Written Ministerial Statement by The Rt Hon Edward Davey Mp: Secretary Of State For Energy And Climate Change on onshore wind.
Today we are publishing the Government’s response to the onshore wind call for evidence, which ran for 8 weeks between 20 September and 15 November 2012. The call for evidence was issued in two parts.
Part A covered community engagement and benefits, and looked at ways that communities can have more say over, and receive greater benefit from, hosting onshore wind farms in their area. It considered a range of issues, including how windfarm developers consult with local communities about their plans, new ways of ensuring a sense of local ownership , how local economic content can be built up, and whether there are innovative ways of benefiting local energy consumers for example through offsetting electricity bill costs. Part B examined the latest information on the costs of onshore wind in the UK to ensure that the support levels of the technology received through the Renewables Obligation are no higher than necessary.
We received over 1,100 responses and substantial new evidence from a wide range of stakeholders.
Appropriately sited onshore wind, as one of the most cost effective and proven renewable energy technologies, has an important part to play in a responsible and balanced UK energy policy. It is low carbon and brings new growth, investment and jobs to the UK economy. It reduces our reliance on imported fossil-fuels and helps keep the lights on and our energy bills down. The UK has some of the best wind resources in Europe, and the Government is determined that the UK will retain its reputation as one of the best places to invest in wind energy and renewables more generally. We have also legally committed to ensure that 15 per cent of our energy will come from renewable sources by 2020.
Over 10GWh of renewable electricity was generated from onshore wind in 2011 which is enough to meet the average electricity consumption need of almost 2.5 million households. In addition since 2010 DECC has recorded announced investments in onshore wind energy totalling over £3.4billion, with the potential to support around 5,400 jobs.
Community engagement and benefits
It is important that onshore wind is developed in a way that is sustainable –economically, environmentally and socially. Although, research shows that around two-thirds of people in the UK support onshore wind, we recognise that many people have real concerns about the siting of onshore turbines in their communities and how they are involved in this process. The measures set out in the first part of the response, together with those being announced in parallel today by my Rt Hon Friend the Secretary of State for Communities and Local Government, mean communities will have greater say over proposed onshore wind development in their area, and can gain increased benefits from hosting developments that do proceed.
A stronger role for communities
DCLG will introduce changes to the law in England to require onshore wind developers to consult local communities first - before they submit a planning application. This tougher regime will give local people the opportunity to influence proposals at a much earlier stage in the planning process.
DCLG will also issue new and streamlined planning practice guidance, following Lord Taylor’s Review, to ensure that planning decisions get the environmental balance right, in line with the National Planning Policy Framework and, as expected by the Framework, any adverse impact from a wind farm development is addressed satisfactorily.
We will issue best practice guidance to onshore wind developers will lay down higher standards expected in relation to their engagement with communities, and a new register will monitor best practice. At the same time we will assist local communities to gain the skills they need to enable them to engage more confidently with developers.
These actions complement the policy changes that the coalition Government has already put in place through its localism agenda and the recent reforms to planning, which put communities at the heart of decision making.
Investing in communities – benefits, ownership and improving local economic impacts
Communities hosting renewable energy installations play a key role in meeting the national need for secure, clean energy. It is only right that local people should be recognised and rewarded for that contribution. This new package of measures on community benefits will ensure that communities receive a fairer share of benefits associated with onshore wind and are properly empowered to negotiate with developers the type of benefit package that best suits their local needs.
Although many onshore wind developers already offer community benefit packages on a voluntary basis, we challenged them to do more. In response therefore we expect the onshore wind industry to revise its Community Benefit Protocol, including an increase in the recommended community benefit package in England from £ 1,000/MW of installed capacity per year, to £5,000/MW/year for the lifetime of the windfarm (usually around 25 years). To complement this we will be producing guidance and setting up a register of community benefits– so that local communities are properly empowered to discuss and negotiate the types of benefit packages that best suit their needs.
We will also be exploring ways to make it more attractive for communities to invest in wind projects themselves, through the recently issued call for evidence on community energy. A joint DECC/Defra £15 million rural community renewable energy fund will also provide loans and grants to rural communities for initial development and planning work.
We will be working with industry and other stakeholders to ensure that the local economic and employment potential of onshore wind projects are maximised. We will also produce supply chain guidance so that all parties – developers, local business and local people are equipped to respond to these opportunities The package of measures that DECC, DCLG and the onshore wind industry is announcing today provide a rigorous framework that will bring about real change and introduce more understanding, fairness, trust and mutual benefit between communities and the onshore wind sector.
We will be working across Government over the next 12 months to deliver this change.
We are committed to ensuring that support levels represent good value for money to the taxpayer and that they reflect the true costs of the deploying the technologies. As the costs of deployment fall so will any support.
We have already reduced the support level for onshore wind under the Renewables Obligation from April 2013 by 10% (from 1 ROC/MWh to 0.9 ROC/MWh to reflect changes in costs). We carried out the second part of the call for evidence to check that this reduced support rate remained appropriate.
A large amount of new cost data has been rigorously analysed by economists and engineers within the Department.
The latest evidence shows that costs remain within the bands set out in the Renewables Obligation Banding Review. The mid-point estimates have, however, increased slightly, due to higher costs of planning, and operation and maintenance contracts. The change in the midpoint estimate of costs is less than 5% and thus within the original range.
As this evidence does not show a significant change in costs, it does not meet the legislative requirements for a further review of RO support levels. This decision ensures on-going value for money for the consumer and provides more certainty for developers, ensuring continuity of support as Contracts for Difference are introduced as part of our Electricity Market Reforms. DECC will of course continue to monitor the costs of renewable energy technologies, in accordance with the provisions in Article 33 of the Renewables Obligation Order 2009.
The measures that make up our response to the Call for Evidence will allow the deployment of onshore wind to the level necessary for our energy security and renewable energy goals, but will also ensure that communities will have a greater say over proposed onshore wind development and will receive more reward for hosting those developments that are taken forward. This is an important sector that is driving economic growth and I am determined that local communities should share in these benefits.