Industry chiefs confirm that confidence in Scots renewables sector is ‘fragile’ after Brexit shock

renewables generalThe British renewable energy sector could receive a dual boost from Brexit, according to planning experts at legal services firm Pinsent Masons.

Over-regulation which stifles new onshore and offshore wind developments could be watered down, while removing State Aid rules could encourage greater manufacturing of the infrastructure required for renewable projects.

A planning law expert at Pinsent Masons said Brexit threw up a number of positives and negatives. He said: “There is good and bad for the renewables industry in terms of the UK’s current relationship with the EU.

“The bad is that some segments of the market – for instance onshore and offshore wind – are over-regulated. The EU imposes particular requirements which means the development process needs to be conducted in a particular way and a whole load of constraints and extra costs are introduced.

 “The clearest example is the designation of environmentally protected areas, some of which are in exactly the sort of places where one would want to build onshore or offshore wind farms. Some in the UK have never been convinced by the science that underpins those designations and concerns have been expressed that designations are politically motivated.

 “Forward-thinking developers may already be reviewing their thinking around areas currently designated or proposed for designation as having EU protection on environmental grounds. If there is a relaxation at a UK level that could be both commercially significant and controversial.”

Pinsent Masons also highlighted that the removal of restrictive State Aid rules could have a significant impact on the industry, while a new trade relationship could transform the profile of players in the UK wind sector.

Partner Gary McGovern said: “State Aid rules which impose a requirement to maintain a level playing field could be gone and so create new opportunities.

“For instance, a live issue currently is whether proposals to allow onshore wind projects on the Scottish Islands to retain access to the Contracts for Difference regime would fall foul of State Aid rules if at the same time mainland wind projects are excluded.

“There could also be selective interventions to stimulate UK renewables manufacturing. All the major kit for renewable infrastructure is procured from continental Europe as there is little manufacturing base in the UK.

 “There could be greater opportunity to stimulate that base through targeted action without fear of triggering State Aid rules, however there would be significant ground to be made up.”

However, McGovern said there would be heightened concern that Brexit would make renewables a less attractive option for European investors.

He added: “It’s striking that much of the current investment and financing for renewables comes from outside the UK, and a significant proportion of the major players in UK renewables are owned by European parents.

“For those subsidiaries of European businesses, or those reliant upon foreign investment, there will be concern over potential trade barriers which could make the UK a less attractive investment proposition.”

However, confidence among Scottish renewable energy firms is ‘fragile’, industry chiefs admitted yesterday after an ‘annus horribilis’ which has also seen the sector hit for six by the abolition of subsidies for onshore wind farms.

A spokesman for Scottish Renewables added: “The many questions thrown up by Brexit just add to the huge uncertainty that was already surrounding Scotland’s renewable energy sector following numerous changes to support by the Westminster Government over the last 12 months.

“Confidence amongst most of our members is incredibly fragile right now, and we need clear leadership at Westminster and Holyrood if we are to deliver further growth, to protect the many thousands of jobs supported by the industry, and to deliver the change in our energy sector that the people of Scotland want to see.”

 

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