Scots islands scoop Westminster renewables cash

The Scottish islands will benefit from investment announced at Westminster yesterday. Picture: Contributed
The Scottish islands will benefit from investment announced at Westminster yesterday. Picture: Contributed
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THE coalition government yesterday pledged to boost renewable energy production in Scotland’s islands as part of a £100 billion infrastructure package for the UK.

The commitment to building new generators was announced as Liberal Democrat Chief Secretary to the Treasury Danny Alexander unveiled what he described as the biggest infrastructure programme in UK history.

Most of the measures – which include spending £28bn on roads, £10bn on school repairs, a new £100 million prison, 165,000 affordable homes, 850 miles of rail electrification, £250m on superfast broadband and energy projects – will mainly affect England and Wales.

The Scottish Government will have an extra £300m to spend on projects of its own choosing. The extra money for the Scottish islands has not been costed but is believed to be in the millions.

The statement by Mr Alexander also revealed a £15bn sale of government assets, including the student loan book which will pass into private hands.

“This is an ambitious plan to build an infrastructure that Britain can be proud of,” he told MPs. But his Labour shadow, Chris Leslie, said his statement was “a lot of hot air”, adding many of the projects announced had already been promised.

At the heart of the infrastructure announcement was an energy “revolution”, including a £10bn loan for a new nuclear power station and subsidies to extract shale gas reserves.

Mr Alexander also brought forward the date for setting the strike prices – the cost of transmitting energy from renewable sources – to December, which was seen as a major step forward by the industry.

There was a commitment to reduce the strike prices for the Scottish islands, together with the announcement to consult in the summer on additional support for renewable projects there.

Jenny Hogan, director of policy for the green energy trade association Scottish Renewables, said: “The UK government’s commitment to provide extra support for renewable generators on the islands will help reassure investors who are faced with the highest grid connection charges in the UK – but we can’t afford to waste any time.

“The islands have huge potential for wind, wave and tidal energy, and can make a substantial contribution to the growth of renewables and the cleaning-up of our energy sector.”

Responding to the publication of draft strike prices for renewable energy technologies, Ms Hogan said: “Knowing your strike price is just part of the picture; we now need to see the details of the contracts to put them into context, which won’t be published until August.

“Only then can we judge if the levels will be sufficient to encourage the investment needed to meet our targets.”

But there was criticism of the overall package from some environmental groups who believe that investment in nuclear and shale will undermine the commitment to renewable energy.

World Wildlife Fund Scotland director Lang Banks said: “Our planet’s climate cannot afford for us to burn all the fossil fuels we previously knew about. News that there might be even more shale gas is not something we should be celebrating.

“In environmental terms, plans to offer tax breaks for shale gas and billions of pounds to underwrite new nuclear power are just plain foolish. Worse still, every pound wasted on polluting gas or nuclear means a pound less on encouraging energy saving and supporting more clean renewables.”

Double-dip recession officially erased

Britain’s double-dip recession was erased from history yesterday after widespread revisions to official data.

The Office for National Statistics (ONS) said the nine-month contraction at the end of 2011 and beginning of 2012 never happened thanks to a stronger-than-reported performance from the construction sector in the first quarter of last year.

But the ONS revealed the initial recession following the financial crisis was far worse than first feared, with gross domestic product (GDP) now estimated to have plunged by 7.2 per cent from peak to trough, against a 6.3 per cent fall previously recorded.

The steeper 2008-09 recession means that the British economy is now even further behind its pre-crisis level, according to the ONS.

GDP is now 3.9 per cent lower than its peak in the first quarter of 2008 – previously it was estimated to be 2.6 per cent below.

Vicky Redwood, chief UK economist at consultancy Capital Economics, said: “Of course, more relevant are the timelier indications that the economy has continued to gather momentum in the last few weeks.

“However, the detail on first quarter 2013 GDP provides further reason to be cautious about assuming a strong recovery is getting under way.”

She added that incoming Bank of England governor Mark Carney may still need to take action to boost the economy after he takes the helm next Monday.