This week’s summit was a an opportunity for me to hear the industry’s concerns about the recent decision from the UK Government to close the Renewables Obligation early in next April.
This of course is a big blow to our industry in Scotland especially as around 70% of onshore wind projects in the UK planning system are in Scotland, this will surely have a disproportionate impact on us.
This can only be described as anti-business and the impacts could spread right across Scotland and the wider supply chain, including ports and harbours, transmission and distribution, consultancy, universities and the civil engineering sector.
All of this is will come at great personal and economic cost to our businesses and people. I’ve heard from many successful businesses who are at the forefront of renewables technology who are now looking being forced to looking at redundancies as a result of these changes.
I also heard from investors both in Scotland and abroad who are wanting to invest in this industry but these are currently being stalled because of the uncertainty this is causing.
Onshore wind is the cheapest way of producing large scale renewable electricity. This decisions will mean, instead of reducing consumer costs, it will be consumers who will pay the price in their energy bills.
Replacing onshore wind with more expensive technologies could end up costing consumers £2-3billion more.
And in addition many communities across Scotland will suffer: both those planning to develop their own local schemes, and those in line to gain from community benefit payments.
In the last 12 months, communities across Scotland received nearly £9million from community benefit payments.
But these could be lost in the future.
Of course change means it will be more difficult for us to meet our renewable targets – where we are on target to meet 100% of our electricity consumption through renewable generation.
The UK Government says it is “minded to” offer grace periods to projects that possess a planning consent, a grid connection offer and acceptance, as well as evidence of land rights.
Although this appears somewhat muddled after the Secretary of State for Scotland, David Mundell, speaking on the BBC’s Sunday Politics show indicated that the grace period will apply when “there is any prospect of a grid connection being delivered.”
In my discussions with the UK Secretary of State, Amber Rudd, I have argued that offering reasonable protection to developers would suggest that grace periods should offer as much flexibility as possible and apply to projects in all stages of planning.
This is not my preferred course but it would at least limit the damage caused to businesses and investors.
Over the next few weeks DECC will be seeking the views of those affected.
I strongly encourage that anyone with an interest to respond on this to ensure our concerns are heard.
The Scottish Government will also be continuing to make representations from what I heard at the summit and the many meetings I have had with representatives from the industry.
A subsidy-free onshore wind industry is of course the goal we are all aiming for, and on a par with the other Scottish energy producers, and I have every confidence we will achieve it.
However the right support is crucial for that to happen which makes the recent course of action from the UK government all the more regrettable.
Fergus Ewing is Scotland’s Energy Minister.
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