The aim of generating all of Scotland’s electricity with renewable energy by 2020 has been stalled by the economic crisis, private-sector caution, changes in UK energy policy and EU regulations, the public spending watchdog has found.
In its new report, Audit Scotland says annual increases in energy generated from renewable sources must double if they are to meet electricity targets set out by the Scottish Government.
It states: “The Scottish Government has made steady progress. However, achieving these targets will be challenging and depends on significant activity and investment by the public and private sector.”
Estimates that renewable energy will attract £30 billion of investment and 40,000 jobs to the country were described in the paper as “the most optimistic scenario”, and brought calls for better reporting of private-sector investment in projects currently with public funding.
The report said: “The least optimistic scenarios suggest that potential employment opportunities could be a third of this.”
The watchdog also found renewables projects had not progressed as quickly as expected, despite £209 million being spent on their development in the past 11 years.
The report blames the economic downturn and changes in UK energy policy for delaying spending on expansion of the sector, which includes hydroelectricity, biomass, offshore and onshore wind, marine power and biofuels. Public funding is “comparatively small”, but is intended to attract “billions of pounds of private-sector investment”, the report says.
The National Renewables Infrastructure Plan, designed to prime 11 ports and harbours for offshore wind, is estimated to need £253m by 2013-14. The £11.4m of public money spent so far has attracted £15.4m in private funding.
“The scale and rate of investment by the public and private sectors has been lower and slower than expected, owing to uncertainty over where and when the offshore wind industry intends to invest,” the report states.
Energy minister Fergus Ewing said the Scottish Government was “on course to achieve our interim target” of generating the equivalent of 50 per cent of gross electricity consumption from renewables in 2015.
But he admitted economic difficulties had stalled projects, saying: “We are responding to these market conditions by re-profiling our renewables budget so the sector can be confident of continuing support.”
Auditor General for Scotland Caroline Gardner said: “The Scottish Government needs to estimate how much public-sector funding will be needed after 2014-15 to attract private-sector investment and meet its goals for renewable energy. It also needs to start considering what its longer-term ambitions for renewable energy are after 2020.”
Richard Dixon, director of Friends of the Earth Scotland, said: “The government needs to make sure smaller, local schemes develop rather than some of the mega-schemes with dubious carbon claims which are currently proposed.”
The Audit Scotland paper comes just a week after news that the UK’s flagship Green Investment Bank, which has its headquarters in Edinburgh, has not been investing north of the Border due to a lack of profitable schemes. Only £580,000 has been invested in Scotland since the bank opened last year – all of it in one boiler scheme.