U.K. Solar, Wind Industries Face Reduced Subsidies

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July 28 (Bloomberg) -- Ilesh Patel, partner at Baringa, talks with Guy Johnson about how a reduction in subsidies from the U.K. government will impact solar and wind industries. He speaks on “The Pulse.”

My question is simple.

The industry is got to respond.

It is going to focus on cost reduction.

That is important to consumers.

It has to focus on how the money will be spent in the best possible way.

I think the first point is we are going to do solar and wind over the next four or five years.

It is going to be an intense competition.

It is not great when you consider that 16 gigawatts.

There is a small amount of money for projects.

How far away is solar for being competitive without subsidies versus fossil fuels?

Two or three years and that depends on the certainty of trying to trade with the competition between developers around the world.

It depends and when the costs come down.

Two or three years is probably a reasonable timeframe.

The question is will the government allow large-scale renewables in that sort of way.

In terms of looking at it from a subsidy point of view that is a portion of this industry that is getting very close to parity.

What i am hearing is it does not need the subsidies we are talking about.

In the short-term it still needs that kickstart.

It needs something that is going to get industrialized scale so we can get those cost reductions coming through to the u.k.. it is offshore wind is going to feel the pain.

That does not go very far at all.

We have 20 or 30 projects that are fighting over that.

If we're going to find -- fund one of those, that is huge.

Do these things get shelled?

Is well-intentioned.

What they have ended up doing is giving a little bit of money to everybody but not giving enough to anybody to make a difference.

I think that pick and mix approach is that -- great for emerging technology but not for established technologies that can make a difference.

One final question.

How many of those projects survive?

We think for the offshore sites only the best wills are five.

That means five or six projects out of 20 or 30. they will hope for cost reductions.

Without that support they might not be able to achieve that.

Thank you very much for chemical see us.

It we're going to take a break.

For our viewers we have a second hour of "the pulse" coming up.

We are going to get his take on the ruling this morning.

International pressure is mounting on israel.

The bank has a direct stake in the story.

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This text has been automatically generated. It may not be 100% accurate.

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