Scotland seeks clarity

Scotland seeks clarity

Last week in Glasgow over two hundred representatives from the renewable energy industry met with Scottish Government ministers and officials to discuss the impact of the UK Government’s decision to end the Renewable Obligation subsidy for onshore wind early and how it will affect their businesses.

Speaking after the summit Scottish Energy Minister Fergus Ewing said “This decision by the UK Government can only be described as anti-business. The impacts could spread right across Scotland and the wider supply chain, including ports and harbours, transmission and distribution, consultancy, communities and the civil engineering sector.

“This morning’s event was attended by over 200 people from a wide range of businesses and organisations who are affected, which shows the strength of feeling throughout the industry.

“All of this is will come at great personal and economic cost to our businesses and people. I’ve heard from many successful businesses who are at the forefront of renewables technology who are now being forced to look at making redundancies as a result of these changes. I also heard from investors both in Scotland and abroad who are wanting to invest in this industry but these are currently being stalled because of the uncertainty this is causing.

“Delegates this morning spoke about the damage this will cause the rural economy – many of the shops and business that are vital to these communities.

“Over the next few weeks DECC will be seeking the views of those affected and I strongly encourage anyone with an interest to respond on this to ensure our concerns are heard.

“We will continue to make representations to both the UK Government’s Energy Department and to the Scotland Office, feeding back from what I heard at the summit and the many meetings I have had with representatives from the industry.”

Also speaking after the event Jenny Hogan, Director of Policy at Scottish Renewables, said: “The industry is urging the UK Government not to abandon the onshore wind sector in Scotland by pulling the rug from under it a year earlier than planned.

“Ending the Renewables Obligation one year early could have a devastating impact on onshore wind developers and supply chain across the country with around £3 billion of investment in Scotland being put at risk. We need UK ministers to urgently reconsider their position.

“The impact of this decision will be felt more harshly in Scotland because the biggest proportion of projects being developed in the UK are here.”

Shortly after the original announcement regarding the removal of the subsidy the Department of Energy and Climate Change informed the industry that there would be a grace period for projects that have already invested significant funds however no detailed information regarding this has since been forthcoming.

Ms Hogan added “The details around exactly how a company may receive a grace period also remains unclear. The lack of clarity is extremely damaging for investors but we hope to continue our talks with officials on how this will work in practice.”

In addition there is a further threat to the industry as the scheme introduced to replace the Renewable Obligation in the long term, the Contracts for Difference (CfD), is now also expected to be closed shortly with no new applications sought.

Regarding this replacement method Amber Rudd, Secretary of State for Energy and Climate Change, suggested that the CfD would be included in the Conservative government’s manifesto pledge to end new subsidies for onshore wind projects.

Commenting on the CfDs Jenny Hogan stated “We now believe onshore wind could also be under threat within the CfD framework, which would create even longer-term uncertainty for the industry.

“Onshore wind is already the lowest-cost form of renewable energy and plays a massive role in delivering on the UK Government’s legally binding renewable energy targets and cutting carbon emissions.

“After further discussion with our members we will be issuing a formal response to the Department of Energy and Climate Change on the early closure of the RO.”

We have discussed the UK government’s policy change and abolition of subsidies for onshore wind in great detail over the past few weeks. Our stance is widely known, we believe that renewable energy and in particular wind power has major role to play in our future energy mix.  To conclude therefore I would like to leave you with a quote from Dr. David Toke and Professor Peter Strachan from a recent article they wrote;

“There is much lamenting over the closure or mothballing of fossil fuel power plants, there are complaints about how subsidies are being “wasted” on wind farms and there are calls for more nuclear power in Scotland. Yet such talk ignores 21st century realities, including economic and practical considerations. Renewable energy must lie at the heart of our strategy to make energy in Scotland sustainable and secure.”

Dr. Toke and Professor Strachan’s article in full can be read here

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