The Scottish Government has announced plans to step in and "save the renewable energy industry" in Scotland "from the damage being caused by ongoing uncertainty over Westminster's plans" for Renewable Obligation Certificates (ROCs).
The Department of Energy and Climate Change (DECC) had been expected to publish its plans for an expected 10% reduction in the ROC band for onshore wind last week, but postponed the announcement at the last minute.
Reports in the Financial Times last week "make clear that the delay has been caused as a result of a power struggle between members of the UK Government coalition, with George Osborne seeking a more severe cut to renewables support," the Scottish National Party (SNP) said in a statement.
"The Scottish Government has sought to maintain an approach consistent with the rest of the UK, but without knowing what level of support renewable energy producers are set to receive next year, companies are finding it difficult to make plans for job-creating investments in Scotland. Earlier this week Scottish Power expressed their concern that these delays were harming investor confidence while the CBI has warned that millions of pounds of investment are now at risk."
Scottish support confirmed
The Scottish Government has therefore decided to act alone, setting its plans for onshore wind Renewable Obligations "at the level both it and the DECC consulted on". Support for onshore wind generation in Scotland has been set at a level of 0.9 Renewable Obligation Certificates (ROCs) – a reduction of 10%, in line with proposals in the recent consultation on this issue.
"The Scottish Government is not aware of any evidence for any further reduction," it stressed. In a letter to UK Energy Secretary Ed Davey, Scotland's First Minister Alex Salmond urged the UK Government (which this week published FIT prices for small scale renewables) to follow suit and "give clarity to the renewable energy industry".
Salmon said: "The continuing uncertainty surrounding the outcome of the Renewables Obligation reviews upon which both Governments have consulted risks undermining significantly our ability to meet our shared renewable energy aims." DECC's announcement to delay its ROC review decision "has caused real anxiety to stakeholders and developers, especially in the light of recent press reports that the UK Government is considering even lower onshore wind support levels than the 10 per cent reduction proposed in the consultation", he continued.
"This wholly unnecessary uncertainty is jeopardising future investment – the CBI spoke last Wednesday of millions of pounds of investment now at risk. That is why I wish to make clear that the Scottish Government intends to amend the onshore wind ROC band to 0.9 with effect from April 2013, in line with all available evidence." The Scottish Government will publish its full consultation response shortly, he added.
Warm welcome
The news has received a warm welcome. RenewableUK's Deputy Chief Executive, Maf Smith stated: "RenewableUK is delighted that the First Minister has shown such leadership to protect energy security and UK jobs.
"We now urge the UK Government to publish its position and back onshore wind and the benefits it delivers to the UK economy. The economic evidence is clear to sources from the CBI to the Scottish Government, so there is no need for further delay; 8,600 ordinary workers across the UK are waiting on the Government to confirm their jobs are safe, and show its commitment to clean, secure, price-predictable energy. These delays are sending waves of uncertainty across the whole of the renewables industry and blocking much needed investment."
Meanwhile, SNP MSP Chic Brodie, who sits on the Economy, Energy and Tourism Committee said: "This is good news for Scotland and good news for Scotland's renewables industry. We simply cannot afford to be held back while Westminster dithers, so I am delighted that the Scottish Government has stepped in.
"Waiting for Westminster's power struggles to play out would only put projects at risk. Losing out on jobs and investments while we wait for them to get their act together would simply not be acceptable.
He added: "The coalition is currently facing a major test of its commitment to the renewables sector and it is one that they are currently flunking."
It's a sentiment echoed by Adrian Reed, head of energy, waste and renewables at international investment bank Altium, in a comment posted on the Renewable Energy Focus website earlier today. "Some things are too important for "Opinion Poll Politics"…We need investment now," he writes. "The only way this will happen is through clear, predictable and consistent policy."
