Daily Archives: July 25, 2012

A row over wind subsidies has been raging in Whitehall for months and on Monday I brought you a leaked letter showing the outlines of a compromise put forward by George Osborne to energy secretary Ed Davey.

Today we had the official announcement of the compromise – which came after the intervention of Cameron and Clegg – and it includes one or two surprises; for example a new £500m tax break to boost offshore drilling in shallow water gas fields in the North Sea.

But the outlines are as we reported two days ago and again in this morning’s FT. Onshore wind subsidies (not offshore) will be cut by 10 per cent rather than the 25 per cent that chancellor Osborne had demanded.

Yet there has been no agreement over a 2030 “carbon goal” which the committee on climate change has called for to decarbonise the electricity industry.

Davey said today that the issue would be revisited later in the year; the Lib Dems believe that the carbon goal was “decoupled” from the wind subsidy issue. Read more