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Subsidies for offshore wind farms may end soon, company secretary admits

Government subsidies to the offshore wind sector could soon end if the sector can sustain itself, said company secretary Kwasi Kwarteng.

In an interview with the Telegraph on Sunday, he praised the domestic offshore wind sector, noting that the UK currently carries about 35 percent of its global capacity.

But despite calls from the industry to continue the subsidies, Kwarteng told the newspaper: “I understand that the point where we no longer need to continue to subsidize is almost here.”

Last July, a group of researchers suggested that grants could soon turn “negative,” with wind farms actually repaying money to the government under the terms of its differential settlement contract. However, the UK has also been criticized for failing to fund measures to meet its climate change commitments, tightening the timetable if it wants to become a zero-carbon country by 2050.

Kwarteng said he did not expect higher taxes to be introduced to help fund the transition to net zero, claiming they would discourage economic activity and job creation.

The interview covered other aspects of the UK’s climate effort, such as the move to install heat pumps in some areas as a replacement for gas boilers: “I don’t think heat pumps are really much worse than boilers. I’m just saying they could be improved with more investment,” Kwarteng explained

The cabinet’s climate strategy points to increased investment and subsidy for the use of hydrogen as a carbon-free fuel.

But Kwarteng denied that it would be “writing checks” for the sector and instead focus its efforts on attracting private investment. “It will not work without substantial private sector investment,” he added.

Hydrogen is a potentially carbon-free fuel source that only produces heat and water when burned or used in fuel cells. But globally, most of it is currently made by splitting natural gas in a process that was more carbon-intensive than gas and coal, according to a recent study.