By Owen O’Donnell
The UK government has been accused of neglecting Scotland’s energy industry after Scottish Renewables issued a warning over investment in the offshore renewables sector due to a lack of support from Westminster towards projects in Scotland.
The industry body obtained figures which showed that £28.9m was invested in 2013 compared with £68.3m in 2012, indicating a drop of over 50%.
Senior policy manager Lindsay Leask told the BBC that the reduction in investment was a cause for concern to both the Scottish and UK governments in addition to the energy sector.
She said: “Uncertainty throughout the industry is growing as none of the major projects planned for Scottish waters have had their planning applications determined yet, and the details around accessing market incentives are still unclear.”
The comments come days after SSE threatened to withdraw from commitments to projects in Scotland after a two month review and a month after Scottish Power announced its intention to abandon the £5.4bn Argyll Array Offshore Wind Farm off the coast of Tiree.
Scottish Ministers have also reacted angrily to comments made by UK Energy Minister Michael Fallon, who said that the independence referendum will harm investment in North Sea oil and gas. Fallon told an audience of oil and gas executives at an event at Chatham House that referendum uncertainty was already hitting investment in the sector.
He said: “There is a risk that investment we’re trying to encourage will now be paused … that’s a very big worry”.
He added: “It raises the question of how an independent Scotland would possibly be able to afford the scale of decommissioning tax relief which is only sustainable given the scale of the UK . . . public finances.”
His comments were contradicted by industry experts who reported that 2013 saw a record level of investment in North Sea oil and gas in addition to consultancy firm, Wood Mackenzie, forecasting 14 new fields, with the capacity to produce 438 million barrels of oil equivalent, to come on stream in 2014.
Aberdeen South and North Kincardine MSP Maureen Watt said:
“The UK Government has repeatedly failed our energy industry and is completely failing to learn the lessons of the past.
“It has been well established that Westminster’s successive tax hikes on North Sea oil and gas have put the sector at a competitive disadvantage and cost Scotland valuable investment.
“Now they are doing the same to renewables – with Scottish Renewables highlighting the need for the UK Government to demonstrate its clear commitment to Scotland’s offshore renewable energy sector and provide certainty for the thousands of people employed in the industry.
“Scotland’s renewable energy industry has the potential to sustain as many as 40,000 jobs and can be worth up to £30bn for the Scottish economy, while there is around £1.5 trillion worth of oil left in the North Sea, and it is vital that this immense potential is not stifled by Westminster’s uncertainty.
“With independence, the Scottish Government will ensure a system of fiscal stability for our oil and gas industry and can prioritise investment in our offshore renewables industry, ensuring that our energy sector continues to go from strength to strength.”