The European Commission is to order Britain to end wind farm subsidies. Officials have told ministers that the current level of state support for renewable energy sources must be phased out by the end of the decade. Taxpayer support for solar energy must also be cut, the commission will say.
The commission, which oversees the European single market, is preparing to argue that the onshore wind and solar power industries are “mature” and should be allowed to operate without support from taxpayers. Under the single market rules, European Union governments are forbidden from providing long-term “state aid” to domestic industries that can function without support.
A Government source said European officials have privately warned ministers that they must reduce public support for onshore wind and solar generators.
“The commission has been making pretty clear that it’s moving towards saying that these industries are mature and state aid won’t be allowed,” he said.
Although Conservative ministers sometimes criticise the EC for its interference in domestic matters, they are understood to be keen to cooperate in the case of renewable energy subsidies.
“I never thought I’d say this but the commission is absolutely right about this,” a Conservative minister said.
“It’s absurd that taxpayers are being made to subsidise wind technology.”
The operators of onshore wind turbines get subsidies that increase the price they are paid for the power they generate.
Wholesale energy prices are typically about £55 for a megawatt hour of power. But onshore wind generators are paid about £90. Ministers have started reducing those subsidies, cutting tariffs applied to household bills and slashing guaranteed prices for onshore wind.
But pressure from the EC is expected force the Coalition to introduce a less generous system of support for onshore wind and solar power.