As I said to the hon. Gentleman, we are looking at it. It is not something that we would introduce just on the back of a fag packet; it requires careful consultation and consideration. He will appreciate, alongside all the other priorities, that a subsidy-free CfD is not cost-free or risk-free to the bill consumer, and we are absolutely determined to ensure that we keep the costs down for consumers in his constituency as well as right across the UK.

Does my hon. Friend recognise, when she comes to introduce a subsidy-free contract for difference, that it will be subsidy free only if the price reflects the value of the electricity, and the value of the electricity depends on the time that it is produced, where it is produced and how reliably it is produced? Therefore, variable renewable electricity is worth much less than regular supplies from ordinary power stations.

My right hon. Friend points out exactly correctly that there are limitations to intermittent renewables technologies, and that there are costs associated with ensuring energy security when we become over-reliant on renewables. That is an absolute case in point. On the subsidy-free CfD, he is also right that we must take into account all the various costs. We are looking at the matter very closely. I am not making any promises here, but, alongside other subsidies and other CfDs, we are looking carefully at the proposition.

May I follow the previous comments by suggesting that we introduce subsidy-free CfDs as quickly as possible? The most important thing that was needed in relation to onshore wind was to make sure that local communities did not have it imposed on them. The Government have rightly done that. What can the Minister do to ensure that where communities do want it, we get as much onshore wind as we can at the lowest possible price?

I completely agree. The important thing was to give local communities the final say. I agree also that where local communities want more onshore wind, that should be supported. Nevertheless, as I said, even what we are calling a market-stabilising CfD would not be without risk or cost to the consumer, and our priority is to keep bills down for all energy consumers.