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Wind Power: Capital Investment

Energy and Climate Change written question – answered on 20th June 2012.

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Photo of Chris Heaton-Harris Chris Heaton-Harris Conservative, Daventry

To ask the Secretary of State for Energy and Climate Change what estimate he has made of the likely returns on onshore wind farm investment in each of the next five years.

Photo of Charles Hendry Charles Hendry The Minister of State, Department of Energy and Climate Change

The average rate of return required for investment in onshore wind farms, assumed in the analysis for the renewables obligation banding review, is 9.6%. The actual return on investment for individual wind farms will depend on many factors including their specific location, costs, the amount of and price received for the electricity they generate, and the level of subsidy.

Our assumption is based on Arup's report which can be found on our website at:

http://www.decc.gov.uk/assets/decc/11/consultation/ro-banding/3237-cons-ro-banding-arup-report.pdf and a report by Oxera for the Committee on Climate Change which can be found at:

http://hmccc.s3.amazonaws.com/Renewables%20Review/Oxera%20low%20carbon%20discount%20rates%20180411.pdf

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