Loophole in Government Wind Subsidies?
Posted on: 11/02/2015

A new report by the Institute for Public Policy Research (IPPR) has suggested that some UK renewable energy companies have been artificially capping the amount of producible power from their wind turbines in order to be eligible for government subsidies.

A loophole in the Government’s ‘feed-in’ renewable energy system has allowed some companies to take advantage and be paid for producing less power. Without intervention these actions could cost the bill-payer a further £400million over the life of the system.

The original purpose of the scheme was to encourage small-scale community wind farms by rewarding smaller turbines with higher payments per unit of energy. However an investigation by the IPPR think tank has shown that big companies can exploit this scheme by intentionally limiting the power they produce in order to be given the higher payment per unit by the government.

So far the IPPR has acknowledged that at least 103 turbines that exemplify the loophole in the system, with the owners of the renewable source earning an additional £100,000 in payments every year for each turbine. With an upcoming boom in British wind farms expected later this year, the IPPR have stated that if this problem is not addressed the country may become overrun with unnecessarily large, inefficient turbines coupled with a significant hole in their back pocket.

Report author Joss Garman said “This loophole is short-changing bill payers to the tune of millions of pounds a year. Ministers should act immediately to close down what is becoming a “feed-in-frenzy. It is distorting the energy market, lining the pockets of investors and undermining public confidence in Britain’s vital clean energy sector.”

A spokesman for the Department of Energy and Climate Change said: ‘We keep this issue under constant review to make sure consumers are getting the best possible deal, and an in-depth investigation is currently under way.’

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