THE head of Scotland’s green energy industry body has written to the Prime Minister to warn that slashing subsidies for onshore wind farms by more than 10 per cent could cause “substantial” damage to the sector.
Niall Stuart, director of Scottish Renewables, said he has “deep concern” about rumours that government support for onshore wind farms could be cut by up to a quarter.
He said a cut of this level would “substantially reduce the amount of onshore wind brought forward, impacting on progress towards the UK’s and Scotland’s targets for renewable electricity production”.
Chancellor George Osborne is said to be fighting Ed Davey, the Energy Secretary, for a deeper cut in financial support for onshore wind turbines.
The coalition last year proposed slashing subsidies for onshore wind farms under the Renewable Obligation scheme by 10 per cent. However, Mr Osborne is said to be pushing for a reduction of up to 25 per cent.
Writing to David Cameron, Mr Stuart said a further reduction for onshore wind would create a “hiatus” in investment, impacting on progress towards meeting renewables targets.
The Scottish Government is aiming to generate the equivalent of 100 per cent of Scotland’s electricity demands from renewables by 2020, and next week climate change minister Stewart Stevenson will be in Rio de Janeiro, Brazil, representing Scotland’s commitment to green energy at the global leaders’ Earth Summit .
Mr Stuart argued that changing subsidy levels would impact on projects that have based their finances on the current level of support, “threatening the economics of some projects and halting others in their tracks”.
He warned: “A sudden cut in support without any proper consultation would damage the confidence of investors within the broader renewable energy sector, threatening future developments and creating uncertainty in the supply chain.
“This course of action would inevitably raise questions in the boardrooms of companies which have committed to bring offshore wind manufacturing to the UK, including Siemens, Gamesa and Samsung.”
Cutting subsidies would be popular among Conservative MPs. More than 100 wrote to Mr Cameron earlier this year calling on him to limit the growth of onshore wind generation.
Keith Anderson, chief corporate officer at ScottishPower, said he too was concerned about rumours of “political intervention”.
He warned: “We have prided ourselves at not having to factor in political risk to our UK investment decisions, but perhaps it is something we may need to consider in the future as we seek to invest billions of pounds in renewable energy projects. We want to help the UK to achieve its carbon reduction targets, and to do this we need certainty and consistency in energy market regulation.”
A spokesman for the department for energy and climate change said government support levels for renewables would be published “shortly”.