Renewable energy in the UK post-referendum

Trade body Scottish Renewables this week warned that renewable energy generation in Scotland may be under threat due to Brexit repercussions.  Chief Executive Niall Stuart speaking at a conference hosted by Scottish Renewables said that Westminster must not get in the way of progress the industry has made over recent years and the process of leaving the EU begins.

Also, Mr. Stuart asked for clarity for the sector which has been reeling since the UK government started to cut subsidies for renewable energy in 2015 which experts have predicted could see a loss of £3 billion of investment and a loss of over 5,000 jobs.

“The many questions thrown up by Brexit just add to the huge uncertainty that was already surrounding Scotland’s renewable energy sector following numerous changes to support by the Westminster government over the last 12 months,” Mr Stuart said.

“Confidence amongst most of our members is incredibly fragile right now, and we need clear leadership at Westminster and Holyrood if we are to deliver further growth, to protect the many thousands of jobs supported by the industry, and to deliver the change in our energy sector that the people of Scotland want to see.”

Also speaking at the conference Renewable UK Chief Executive and Scottish Renewables director Hugh McNeal stated that Brexit could actually prove to be advantageous to the industry.

“It is tempting in these unprecedented times, in the period of uncertainty and market volatility since the vote, to focus only on the challenges ahead. The fears are very real. The stakes very high, in terms of investment, jobs and consumer bills if we lose access to the European Energy Market.

“It is precisely now, at this moment which is so unpredictable and uncertain, that I believe we should reflect on what we can offer; cheap, home-grown electricity able to deliver hundreds of millions of pounds of capital investment for our economy over the next few years, helping companies all over Britain just at a time when we need it most.”

He added that currently there are a number of onshore wind projects that are “ready to build now, ready to be financed; projects that can generate economic activity and capital investment, projects it makes sense to build given the benefits they will bring and the challenges we now face”.

Due to the government’s ending and reduction of the Renewables Obligation and Feed-in Tariff respectively plus ongoing uncertainty over whether onshore wind will be able to access price support contracts offered to offshore wind projects new developments are struggling to find a route to the market the is cost effective.

Recent speculation that projects may be developed without subsidies or with a new price structure developed to ensure that inshore wind can offer new generation capacity at cost fully competitive with new subsidised gas plants has yet to become tangible.

McNeal added “it is vital the sector now works to build a broad coalition, one that reaches out across industry, across all political parties, to help deliver a route to market for the industry.”

It is only natural to speculate what potential positive and negative impact the UK’s break from the EU will have on the country’s renewable energy industry but the truth is we do not know. However the uncertainty that this brings will have a negative effect at least in the short term.

There is a belief among a number of industry movers that after the UK leaves the EU with no legally binding carbon emission targets to achieve the renewables industry will be cast aside as cheaper and unfortunately dirtier alternatives are sought. However as we have demonstrated previously these options only tend to be cheaper in the short term and the lasting environmental consequences do not make up for any short term financial gain.

The most recent evidence we have of the government’s future direction however is positive as last week they committed to a bold new carbon emissions target with DECC confirming that Ministers have approved the recommendations for the fifth carbon budget put forward by the independent Committee on Climate Change (CCC),  with the official statement reading “The Government has agreed with the Committee on Climate Change and proposes that the fifth budgetary period covering 2028 to 2032 should be set at 1,725 MtCO2e.”

Therefore the situation at present although not perfect does show promise. Our hope is that it can be built upon and that renewable energy will continue to feature high in our energy mix.

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