Winds of change for the UK’s renewable industry?

The gale-force winds, which struck many parts of the UK this week must have been an appropriate reminder to Chancellor George Osborne of the power of this natural resource as he headed towards the House of Commons to deliver his Autumn Statement on Thursday.

In front of his fellow MPs in Westminster, Mr Osborne referenced the updated National Infrastructure Plan (NIP), launched on Wednesday, which stated that Government subsidies for onshore wind and solar energy were to be reduced, while those for offshore wind were to be increased by 2015.

The announcement had already whipped up a considerable storm even before Mr Osborne’s appearance yesterday, from those who claimed the decision was a political one, based on the visual impact of onshore windfarms. Others suggested it showed a lack of consistency in the Government’s renewable energy policy, which may have a negative impact on investment.

But the Government believes that onshore wind and solar power have had their fair share of state support and that the one technology which has the potential to deliver energy on a greater scale – offshore wind – now deserves more backing.

The Chancellor’s Autumn Statement came on the same day that Aberdeen Renewable Energy Group and Vattenfall announced that the generation of power from the 11-turbine European Offshore Wind Deployment Centre had been put back by two years to 2017 following the acceptance of an offer from the system’s operator, the National Grid. It would be interesting to know, in light of details from the updated NIP and a new commitment to offshore wind, whether there would be an opportunity to move that date forward?

Mr Osborne hinted at where the Government’s interest on energy provision may really lie, when he announced a new tax allowance to encourage investment in shale gas. The allowance would halve tax rates on early profits and follows the Government’s public backing of the shale gas industry earlier this year.

In announcing the tax break, Mr Osborne said: “We are prepared to push the boundaries of scientific endeavour, including in controversial areas, because Britain has always been a pioneer.

“The country that was the first to extract oil and gas from deep under the sea should not turn its back on new sources of energy like shale gas because it’s all too difficult. “

Whilst clearly not turning its back on renewables, the Government has stated its commitment to energy programmes that can (and indeed, must) deliver viable large-scale supplies to ensure the UK can keep the lights – and radiators – on when we need it most.