Plans to cut UK onshore wind subsidies defeated in House of Lords
The UK Government's plan to cut onshore wind subsidies from next year was defeated in the House of Lords, which backed a Labour motion to delete a clause in the Energy Bill that would close the Renewables Obligation subsidy scheme for new onshore wind farms in April 2016. The government has undermined its own argument, by stating the subsidy cuts would save each household money, however, an impact assessment showed homes would save only 30p per year. The Bill will return to the House of Commons, where the government is likely to reinsert the clause, however, it may have to insert concessions relating to the grace period conditions and planning permission so that it passes the House of Lords at the next reading. Although this is encouraging news for onshore wind developers in the UK, it will create more uncertainty for foreign investors who prefer secure and stable government policies when considering whether to invest in renewable energy projects. 

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The Government’s plan to end on-shore wind subsidies next year was in doubt after it was defeated in the House of Lords, in a move that could spark further hostilities between David Cameron and peers.

The Lords backed a Labour amendment deleting a clause in the Energy Bill that would have ended the renewables obligation in March 2016, a year earlier than planned.

Shadow energy minister Baroness Worthington had told peers that scrapping the subsidy would save no more than 30p to each household a year. Ecotricity, a leading renewable energy firm, has called for the Government to create a level playing field by also ending fossil fuel subsidies amid claims the sector will be devastated by the withdrawal of support.

It was unclear whether the Government would seek to reinsert the measure into the Bill, which would risk delaying the legislation.

Following the defeat, a Department for Energy and Climate Change spokesman said: “The Government is disappointed that a measure to deliver on our manifesto commitment to end new subsidies for on-shore wind has been removed from the Energy Bill.

“Our priority is providing clean, affordable and secure energy that hard-working families and businesses can rely on.”

Ahead of the vote, Conservative peer Lord Bourne warned his colleagues against voting down a measure that was a “clear manifesto commitment” by a democratically elected Government.

“If we really do wish to maintain the traditions of this House and the role we fulfil, we have to move very carefully in relation to the territory we are in,” he said.