Windfarms in General: Funding

I have heared claims, that windfarm developers receive generous governmant grants when building a new windfarm. However: Searching the web, I couldn't find any evidence for this!

From what I found out till now:

  • There do not seem to be any grants for the building of a windfarm
  • There are subsidies under the 'Renewables Obligation' available for the energy produced by the turbines. It works like this: The wind farm operator (in our case RES) produces energy and receives for this energy a 'Renewables Obligation Certificate'. This certificate they can sell to other energy producing companies who havn't fulfilled their obligation to produce a certain amount of energy from renewable sources.
    (click here to read more: Ofgem on Renewables Obligation)
  • Renewables Obligation Certificates currently (2007/08) sell for £34.30/MWh (BWEA on RO)
  • RES-Ltd state on their website, that generation costs of onshore wind power in the UK are around 3.2p/kWh, which would mean, that the 'Renewables Obligation' currently exceeds the generation costs.

I have been told, that the production costs stated on RES's website are given as whole life averages and do not include costs of development of new technologies and project development costs which can run into seven figure sums.

The value of a ROC is set annually and as with any market value increases with scarcity. Currently ROCs are high value due to the lack of renewable energy going into the system relative to the obligation. This is deliberate as the system is designed to support the costly development and installation of wind energy and other renewable technologies. So the ROC is designed not just to support the construction of a single generation station, but to also provide funds to allow companies to progress the very costly development of generation from wind and other renewable energy technologies.