Think-tank urges wind FiT reforms
IPPR says loophole could cost taxpayers £400m over lifetime of scheme
A think-tank is calling on Westminster to close a loophole in the medium wind sector that could cost taxpayers £400m over the lifetime of the feed-in tariff.
The Institute for Public Policy Research said the practice of under-reporting or 'de-rating' the capacity of turbines to tap the higher subsidy in the 100kW to 500kW range is undermining the sector’s competitiveness.
The IPPR suggests three steps to remedy the issue. The first is a change in standards so that a turbine's subsidy band is determined on the basis of rotor size rather than capacity.
An overall cap on how much a project can receive in subsidies, with incentives to ensure the ‘best fit’ turbine for each site, is also recommended along with a new subsidy band, to “help to smooth out the cliff-edge between the higher-paying, lower-capacity band and the lower-paying, higher-capacity band”.
The IPPR said a comparison of information on the make and model of installed turbines, received from DECC following a Freedom of Information request, with Ofgem data on recorded projects suggests that as of September 2014 almost half of the installed turbines qualifying in the band were de-rated.
The think-tank estimates that each de-rated turbine will earn £100,000 in 'excess subsidy' each year, or £2m over its 20-year lifespan.
The rating of a turbine is currently declared by the manufacturer and installer, resulting in a lack of external scrutiny of the system, the researchers added.
Image: the loophole could cost taxpayers in the UK £400m over FiT scheme's lifetime (sxc.hu)