Officials from Britain’s wind industry are terrified their subsidies and tax incentives will end because of the U.K.’s decision to leave the European Union, according to a report by Reuters published Friday.
The report found that British wind companies, particularly ones that specialize in offshore wind power, are worried that Brexit places the government subsidies and easy access to financing at risk. The industry is deeply dependent on these subsidies to make projects more economically viable. Britain’s political uncertainty following the pending resignation of Prime Minister David Cameron means cuts to subsidies are likely. The Brexit could also make it much harder for wind companies to get loans from European banks, which could significantly slow the expansion of wind power.
Britain’s ruling Conservative Party has already said that it plans to cut wind subsidies to reduce consumers’ energy bills, which were roughly 54 percent higher than American energy bills in 2014, while energy taxes cost residents roughly $6.6 billion every year.
Experts say Britain’s dependence on wind and solar power could lead to massive blackouts this winter despite the cuts. To comply with European Union mandates, Britain planned to to shut down 1.5 gigawatts of conventional electrical capacity and replace it with unreliable wind or solar power.
The high cost of green energy subsidies and heavy taxes on carbon dioxide (CO2) emissions, which are responsible for the pricey power, has caused British industry and consumer groups to leave the country or heavily lobby for relief.
Britain’s government was already forced to take emergency measures to keep the lights on and official government analysis suggests the country could have insufficient electricity on a windless or cloudy days to meet demand. The resulting brownouts and blackouts have already impacted the U.K.
Britain’s attempts to use wind or solar power have been immensely costly. U.K. residents paid a whopping 54 percent more for electricity than Americans in 2014, while energy taxes cost residents roughly $6.6 billion every year. Green energy subsidies in the U.K regularly exceed spending caps and account for roughly 7 percent of British energy bills, according to the U.K.’s Office of Gas and Electricity Markets.
Polling indicates that 38 percent of British households are cutting back essential purchases, like food, to pay for high energy bills. Another 59 percent of homes are worried about how they are going to pay energy bills. Companies are getting hit by pricey British electricity as well, and some are even leaving the country because of it, threatening up to 40,000 jobs.
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