UK Wind Farms Threatened by Subsidy Budget

British energy company Scottish Power, owned by Spain's Iberdrola, said it might scale back the capacity of an offshore wind farm it plans to build off the English east coast because the government's subsidy budget is too low.

The East Anglia 1 offshore wind farm was originally planned to have an installed capacity of 1,200 megawatts (MW), which would have made it one of the biggest in the country, but Scottish Power said it may have to cut the number of turbines.

The British government supports the construction of green energy projects by paying subsidies to help cut climate-harming carbon emissions in its energy sector.

But the government has recently changed its subsidy regime to a mechanism which sets a minimum price for electricity sold from specific green energy projects.

Earlier this month, the government set its budget for supporting offshore wind and marine energy in 2014/15 using the new mechanism at 235 million pounds, 80 million of which are allocated to projects set to start operating from 2017/18 onwards.

"(The government's) smaller than expected annual ... budget pot for less-established technologies at 235 million pounds per year is likely to mean a smaller project," the company said in a statement.

Scottish Power said it was planning on making a financial investment decision for the East Anglia 1 project in early 2016.

The news comes on the same day as Scottish Power and Denmark's DONG Energy produce first full-scale electricity from their 389-MW West of Duddon Sands offshore wind farm, off the west coast of England, two months sooner than planned.