THE Scottish Government and the new Tory Government in Westminster are heading for a major clash today over the early end to the UK’s subsidies for onshore wind farms.
Energy Minister Fergus Ewing told the Scottish Parliament yesterday that, according to trade body Scottish Renewables, up to £3 billion-worth of onshore wind projects in Scotland and over 5,000 jobs are at risk from the early closure of the subsidy scheme.
In addition, Ewing warned companies and communities could take the UK Government to court for a judicial review of the unexpected change of policy, and electricity consumers would face rising bills.
Ewing will meet UK Secretary of State for Energy and Climate Change Amber Rudd later today after she announced new subsidies for onshore wind developments under the Renewables Obligation (RO) would end a year early in April 2016.
But Ewing has already accused Rudd of setting a “terrible example” to the world, “undermining trust” in energy investment in the UK and costing Scotland £46m in community benefits.
He said: “I appreciate the Conservatives made a manifesto pledge to end new subsidies for onshore wind farms, but that gave no notice to investors and developers that existing subsidies would be cut short.
“As Climate Change Secretary, and the person who will represent the UK in the crucial UN Climate Change talks in Paris in December, Amber Rudd must not ignore the major contribution that onshore wind – as the cheapest large-scale source of renewable electricity – can make to compensate for slow progress in other areas such as heat and transport.
“Yet her first act in the new Government is to cut green energy provisions – setting a terrible example to the rest of the world.”
On Monday, Rudd told the Commons that 250 projects with 2,500 turbines would not go ahead as a result of the change in policy and admitted it would have a disproportionate effect on Scotland, with 68 per cent of onshore wind plans in Scotland.
Ewing said: “While the abrupt and early curtailment of the RO will have serious implications for people right across the United Kingdom, the economic and supply chain impacts are concentrated heavily in Scotland.
“Around 70 per cent of all onshore wind projects in planning across the United Kingdom – the projects at risk – are located here.
“The future of other support schemes for onshore wind – Contracts for Difference and Feed-in Tariffs, the latter applying to smaller schemes – is unclear.
“It is crucial, therefore, that the UK Government provides early information on the future of Contracts for Difference.”
Ewing added: “Developers have invested very substantial sums on the understanding that the RO is an existing scheme and not new subsidy, and on the basis of a clearly stated policy to ensure a smooth transition from the RO to Contracts for Difference.
“Our view is that the planned transition policy should be maintained. Any other course gives rise to harmful uncertainty, undermines the UK’s reputation with investors and risks wider consequences for investment far beyond the renewables sector.
“The impacts reverberate across the wider supply chain including ports and harbours, transmission and distribution, consultancy, universities and the civil engineering sector.”
Ewing said the early end exposed “the Scottish and UK taxpayer to serious risk of judicial review at the instance of companies or indeed communities impacted,” and the change would affect consumers and communities: “Replacing onshore wind with more expensive technologies could cost consumers £2bn to £3bn more,” he said. “Renewable Energy Systems estimates that up to £46m of community benefit could be lost in addition to the revenue from local construction and business.”
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