Renewable energy projects shelved due to uncertainty

Published on Wednesday 1 February 2012 14:55

UNCERTAINTY surrounding energy market reform and the decision to cut subsidies for home solar panels has led to renewable energy projects being shelved, MSPs have been told.

Energy Minister Fergus Ewing said today, at Holyrood’s Energy Committee. that pre-approved projects have been put on hold.

He added that the UK Government’s fight to reduce feed-in tariff subsidies (FITs), payments made to households and communities which generate green electricity through solar panels, has also resulted in “major projects” being delayed.

Energy Secretary Chris Huhne has pledged to fight on after losing a bid in the Court of Appeal to reduce FITs on any installations completed after 12 December last year.

Mr Ewing said he has urged Mr Huhne to make an exception for solar projects in social housing.

He said: “I have particularly urged Chris Huhne to consider the case for social housing and the work being done by housing associations in Scotland along with industry to apply solar PV (photovoltaics) to social housing in Scotland.

“I think that was more complicated work. I understand from the meetings that I’ve had, and the very detailed discussions that I’ve had with a number of companies, that quite major projects were being contemplated in Scotland.

“It would be very sad indeed if those very useful projects for the most vulnerable in Scotland, or amongst the most vulnerable, can not go ahead because of this.”

Mr Ewing said he is also concerned about the “investment hiatus” by companies awaiting the outcome of the UK Government’s energy market reform programme.

He said: “I think it is just a matter of fact, it’s not a political point, to say that as long as these matters are unresolved then it’s impossible for many investors to decided whether to invest. Before they can be expected to invests hundreds, or thousands, of millions of pounds investors need to know what the ground rules are. That’s a statement of the blindingly obvious.

“The changes now which are contemplated are the biggest changes since electricity privatisation, and rightly they must be considered very carefully. But the longer it takes to reach a decision, the longer the investment uncertainty, I would suggest, is there.”

He added: “It should be mentioned that in relation to the FIT tariff, other sectors are feeling an impact.

“The hydro sector, I think, is experiencing a delay in resolving the FIT tariff, so the delay in publication of the proposed revised tariffs for other technologies is having a negative impact on a number of projects.

“I say that because a number of hydro developers have made this point to me, that they are sitting on permissions to go forward with new hydro schemes in Scotland but they can’t decide whether to expend the investment until they know what the rate of return is.”

The committee heard earlier from Charles Hendry MP, a UK energy and climate change minister, who explained why the UK Government was “forced” to reduce subsidies for home solar power.

He said: “We were faced with a situation where the number of installations were going through the roof. To look at the Scottish perspective, between July and October the number of small installations went from 2,000 to 5,000 and from October to December they went from 5,000 to 12,000.

“That was the total number of feed-in tariff installations in Scotland, 11,000 of those 12,000 were PV.

“So we had seen a massive growth rate, which was threatening to take up the entire budget for a four-year period in one year, and we needed to act because this is paid for by a charge on people’s bills.

“The changes that we made are going to save £100 million a year on people’s bills. We’re particularly aware of the fact that in Scotland people’s bills are often higher because they need to heat their homes for a longer part of the year.

“So the Scottish consumers will gain, pro-rata, more than in other parts of the UK.”

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Danielrober2

Wednesday, February 1, 2012 at 10:41 PM

There is no shame in cancelling or holding back projects until either the technology improves or the prices fall down. In the mean time insulation improvements offer jobs, utility value and reduce CO2 emissions superbly, if in a boring fashion. .......................... Temporary cancelations are the sensible choice, for the current time, as good RE opportunities can be preserved instead of wasted.

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Buford Van Stomm

Wednesday, February 1, 2012 at 03:47 PM

surely not....without subsidies it's not financially viable....this is a revelation.

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