A subsidy rate for wind turbine owners could see them pocketing up to seven times more than the amount of power they produce, in what has been branded a ‘license to print money’
The Daily Mail can reveal the eyewatering fiasco in the week Boris Johnson declared that wind power was the future for the nation’s energy generation.
The scheme was set up to encourage homeowners to install a small windmill to supply their needs and feed into the electricity grid.
Owners are guaranteed bonanza pots of cash for 20 years, and the scheme is so lucrative, it has triggered a gold rush among investors, including leading pension funds.
The farcical initiative was set up in Northern Ireland, but the breathtaking costs will be felt in every corner of the UK thanks to higher ‘green levies’ on household and business utility bills.
It dwarfs the £500million wasted by an earlier botched green energy scandal in the province, dubbed ‘Cash for Ash’ which led to the fall of the Stormont Government three years ago.
A Mail investigation has found:
* One turbine reaps about £375,000 a year, yet produces electricity worth just £51,000;
* The bumper subsidy is available only in Ulster but adds £71 million a year to energy bills across the UK;
* As the subsidy is guaranteed for 20 years, the overall cost to UK consumers will be an estimated £1.4 billion;
* Incompetent officials tried to shut the scheme in 2016 –
but loopholes let it run until March 2019;
* In a stampede to erect turbines before the deadline, hundreds were put up, many owned by venture capitalists and even the Royal Bank of Scotland’s pension fund.
On Tuesday, the Prime Minister made a dramatic pledge to power every home by wind by 2030.
Mr. Johnson told the Conservative conference he would work at ‘gale-force speed’ to usher in his ‘green industrial revolution’.
But the Mail’s investigation uncovers how an existing wind scheme is being abused at a vast cost to consumers.
It was set up to incentivize landowners to erect small wind turbines. They would receive fees for ‘clean’ power fed into the electricity grid. Even David Cameron erected one in his back garden.
Ministers called it a ‘clean energy cashback’. To fund it, they introduced a ‘green levy’.
This so-called ‘renewables obligation’ adds about £73 a year to a typical household electricity bill.
After 2009, these incentives were recognized as being too generous and were dramatically cut down in England, Wales, and Scotland.
But Northern Ireland officials inexplicably kept the rate sky-high – sparking a rush among wealthy investors to install clapped-out turbines and claim practically risk-free handouts.
Last night green energy expert Dr. John Constable said: ‘Someone made a mistake: simple as that. Clever business people see these mistakes. There was a total stampede. Some people must be getting fabulously rich.
‘I watched the PM’s speech and thought, “here we go again”.’
The data on which the calculations are made is available on the website of energy regulator Ofcom.
On a desolate hilltop south of Londonderry, the Mail found the wind turbine likely to be the biggest money-spinner of its type in the UK.
Named ‘SP2045’, its blades revolved enough in the brisk Ulster breeze last year to generate about £51,000 of electricity.
But this particular machine is worth a further £324,000 more in green subsidies. In total, SP2045 reaped £375,000 in 2019 – more than seven times the market value of the electricity it actually produced.
Public records show SP2045 belongs to a company named Simple Power No1 Ltd. Its ultimate owner?
Using Companies House files, we traced it back to the Royal Bank of Scotland’s pension fund.
In fact, there are hundreds of second-hand turbines dotted over the rolling hills of Northern Ireland that are owned by blue-chip firms.
City financiers, it seems, spotted the potential for bountiful returns – and especially so after civil servants set the subsidy rate for small wind farms at a bafflingly generous rate.
For spurious reasons, the owners of small wind turbines – defined as those with a peak output of 250 kilowatts – in Northern Ireland are entitled to a handout worth about £220 for every megawatt of power they produce per hour.
Elsewhere in the UK, the figure changes every year but was £16 last year. And that is on top of selling the actual electricity at market price.
The wholesale price of electricity fluctuates but has averaged about £35 per megawatt-hour over the past year.
So the owner receives £35 for the electricity plus £220 in subsidy, totaling £255 – more than seven times the market value of the power itself.
The same does not apply to windmill owners anywhere else in the UK. Nor does it apply to larger turbines.
Dr. Constable, director of the Renewable Energy Foundation, said:
‘The civil service error created a license to print money. These small 250kW turbines have been obsolete for years and nobody would have built them at the time, except as a loophole cash cow. They’re a terrible value for public subsidy, but an absolute goldmine for investors.’
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