Scottish Energy Minister Fergus Ewing has invited his UK counterpart to Scotland to discuss the impact of the UK Government’s decision to end onshore wind subsidies under the Renewables Obligation.
During a meeting with British Energy Secretary Amber Rudd in London this morning, Ewing invited her to Scotland to meet with developers and communities who have invested significant amounts of money in renewables schemes and have now found the goal posts have been moved.
Last week’s decision was met with outcry by the Scottish industry who claimed it ‘could cost £3 billion investment in Scotland’ while the Civil Engineering Contractors Association (Scotland) said that this decision ‘puts as many as 3,000 full-time jobs at risk, particularly in remote areas where alternative employment is hard to find.’
Scotland’s First Minister has also written to the Prime Minister asking him to ‘look again at the impact these proposals will have on the Scottish and the wider UK economy and find an alternative approach.’
Ewing explained: “The decision taken by the UK Government to close the Renewables Obligation early for the onshore wind sector will have a negative impact on the renewables industry in Scotland and potentially on the thousands of people who work in it.
“The Scottish Government has been clear that onshore wind should be able to compete with other technologies through the ‘contracts for difference’ auction.
“To prevent the cheapest technologies from competing in the auction will not deliver the best price for the consumer and I have asked UK Government to provide clarity on this issue which is causing anxiety to the industry.
“This is especially important as the decision will have a disproportionate impact on Scotland as around 70% of onshore wind projects affected by the UK Government policy change are located here.”
The Scottish Energy Minister said that there can be no doubt that the move to close the RO prematurely will harm investment and jobs; damage severely the prospects of community energy schemes; and ultimately increase the consumer cost of meeting renewable energy targets.
He also warned that premature abandonment of onshore wind projects over the summer as a result of Rudd’s announcement could also increase the possibility of UK power-cuts this winter if demand exceeds supply at a time when UK regulator OFGEM is warning that ‘supply margins as low as 2%’ this winter
Ewing added: “The key impacts fall into four categories for: consumers, communities, companies and our renewable energy goals.
“Consumers will pay the price in their energy bills. Onshore wind is the cheapest large-scale source of renewable electricity – a fact admitted by Amber Rudd in her Radio 4 interview last week.
“Replacing onshore wind with more expensive technologies could cost consumers two to three billion pounds more. That’s the clear warning from Keith Anderson of Scottish Power.”
In addition to the impact on individuals and households, local communities will suffer. Communities planning to develop their own local schemes and those in line to gain from community benefit payments will lose from early closure of the RO.
In the last 12 months, communities across Scotland received nearly £9 million from community benefit payments and further community income streams could be lost – for example:
- RES (Renewable Energy Systems) estimate that up to £46 million of community benefit could be lost in addition to the revenue from local construction and business rates.
- Falck Renewables Wind has three projects at risk from early closure of the RO. If their projects are not completed, £10.4 million will be lost to the local community and 11 communities will lose out on the opportunity to invest in co-operative investment schemes.
The Minister concluded: “Onshore wind is the least expensive source of renewable electricity and to ignore the massive resource available from Scotland, and squander the huge economic benefits for consumers, communities and companies is utter folly.”