By Martin Kelly
Scotland’s First Minister Alex Salmond has sent a strongly worded letter to the UK coalition warning that their continued failure to clarify the levels of support Westminster will give to the renewables sector is putting at risk millions of pounds worth of investment.
Mr Salmond warned of “real anxiety and unrest” amongst developers and called on the Tory/LibDem alliance to address the concerns of stakeholders as quickly as possible.
The First Minister’s intervention follows speculation that the UK government is considering slashing support to onshore wind generators by more than the recommended 10%.
In his letter, Mr Salmond made it clear that the Scottish government would adhere to the recommendations made by the Department of Energy and Climate Change (DECC) and would not cut support by more than the recommended level, regardless of whether Westminster decided to cut by more.
Mr Salmond wrote: “This uncertainty is wholly unnecessary, is placing investment at risk – the CBI spoke on Wednesday of millions of pounds of investment now at risk – and needs to be addressed as quickly as possible.”
In a demonstration of the Scottish government’s commitment to renewables, the First Minister added: “That is why I wish to make clear that the Scottish Government intends to amend the onshore wind ROC band to 0.9 with effect from April 2013, in line with all available evidence.”
The Department of Energy and Climate Change had been expected to publish its plans for an expected 10 per cent reduction in the Renewable Obligation Certificate (ROC) band for onshore wind on Wednesday last week, but postponed the announcement at the last minute.
According to media reports, the delay was caused by a row between the Tory and Lib Dem coalition partners. Tory Chancellor George Osborne has apparently agreed to implement the 10 per cent cut in subsidy but only in return for Lib Dem backing for a scale back on UK carbon emission targets, something that Lib Dem Energy and Climate Change Secretary, Ed Davey, is against.
The Scottish Government has sought to maintain an approach consistent with the rest of the UK, but without knowing what level of support renewable energy producers are set to receive next year, companies are finding it difficult to make plans for job-creating investments in Scotland.
Earlier this week Scottish Power expressed their concern that these delays were harming investor confidence while the CBI has warned that millions of pounds of investment are now at risk.
Should Chancellor George Osborne cut government support by more, then Scotland and the rest of the UK would effectively be operating two different frameworks for the renewables sector.
Commenting, SNP MSP Chic Brodie who sits on the Economy, Energy and Tourism Committee said the First Minister’s show of commitment was “good news for Scotland and good news for Scotland’s renewables industry.”
However Mr Brodie echoed the warning from Mr Salmond and added:
“Waiting for Westminster’s power struggles to play out would only put projects at risk. Losing out on jobs and investments while we wait for them to get their act together would simply not be acceptable.
“The SNP Government has acted decisively and I am sure that will be welcomed by the thousands of people whose jobs depend on our growing renewables sector.
“This move puts an end to the uncertainty and will allow investment in renewables to continue in Scotland.
“The coalition is currently facing a major test of its commitment to the renewables sector and it is one that they are currently flunking.”
The intervention by the First Minister came on the same day that a report by the Commons Energy and Climate Change Select Committee criticised UK Government energy plans and changes to the draft bill put forward by the UK Treasury.
Tim Yeo, chairman of the committee, said: “The Treasury has clearly intervened in the draft bill in a way that will put up bills to consumers and put off investors by increasing their risks.
“This is exactly the opposite of what the Treasury says it wants,”
Commenting on the committee warning, Friends of the Earth said the UK Government was in danger of botching its plans to boost clean energy, Head of Campaigns Andrew Pendleton said:
“This report really hits the nail on the head – the Treasury’s block on reforms to the UK’s electricity system threatens to keep the nation hooked on increasingly expensive fossil fuels for decades.
“Despite soaring fuel bills, an over-reliance on imported gas and a climate crisis that’s gathering pace the Chancellor refuses to accept that our energy system is broken and wants to build more dirty gas-fired power stations.
“The [UK] Government must listen to the committee’s advice and set a target to decarbonise our electricity system by 2030, slash energy waste and unleash a revolution that allows us all to benefit from affordable and clean British energy.
“There’s huge public support for renewable energy investment instead of gas – David Cameron must stand up to George Osborne and ensure the Energy Bill helps to build a cleaner future.”