Leading green energy companies say UK government is damaging business confidence


By a Newsnet reporter

In a survey carried out by the Guardian newspaper, leading renewable energy companies have revealed that fears over the commitment of the UK government to renewable energy development have led them to put billions of pounds worth of investment on hold.  

Representatives of the companies say that they are either reviewing their UK investment plans, or seeking clarification from UK energy ministers on future energy policy.

However the sole bright spot in the Guardian’s survey came from Scotland, where renewable energy companies feel more confident about the support and commitment of the Scottish government.  Scottish Power plans to invest almost £1 billion in renewable energy development projects.  Almost all of this money will be invested in Scotland.

The fears causing renewable energy companies to rethink their plans of investing in the UK derive from the large and vocal group of Conservative MPs who are pressing the Coalition government to withdraw subsidies on wind-power generation and to tighten up the planning process to make development of wind farms more difficult.  At the end of January, a group of 100 Conservative MPs signed a letter in the Telegraph newspaper calling on the UK government to slash the subsidy for on-shore wind farms.

While in opposition, David Cameron affected a pro-green stance in order to woo environmentally concerned voters.  In an infamous publicity opportunity in 2006, the future PM’s office let press photographers know he’d be cycling to work in order to save energy.  However behind him followed his ministerial car containing his briefcase.

Alongside the increasingly vocal demands from the Conservative back benches, the UK government has also recently been back-pedalling on the promise made by the Conservative leader prior to the 2010 general election to be the “greenest government ever” by downplaying the importance of targets to cut greenhouse gas emissions from fossil fuels and to increase the proportion of energy generated by renewables.

Some analysts and Westminster watchers, such as Guardian political correspondent Juliet Jowit, argue that the Coalition government is preparing the ground for an energy policy shift away from renewables in favour of increased investment in nuclear and gas.  Nuclear power receives a higher subsidy than that received by wind generation.

The uncertainties created by Westminster policy shifts are damaging investment in the industry.  Both Longannet and Peterhead Carbon Storage projects were shelved after successive Labour and Tory Governments effectively blocked the plans.

Speaking to the Guardian, the managing director of General Electric, Magued Eldaief, said that a planned £100m investment was “on hold” until UK ministers clarify future referms to the renewable energy market.  He decribed the anti-wind energy statement of the Conservative MPs as a “concern”, saying:  “It’s something we’re watching very closely. We would like clarity and we would like it as quickly as possible.”

Me Eldaief said:  “Our investment is on hold until we have certainty and clarity regarding the policy environment that we are in.  One of the most important things for us is political certainty, so we can justify the business and investment case for a facility in the UK.  But we think there are some headwinds which do not help, especially in terms of the subsidies discussion.”

Even with the Scottish government’s pro-renewable stance, which recently angered Donald Trump, the full development of Scotland’s renewable energy potential depends upon financial and economic powers which are reserved to the Westminster government.  The damage to investment in this sector, which is vital to the success of the Scottish economy, will lend weight to the argument that the Union does not operate in Scottish interests.