SSE protests as it misses out on wind-farm subsidy

Robin Pagnamenta, Energy Editor
One of Britain’s biggest energy companies will miss out on renewable energy subsidies worth more than half a billion pounds because it placed an order to buy equipment for a huge offshore wind farm too early.
Ian Marchant, chief executive of Scottish and Southern Energy (SSE), told The Times that it was “unfair” that its £1.3 billion Greater Gabbard wind farm, off Suffolk, would be excluded from fresh incentives designed to kick-start stalled investment in the industry.
In the Budget, in April, Alistair Darling unveiled a 33 per cent boost in subsidies available for offshore wind energy. Developers will gain from the extra £525 million in incentives over 20 years, but projects qualify only if turbine orders were placed between April 2009 and March 2010.
SSE’s competitors, including Centrica, the owner of British Gas, and the German groups RWE and E.ON, had all lobbied for the increase and will now all qualify for their own projects. However, the Greater Gabbard scheme will miss out because SSE ordered turbines and other equipment a few months before the announcement.
Mr Marchant is pressing the Government to alter the scheme, which he said left the SSE project’s economics at a permanent disadvantage. “We are not convinced that this is right,” he said.
Nick Hyslop, of RBC Capital Markets, said that SSE was effectively penalised because it had made a commitment to offshore wind, an emerging technology, too early. “This does not seem to be a very level playing field,” he said. “It ... disadvantages those who have already made a commitment.”
The Greater Gabbard wind farm is 23 kilometres (14 miles) off Suffolk. It will include 140 Siemens turbines generating 500 megawatts of electricity — enough, when the wind blows, to power a city of half a million people.
The Department of Energy and Climate Change said that the Government was still consulting on the exact terms of the programme. A spokesman said: “Based on the evidence we have, we consider that where contracts were signed before the Budget announcement, this was on the basis that projects were commercially viable.”