The Nuclear Free Local Authorities (NFLA) Scotland Forum has published a report outlining the scale of UK Government cuts to renewable energy subsidies in the past year which now jeopardise the ongoing low carbon revolution in Scotland.
And the report urges the next Scottish Government to concentrate on support for solar energy – an area of renewable energy where Scotland lags behind other parts of the UK.
The Solar Trade Association has suggested a 2020 target of 2GW for solar PV (compared with around 180MW already installed), and 141MWth for solar thermal, while renewable consultants Sgurr Energy have suggested that raising Scotland’s solar ambition to 2GW is possible and could get Scotland close to its 100% renewable target by 2020.
The report notes that local authorities could play a pivotal role in Scotland, and across the UK, in helping to achieve this target, as despite the subsidy cuts many of them are not walking away from solar technology.
Through a combination of developing energy battery storage schemes, constructing private wires for solar projects and benefiting from the continuing falling costs of PV panels, solar energy can still be a feasible economic option for local authorities to deliver on social housing, public buildings and solar farms.
Though the NFLA report is looking at the Scottish context, the same cuts to renewable energy subsidies are having a highly negative effect in England, Wales and Northern Ireland, and some of the ways forward also have resonance for devolved governments and local authorities across the UK.
A senior member of the NFLA Scotland Forum said: “This NFLA report outlines in detail the scale of damage to the renewable energy sector in such a short period of time, which could have real implications for Scotland’s ongoing low carbon energy revolution.
“The next Scottish Government has a real challenge on its hands in finding ways around UK renewable subsidy cuts, but this NFLA report advocates that the continuing cost reductions in solar energy make it entirely possible to reach close to a 100% target for renewable electricity in Scotland by 2020 by supporting this sector.
“Whoever is elected in May should read this report and work with Scottish councils to achieve such an important policy goal.”
Cuts to renewable energy subsidy have taken place in recent months:
Onshore Wind – The Renewable Obligation (RO) will be closed to onshore wind a year earlier than expected in April 2016, and new projects are unlikely to be eligible for a subsidy through the new Contract for Difference system. This will not affect proposals for wind-farms on more remote Scottish islands as these were not expected to meet the later deadline for the RO in any case. Unlike mainland onshore wind, island projects will hopefully still be able to apply for a subsidy under the CfD system.
Solar Farms – The UK Government confirmed in October 2014 that solar farms above 5MW would be ineligible for RO support from April 2015. (3) Then, in July 2015, the UK Government announced it was ending RO support for farms below 5MW a year early in April 2016.
Feed-in Tariff Cuts (Solar) – Solar schemes below 10kW saw feed-in tariff payments fall by 63.5% from 8th February 2016 (not quite as drastic as the 87% cut originally proposed). Sub-10kW solar schemes will now receive 4.39 pence per kilowatt hour (kWh) from February instead of 12.03p/kWh which they had been receiving before then. PV systems with a capacity of 10-50kW saw their tariffs fall by nearly 58% to 4.59p/kWh instead of 10.90p/kWh previously.
Feed-in Tariff Cuts (Small Wind) – Small turbines less than 100kW now receive 8.54p/kWh – a cut of 38%.
Feed-in Tariff Cuts (Small Hydro) – Tariffs for small hydro were cut even further than had been proposed in the consultation – in some cases by up to 45%.
Pre-accreditation – This is a mechanism which is particularly important to corporate and community renewables projects. For developers who struggle to know whether a tariff cut is on the way before they start raising investment for a project, pre-accreditation gives certainty about the level of subsidy they will receive. Pre-accreditation was cancelled from last October. But this has now been re-introduced for solar PV and wind generators over 50kW, as well as for all hydro and anaerobic digestion plants.
Tax Relief Scrapped – At the end of October 2015 the Treasury announced that the various forms of tax relief – Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS) tax relief and Social Investment Tax relief (SITR) – for investors in community energy would be scrapped from 30th November.
Renewable Heat Incentive: The Department of Energy and Climate Change (DECC) has proposed removing solar thermal’s eligibility for subsidy support under the renewable heat incentive (RHI) from 2017.