Amber Rudd the Tory Government’s new Secretary of State for Energy and Climate Change has made it clear she intends to make substantial changes to onshore wind financial support schemes in compliance with her party’s manifesto pledge to end “new public subsidy” for renewable wind power generation.
There may be some public support for this move if it is perceived as an attempt to create a level playing field for providers of energy, which would indeed be an admirable ambition.
But in reality such a policy change almost beggars belief. Perhaps the only great achievement of the late UK coalition government, with a huge amount of support from Holyrood, has been the successful deployment of onshore wind power generation; the achievement of renewable energy targets in Scotland is testimony to this success.
Is Westminster running scared of the fact that Scotland has excess power generation whilst England relies heavily on power from Europe and Scotland to keep the lights on?
Such a view is strengthened when seen in the light of the earlier decision to end electricity generation from Scotland’s only coal-fired power plant at Longannet, even though it is by far the cheapest form of electricity available in the UK.
Does Amber Rudd fail to grasp the fact that the UK is still emerging from austerity and a balancing act is required between meeting renewable targets and securing a successful economy?
Jobs in Scotland and the rest of the UK are threatened by both these decisions.
Has the Conservative Party given up completely in maintaining any sort of presence in Scotland going forward?
Does Amber Rudd believe that nuclear power is the only game in town and Scotland should fall in line or suffer the consequences?
The removal of new wind generation subsidies threatens one of our cheapest and greenest sources of power generation. The cost of onshore wind power is far less than the exorbitant cost of nuclear power even setting aside the uncertain clean-up costs associated with nuclear.
It has been said that to end onshore wind farm subsidies along the lines being speculated will amount to the ‘wilful destruction’ of what is a very successful industry.
It is clear that ending onshore wind subsidies will be detrimental to the tens of thousands of people employed in the sector and further to future electricity generating capacity, with many new projects particularly in the planning stage likely to face cancellation.
This impact will be more keenly felt in Scotland than England, with the bulk of new onshore wind farms planned for Scotland. There will of course also be wider ramifications. The major electricity companies dominate both the onshore wind and conventional energy utilities.
They are the same companies who light and heat our homes and places of work. Any policy change that makes the UK less attractive to invest in compared with other jurisdictions calls into question the judgement of those in key government positions.
Is the UK energy policy now rudderless? Avoiding divestment in the UK electricity market should now be a key policy consideration. There is more at stake than just the domestic onshore wind industry. At the very core of the issue is keeping the lights on across the UK.
Who in the UK wants to be reliant on imports of high tariff nuclear electricity from France rather than cheaper electricity from Scotland and the rest of the UK? Given that one planned new nuclear build in England at Hinkley Point C in Somerset is probably ten years away from completion, and is totally reliant on Chinese and French funds and technical skills, must be a future political and economic headache for the UK Government.
There is a clear economic rationale for supporting the UK renewables industry. The prevailing view is that deploying onshore wind and solar power will be significantly cheaper than funding new nuclear build across the UK.
The Scottish Government has produced cogent reasons for not allowing new nuclear build in Scotland and the planning system allows Scotland to block new nuclear build. Westminster’s decision to back new nuclear build at the expense of further renewables expansion jeopardises the UK’s ability to keep the lights burning in the future.
In supporting the transition to a low carbon economy and in meeting both domestic and European 2020 renewable targets a thriving onshore wind industry is clearly an issue of national importance.
It is not an industry that should be tossed aside. Furthermore, the way that this issue has been handled once again raises significant constitutional issues, many of which were rehearsed during the recent referendum.
With the Queen’s Speech it was said that there would be consultation and close discussion regarding onshore subsidies with Scottish Ministers. From the reaction of Scotland’s Minister for Business, Energy and Tourism last week this has not been the case.
This raises significant concerns and questions regarding the wider governance of the UK and Scotland’s place in the Union. Especially at a time when we hear much of the spirit of the Smith Commission and the passage of the Scotland Bill one would not expect the approach that has been adopted by the ruling political elite.
Intergovernmental relations have been surely tested over the past week. The following questions arise: Will this be Westminster’s approach to governing Scotland and the other home nations during the next five years?
Will this be acceptable to the people of Scotland, Wales and Northern Ireland?
From a constitutional and governance viewpoint the time might be right for a significant proportion of the Levy Control Framework (LCF) to be devolved to Scotland. This transfer of power would allow Scotland to continue to fund its renewables priorities, whilst allowing England to progress with its own policy preference for new nuclear build.
Perhaps the UK Government will act to stop the sharp decline in confidence that is now evident within the UK electricity sector and renewables industry. But if current predictions are correct Amber Rudd’s imminent pronouncements may make things even worse. The UK should not be reliant of the efforts of the French and the Chinese to meet our energy needs.
When it comes to new energy investment the UK now appears to be a hostile place to do business. This is not good news for people and businesses up and down the country. Are we now two steps closer to the lights going out this Christmas or next?
Peter Strachan is a Professor of Energy Policy and Alex Russell is a Professor of Petroleum Accountancy at the Robert Gordon University
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