The Scottish National Party (SNP) has warned the UK government that foreign investors could launch compensation claims against planned subsidy cuts.
The SNP has called for maximum flexibility from the UK government with regard to the grace period for implementing their planned cut in financial support for renewables, including projects already in the planning process. This follows reports that foreign investors in the Scottish renewables sector could launch multi-million pound compensations claims against the UK Government for its plans to axe subsidies for onshore wind projects.
In June this year, Scottish Government Energy Minister Fergus Ewing warned Whitehall of the threat of a costly legal battle if they pushed ahead with cuts to financial support for the onshore wind industry. Trade association RenewableUK also issued similar warnings and legal experts Pinsent Masons have now also said that international investors backing Scottish Renewables could raise a claim for compensation.
“The possibility of legal action against them should not come as a surprise to the UK government – they were warned by the Scottish Government that this could happen if they insisted on reneging on promises to investors in Scotland’s renewables industry” said Calum McCaig MP, the SNP Energy and Climate Change spokesperson in the House of Commons. “The UK Government must now show maximum flexibility in the grace period for implementing their planned cut in renewable subsidies – and support must include all projects already in the planning process. The early closure of the Renewable Obligation is not a sensible decision and it has exposed the UK Government -and therefore the Scottish taxpayer- to the risk of Judicial Review.”
Rob Gibson MSP added that the decision to close the RO a year early was a betrayal by the UK government and that they must now ensure existing projects are supported to the full. Mr Gibson said that the withdrawal of financial support represents a total betrayal towards people who were persuaded to vote No after being told that Scotland’s renewables sector was only safe if Scots rejected independence.