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News Release

London

Jones Lang LaSalle’s Renewable Energy Capital team comment on today’s strike price proposals for onshore wind and solar


London, 4th December, 2013 -  The UK government has revealed in its National Infrastructure Plan published today that it will cut subsidies for onshore wind and solar power but increase support for offshore wind.

Under the new contracts for difference (CfD) scheme, suggested strike prices for onshore wind are being cut by £5 per megawatt hour from 2015-16  to assist with a £5 increase for offshore wind starting in 2018-19. Meanwhile, solar is also being cut from £125 in 2015-16 to £100 by 2018-19.
 
Commenting on the changes, Dane Wilkins, Regional Director in Jones Lang LaSalle’s Renewable Energy Capital team, said: “This revision of the draft strike prices for onshore wind and solar remains politically sensitive but these latest reductions will significantly affect future prospects for both the onshore wind and solar development industries especially once the Renewables Obligation (“RO”) support mechanism is withdrawn in 2017.
 
“Overall these reductions to onshore wind and solar strike prices will further drive developers to ensure their projects are commissioned under the RO. It is also likely there will be a reduction in investment in development assets up for commissioning in 2018 in the absence of significant further capital cost reductions.  Furthermore it will not improve confidence that tariff setting is driven by underlying economics and the achievement of targets rather than political wrangling.”