MPs on the House of Commons’ Scottish Affairs Committee are set to grill British Energy Minister Amber Rudd over the sudden U-turn by the UK government to abandon its commitment to the £1 billion carbon-capture project in Peterhead.
The decision – announced in a written statement by Chancellor George Osborne after he had finished delivering his spending review in the Commons in November last year – came as a shock to the industry in general, and also to Shell and SSE who had planned to set up the carbon-capture project in Peterhead power station.
Meeting in Edinburgh, MPs were clearly surprised to hear that there had been ‘no consultation’ on this major policy U-turn / change with the Scottish Government.
Senior officials in St. Andrew’s House also told the MPs that there had been only ‘late consultation’ with the Scottish Government on the UK Government’s decision to withdraw the ROC subsidy for onshore wind farms.
He said it was likely that the Committee would raise these matters with Amber Rudd next week when she is due to give evidence to the Scottish Affairs Committee as part of its investigation into the renewables industry in Scotland.
Paul Wheelhouse, Scottish Energy Minister, later added: “DECC <Dept for Energy> has a history of sudden and last-minute major policy changes, which de-stabilise the industry and diminish investor confidence.
“We may never see eye to eye on every issue, but we can establish common ground in the interests of the energy industries in Scotland and UK and avoid the ‘dog’s breakfast’ of sudden regulatory changes.
“Having said that, and have only been recently appointed to this post, let me say that the Scottish Government wants to build-bridges <with DECC> and have a constructive, collaborative partnership with them.”
Wheelhouse also told MPs that the Peterhead CCS proposal is ‘not completely dead’ despite the ‘body blow’ delivered by UK Chancellor last year when he pulled underwrite funding for the £1 billion Shell-SSE project. The Oil and Gas Authority (regulator) and Oil and Gas UK are ‘still interested’ in CCS, he added.