Scottish Energy Minister warns renewable energy investors could abandon UK

The decision by the UK government to end subsidies for onshore wind a year early is “wrong, ill-advised and irrational” said Fergus Ewing, MSP, warning that investors could leave the UK for other countries.
Scottish Energy Minister warns renewable energy investors could abandon UK

The decision by the Department of Energy and Climate Change (DECC) to close the Renewables Obligation (RO) for onshore wind from April 2016 has been met with an angry outcry by the Scottish wind energy industry which claimed that it could put at risk £3 billion investment in the country. The Scottish Energy Minister, Fergus Ewing, has met with the Inverness Chamber of Commerce and industry representatives including Energy North, Falck Renewables, RES and E.On to listen to their concerns about the impact on both developers and the supply chain. After the meeting, Mr Ewing warned that the decision taken by the UK government will have a negative impact on the renewables industry in Scotland and potentially on the thousands of people who work in it.

Mr Ewing added that the industry has been working hard to drive down costs over recent years and make onshore wind one of the most cost effective renewable energy technologies. The decision by the UK government puts this hard work and progress made in jeopardy. Mr Ewing further warned that it could put the ability of Scotland to meet its targets on renewable energy and climate change in doubt.

“I think it will be very challenging to meet the 2020 target of renewables of delivering 100 percent green energy” said Mr Ewing, speaking on The Sunday Politics (Scotland). “I think it will be too difficult, and that is absolutely disappointing. The Tory Manifesto said it was going to stop new subsidies for onshore wind but they said nothing about the existing subsidy regime.”

Mr Ewing added that nothing has been mentioned so far about what the UK government propose with regard to the EMR, the Contracts for Difference (CfD), the new system that is coming in, but the hints are that that too will see either an elimination or a substantial reduction of support for onshore wind. He warned that if the UK government decides that onshore wind will not play a part in a future decarbonisation target then many companies may very well consider launching a judicial review.

“The Scottish Government is determined to pursue renewables of all sorts, including hydro, tidal, offshore” Mr Ewing said “It is a fact that the least expensive, at the moment, of large scale electricity is onshore and that is why the CBI and many individual companies, who I met just on Friday, are now starting to talk very seriously about investing in other countries than the UK. Developers need to know what the long term future is for renewables in the UK because we believe that the decision that the UK government told us about, there was no proper consultation in any meaningful sense, is wrong, ill-advised and irrational.”

According to Mr Ewing 71 percent of people in Scotland not only favour onshore wind, they also want more of it, and that is up from 64 percent a year ago. Mr Ewing also pointed out that as a result of the decision taken by Energy Secretary Amber Rudd, local communities in Scotland could lose out on benefits totalling £8 million per year.

According to Stewart Nicol, chief executive at Inverness Chamber of Commerce, who Mr Ewing met on Friday, the move by the UK government is a ‘political intervention’.

“It is hugely concerning that Westminster has moved to progress these plans ahead of schedule” said Mr Nicol. “It is hard not to conclude that this is a political intervention based on the needs of south of the border, and shows total lack of recognition for the industry’s importance in Scotland as a provider of employment, economic growth and inward investment.”

Gordon MacDougall, Managing Director – Western Europe, RES, said that RES welcomes the Scottish Government’s strong position and that it is looking forward to working with industry groups to ensure onshore wind can continue to contribute towards meeting Scotland’s climate change targets at the lowest cost to the consumer.

The Scottish Government has made representation to the UK government on the issue, including through letters and phone calls as well as raising the matter in the Scottish Parliament. The Scottish Government has also requested a sufficiently flexible grace period covering projects already in the planning system. This flexibility would ensure companies and communities are not penalised unfairly by the UK government’s policy change where they have already invested.

For additional information:

Scottish Government

Fergus Ewing MSP

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