Osborne’s 25% cut to windfarm subsidies may derail Scotland’s energy target

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By a Newsnet reporter

According to the Observer newspaper, UK Chancellor George Osborne has made it clear that the development of green energy cannot remain a priority during a time of austerity and budget cuts and has ordered the UK Treasury to cut subsidies to onshore windfarms by 25%. 

Sources from the renewable energy sector have said that such a drastic cut may kill the industry “stone dead”.

The Chancellor’s move comes in the wake of a mounting protest campaign amongst Conservative bankbench MPs, concerned about the public reaction to windfarms in their constituencies, against the development of what is currently the fastest growing sector of the renewable energy market.

Earlier this year over 100 Conservative backbenchers signed a public letter to the Prime Minister demanding that the UK Government drastically cut the £400m a year paid in public subsidies to windfarms.  Reportedly the Conservative backbenchers see the subsidies paid to these new technologies as evidence of too much Lib Dem influence over coalition policy.

The Chancellor, who is struggling to reassert his authority after an embarrassing series of U-turns on the Budget, has now acceded to the bankbenchers’ demands.  The decision to cut the windfarm subsidy undermines the Conservatives’ pre-election pledge to become the “greenest government ever”.  

Juliet Davenport, chief executive of renewable electricity supplier Good Energy, said:

“This is a reckless act of political opportunism by a chancellor keen to boost his popularity among his backbench MPs.”

This is the second time within a few months that Mr Osborne has displayed an antipathy towards green energies.  Earlier this year the UK Government provoked anger from the renewable energy industry by announcing plans to slash subsidies for solar energy.  

The UK Government’s latest cut will have a disproportionate impact on Scotland, and will lead critics to allege that Scotland’s interests are being sacrificed in favour of the interests of Conservative MPs from the Shire Counties.

A majority of the over 300 onshore windfarms in the UK are in Scotland, including Europe’s largest onshore windfarm, the Clyde windfarm in South Lanarkshire due to be fully operational later this year.  The Clyde windfarm will be capable of generating sufficient energy for over 200,000 homes – enough to power the whole of the city of Glasgow.  Less than one third of onshore windfarms are in England.  

The Scottish Government has a target of generating the equivalent of 100% of Scotland’s electricity from renewable energy by 2020.  A significant amount of this is expected to be wind generated, both onshore and offshore.  The country surpassed its renewables target in 2011, and currently generates 35% of its electricity from renewable sources.

Scotland contributes almost 40% of the UK’s entire renewables output.  The renewable energy industry supports more than 11,000 jobs in Scotland and the sector is expanding.

Prior to the Chancellor’s decision to axe vital development subsidies for onshore windfarms, most industry observers expected Scotland to be on course to meet the ambitious 100% target by 2020.  However the Treasury’s action may now put Scotland’s renewables future at risk.  

The reports follow news that a major investor in Scottish renewables has criticised the actions of a “tiny” group of protestors who it says is putting at risk investment in Scottish onshore renewables projects.

Energy firm Vattenfall has claimed that the Scottish planning system has allowed those who object to windfarms to ‘block’ renewables projects across Scotland.

n its report, Vattenfall criticised what it claimed was an inadequately resourced planning system, and added: “Unfortunately, there are too many examples of decision-makers across Scotland being swayed by a tiny vocal minority, thus denying a majority who support a proposal any influence in the planning system.”

The firm gave as an example the years of delay to a windfarm project on Skye that was delayed by six people despite having the support of hundreds of locals.

The sector, according to a Scottish Government spokesman, has the potential to attract around £46bn of investment and create thousands of jobs.

“We have already made good progress speeding up the deployment of renewable energy by streamlining the planning process, improving the quality of applications and increasing community engagement,” he said.

“As a result, the number of onshore consents has increased four-fold since 2007, with some 50 major developments consented by this government.”