The Scottish renewables energy sector could lose £3 billion of investment because of the UK Government decision to close the onshore wind subsidy scheme early.
Industry leaders described the UK Government’s decision to close the Renewables Obligation a year earlier than planned as “bad for jobs, bad for investment and can only hinder Scotland and the UK’s efforts to meet binding climate change targets”.
Scottish renewables chief Paul McCullagh, CEO of Glasgow-based Urban Wind – one of the UK’s leading renewable energy companies – noted with ‘extreme disappointment’ that decision to close early the Renewables Obligation subsidy scheme.
The current Feed in Tariff scheme (which delivers distributed wind benefits throughout the UK) will remain unaltered at present – with a scheduled review to take place in Autumn 2015.
McCullagh said: “Whilst it is welcomed that the Feed In Tariff scheme remains unaltered at this stage, it is particularly disappointing that confirmation of this comes just days after the EU Commission revealed the UK is one of five European countries that are set to miss key carbon targets in their progress towards reaching 15% of our energy coming from renewable sources by 2020.
“Amber Rudd said when she entered office that carbon reduction was one of the most important things she will do as the Energy Minister – but enacting an early ban on the cheapest and most easily deployable method of generating clean energy now seems like a complete backwards step.
“Without onshore wind, the UK will continue to struggle to keep pace with the rest of Europe in reducing our carbon emissions, and to meet these commitments we will be required to invest heavily in far more expensive alternatives.”
“We urge Amber Rudd to recognise the long term benefits that distributed wind can bring to communities and to businesses who are looking to reduce their exposure to rising energy costs and contribute positively to carbon reduction benefits.
“A transparent Feed In Tariff mechanism needs to be in place to attract the necessary investment need to realise development projects potential”.
Meanwhile, Scottish Renewables has completely rejected the UK Government’s rationale for cutting support for onshore wind. A spokeswoman said:
“We believe this decision could put around two gigawatts of onshore wind projects in Scotland at risk. These are projects that could provide the equivalent electricity demand of 1.23 million Scottish homes and significantly improve our energy security, while bringing around £3 billion pounds of investment.
“There are 5,400 jobs in the onshore wind sector in Scotland, and many of these could now be at risk. Early closure of the Renewables Obligation will also serve to damage investor confidence, not only in the onshore wind industry, but in the wider UK energy sector.
“Ending the Renewables Obligation, which projects already in the planning system are reliant upon, is neither fair nor reasonable and would effectively amount to a retrospective act from the Government.
“Onshore wind is the cheapest form of renewable electricity we can deploy at scale, so removing financial support completely undermines the goal of cutting carbon emissions as cost-effectively as possible, and actually risks increasing consumer bills.”