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UK's Renewable Energy Strategy in confusion.

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alt The Government's ambition for Britain to become a global leader in renewable energy suffered a major setback last night when Iberdrola Renewables, the world’s biggest investor in wind power announced that it was slashing its british investment programme.

Xabier Viteri, chief of Iberdrola Renewables, whose Spanish parent owns ScottishPower, blamed the economic crisis for the move but added that problems in Britain could force his company to consider investing elsewhere.The announcement comes less than two months after ministers backed a string of huge gas-fired power stations, prompting concern that the Government cannot fulfil its promise of a green energy revolution.

Last week Shell stopped building wind and solar power stations worldwide. Pelamis, a leading wave power pioneer, has owned up to technical as well as financial problems. And since last November BP has cutting back on its commitments to wind and other renewables schemes, including a £3 billion project for 341 turbines in the Thames Estuary, and questions have been raised over the future of npower’s £2.2 billion Gwint y Mor farm off the Welsh coast.

Iberdrola Renewables’ decision to cut its investment in Britain by more than 40%, or £300 million — enough to build a wind farm powering 200,000 homes — is the latest obstacle to Gordon Brown’s target of generating 35 % of the country’s electricity from renewable sources by 2020. Lifting it to that level from the current 5% would cost an estimated £100 billion. But wind energy investments have collapsed as funding dries up in the credit crunch and the price of oil, gas and coal has fallen. Delays obtaining access to the national grid and planning permission have compounded the industry’s woes.

“We are way off the pace,” Jonathon Porritt, the head of the Sustainable Development Commission, said. “The UK has talked about this for years, but the Government now has very little time to get this together. People just do not consider the UK to be a good place to invest in renewables.” Duncan Ayling, of the British Wind Energy Association, said: “We need strategic leadership from the highest levels . . . We are only going to do this if the Government is brave enough to tackle these problems head on.” He called for the formation of a Cabinet-level sub-committee to lead the industry’s development.

Despite Gordon Brown’s ambitious talk of a renewables revolution, progress has been slow in Britain, which remains a relative backwater in terms of renewable energy investment.

Iberdrola now operates 9 gigawatts of renewable energy worldwide. Most of its projects are in Spain and America where subsidies, ample land and lax planning systems make investing in large-scale wind projects commercially attractive. On some days Spain generates 30% of its electricity from wind. In Britain financing problems have been amplified by a series of domestic troubles that have led to delays — in particular securing planning permission and access to grid connections.

The Government’s solution has been to place greater emphasis on offshore wind projects. However, these are much more expensive to build and the technology is relatively unproven on a commercial scale.

The Crown Estate, which owns Britain’s seabed, has opened up its waters to the development of huge wind projects but there are doubts about how many of these will be built without fresh subsidies.

The Government remains hesitant to pass draconian legislation that risks forcing up consumers’ energy bills. The outlay to build renewable energy schemes is far higher than dirtier coal or gas-fired power stations.

A spokesman for the Department for Energy and Climate Change said: “We take very seriously the concerns that some developers have had for some wind developments and we are looking to see if there is any further action that we could take in response.”

The latest announcement will come as an embarrassment to Ed Miliband, the Energy Secretary, who this week described opposition to wind farms as “socially unacceptable . . . like not wearing your seatbelt or driving past a zebra crossing”.


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