offshore windfarm

Subsidies for offshore wind farms could soon end, business secretary admits

Government subsidies for the offshore wind sector could soon be coming to an end as the sector can sustain itself, business secretary Kwasi Kwarteng has said.

In an interview with the Telegraph on Sunday, he praised the domestic offshore wind sector, noting that the UK currently bears around 35 per cent of its global capacity.

But despite calls from the sector to continue the subsidies, Kwarteng told the paper: “My understanding is that the point at which we no longer need to keep subsidising it has almost arrived.”

In July last year, a group of researchers suggested that subsidies could soon go “negative” where wind farms would actually pay money back to the government under the terms of its contract for difference scheme. However, the UK has also been criticised for failing to fund measures to meet its climate change obligations, with the timetable getting tighter if it wants to become a net zero carbon country by 2050.

Kwarteng said he did not anticipate higher taxes being introduced to help fund the move to net zero, claiming they would disincentivise economic activity and job creation.

The interview covered other aspects of the UK’s climate efforts such as a move to install heat pumps in some areas as a replacement for gas boilers: “I don’t think actually heat pumps are that much worse than boilers. All I’m saying is that they could be improved if there was more investment,” Kwarteng explained

The government’s climate strategy points towards greater investment and subsidy into using hydrogen as a zero-carbon fuel.

But Kwarteng denied it would be “writing cheques” for the sector and would focus its efforts on attracting private investment instead. “It doesn’t work without substantial investment from the private sector,” he added.

Hydrogen is a potentially zero-carbon fuel source that produces just heat and water when burned or used in fuel cells. But globally, the majority is currently made by splitting natural gas in a process that one recent study found was more carbon-intensive than gas and coal.

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