Westminster’s delayed subsidy cut decision could make Scotland an even more attractive option for green energy investment
While concerns about the UK Government’s delays in deciding the future of renewable energy incentives are likely to jeopardise investment south of the border, Scottish subsidies remain unaffected, according to Nick Green, Savills Head of Energy.
He said “Protracted discussions about whether incentives in the form of ROCs (Renewable Obligation Certificates) for wind energy should be cut by 10 or 25% have the potential to seriously damage the industry south of the border. Investors have been attracted to the UK in the past due to its predictable and stable regulatory regime, so it’s vitally important that a quick decision is reached.
“The position is different in Scotland and ROCs could remain unaffected. The Renewables Obligation differs in north of the border, with decisions on rates being set in Holyrood. This, as well as the fact that Scotland benefits from over 25 per cent of Europe’s wind resource, makes it a much more attractive option for wind energy investors.
“Historically the devolved regions of the UK have maintained consistency with incentives (although Scotland set higher rates for wave and tidal) but if Holyrood cannot see the justification for more than the 10% cut already proposed it may choose not to follow Westminster.
“This would be a bold move by the Scottish Government and make a strong statement about their commitment to meeting their ambitious target to produce 100% of Scotland’s own electricity demand from renewable resources by 2020. It also puts a marker down in the ongoing independence debate.”
Maria McCaffery, chief executive of RenewableUK the trade body for the wind industry, said: "We are urgently calling for the government to reach an agreement [on the subsidy] as quickly as possible. The economic evidence is crystal clear – it shows that there is no case for cutting support for onshore wind beyond the 10% originally proposed and consulted upon in the government's own review. Any further delay in an announcement could have a devastating impact on investor confidence, job creation and the deployment of clean energy."
She added: "It would be unacceptable if the decision were to be delayed until September – especially as the new banding levels are due to come into force just seven months later, in April 2013. It is imperative that investment and job creation are not harmed in one of our key growth sectors. The industry is demanding clarity at the earliest possible opportunity as a matter of urgency."
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