WIND farm operators could have to rely on taxpayer subsidies for another decade, the chief executive of power group Vattenfall has admitted.
However, Magnus Hall, who took the helm of the Swedish state-owned firm in October, said it was putting “real pressure” on turbine suppliers in an attempt to drive down costs.
You need time before you produce wind power without subsidies
Speaking after the UK government announced it was ending subsidies for new onshore wind farms a year earlier than expected, Hall said: “Onshore wind is probably the cheapest way of getting more renewable production on the market.
“It’s obvious to me that costs should come down for new investments, because all consumers and governments want cheaper electricity.”
He told Scotland on Sunday: “We’re committed to doing that, but you also need time before you can produce or invest in wind power totally without subsidies.”
When asked how much longer operators would be reliant on taxpayer cash, Hall said: “I think we’re probably talking ten years, but it’s also dependent on locations and how much energy we need.”
The Conservative government last week said the renewables obligation (RO) scheme, under which subsidies are paid to renewables schemes, will be closed to onshore wind farms from 1 April next year, and Hall said he had been “surprised” by the move, which the Scottish arm of the Civil Engineering Contractors Association has warned could threaten up to 3,000 full-time jobs.
Scottish energy minister Fergus Ewing described the decision as “deeply regrettable” and said it would have a disproportionate impact north of the Border, as about 70 per cent of UK onshore wind projects in the planning system are in Scotland.
The UK’s energy secretary, Amber Rudd, will meet Ewing and industry representatives later this year to hear their concerns.
Infinis, the green energy firm chaired by former SSE boss Ian Marchant, has said its 43 megawatt (mw) A’Chruach development in Argyll and the 66mw Galawhistle project in South Lanarkshire remain eligible to be built out under the existing RO regime, and Hall said that Vattenfall has a pipeline of projects in Scotland potentially worth £400 million.
The group has two onshore wind farms operating north of the Border – Edinbane on Skye, which has been running since 2010, and Clashindarroch in Aberdeenshire, which officially opened on Friday. It is also part of a consortium seeking to build a 350-mile interconnector between Peterhead and Norway in an attempt to balance renewable supply and demand.
Hall, previously the boss of Swedish papermaker Holmen, said: “Scotland has a very good wind position, so there are lots of possibilities here. The lion’s share of our onshore development is in Scotland.”
Data released by the Department of Energy & Climate Change last week showed record wind power generation in Scotland for the first three months of 2015, while almost half of all electricity used last year came from renewables.
Sam Gardner, head of policy at WWF Scotland, said: “The UK government announcement to cut support to onshore renewables earlier than planned is pulling the rug from underneath the industry at a crucial time, undermining confidence and putting future investment – and all the economic, environmental and health benefits this could bring – at risk.”
The Scottish Government wants 100 per cent of the country’s electricity needs to be met from renewables by 2020, and Hall said that target sent out a “very strong statement” to the industry.