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'Fund Renewable Subsidies Through Taxation'

Monday, September 11, 2017

Every single one of the 27 million households in Britain has already had to fork out to wind farmers for not producing any electricity and that may be just the tip of the iceberg says GMB from the TUC in Brighton. 

GMB, the energy workers' union, is calling for subsidies on renewable energy to paid for through general taxation alongside an investigation into a bonkers wind power ‘rip off racket’ centred in Scotland.

It follows revelations that since 2010, energy bill payers have paid £328m to wind farm owners for not generating any energy - most of them in Scotland [1].

Meanwhile the Office for Budgetary Responsibility (OBR) predicts that the surcharge the UK's 27m households already pay is set to as much as treble over the next 4 to 5 years to £10 per week.

This call comes in advance of the results of the CfD auction being announced. 

GMB will make a separate statement on this.

The average wind farm receives roughly half of its income from the electricity wholesale price and half from subsidy via the Renewables Obligation Certificate (ROC) – the cost of which is passed on to consumers through their energy bills.

When the energy grid reaches capacity, National Grid stops wind farms from generating, in order to prevent damage to the overhead wires and potential major system disruption.

When this happens, the wind farm owners retain their wholesale income – but lose their ROC payments subsidy, which are issued only for the electricity that is actually sold to consumers. [2]

The wind farm owners then request government compensation for their lost ROC's revenue through a wonderfully vague “constraint payment” – and many will ask for more compensation than they are losing in income.

Work by John Constable, of the Renewable Energy Foundation, has discovered that the average compensation being paid was nearly four times the amount of the lost income.

One wind farm, Crystal Rig, was asking for (and receiving) £991 per mega watt hour of electricity in compensation when it was losing about £50 per mega watt hour [3].

Environmental levies on consumer bills are set to treble from £4.6 billion to £13.5 billion between 2015/16 and 2021/2 according to the Office for Budget Responsibility [4].

Justin Bowden, GMB National Secretary for Energy in Brighton, said:

“With the green subsidies on everyone's bills set to treble within 5 years to £10 per week, GMB is calling for this to be paid for through general taxation along with an urgent investigation into the wind power rip off racket that is lining the pockets of big companies at the expense of every single energy bill payer and household in the country.

"Electricity is a natural monopoly and in this case the public are being milked by paying twice over - through spiralling consumer energy bills and taxpayer hand outs.

"Every single one of the 27 million households in Britain has already had to fork out to wind farmers for not producing any electricity, and that may be just the tip of the iceberg.

"By any measure this is a bonkers wind power rip off racket which damages the case for renewables and leaves government with some explaining to do.

"The Renewables Obligation Certificate system rewards and punishes the wrong people and appears unfit for purpose.

"Where energy subsidies of any sort can be shown to be justified and in the public interest, then GMB says they should be be paid for out of basic taxation - a much fairer and more progressive way."


Contact: Justin Bowden on 07710 631351 or GMB Press Office on 07958 156846 or at


[1] ‘Wind farms that lie idle and get millions’ (Times, 13 August 2017)

[2] The 750 wind farms in Scotland - with a combined total of 3,000 wind turbines – have a total generation capacity of 5.7 GW

[3] The Scottish wind-power racket (Capx, 10 August 2017) John Constable and Matt Ridley

[4] Economic and Fiscal Outlook Office for Budget Responsibility (OBR), page 104, Environmental Levies, March 2017 ?

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