THE UK government’s decision to end subsidies for a range of renewable energy sources, including solar and onshore wind, has been highly contentious, provoking anger from the industry, environmental campaigners, including former US vice president Al Gore, and from the SNP government in Scotland.
The UK government had set a £7.6bn cap on the renewable energy subsidy spending up until 2020. Last summer, however, the Department of Energy and Climate Change estimated that wind and solar projects had been built at such a rate that the figure would rise to £9.1bn, costing consumers an additional £18 on their bills in that period.
Coupled with the prospect of higher energy bills for consumers, the Conservatives have also pointed to a lack of public support of onshore windfarms which underpins their decision to proceed with the policy. The UK energy minister, Amber Rudd, speaking at last month’s Conservative party conference in Manchester, declared that her support for the cut in subsidies was due to her being a “proud green Conservative” who is “on the side of the consumer”. She also announced that it was time to shift subsidies from onshore wind, which in her view is now self-supporting, to other less developed technologies. Although we await clarification on what these alternatives are, shale gas is likely to emerge as a key player with government efforts already under way to encourage new gas power plants to be “shale gas ready”.
This development in conjunction with the renewables subsidy cuts has been perceived by many as akin to cutting Scotland adrift from the overall UK energy policy. While there’s a lack of detailed alternatives coming from the UK government to date, we’ve also seen little substance beyond some strategic posturing from the SNP. Scottish energy minister Fergus Ewing has suggested the possibility of a judicial review on the matter, which was made substantially more difficult by the UK government’s proposal to introduce the policy through primary legislation, which would necessitate an appeal to the European Union on specific grounds.
While Scottish ministers continue to voice their opposition, the current circumstances present them with a challenge on whether and how Scotland could progress with its own energy policy. In a nation with a long history of individual innovation, invention and pioneering, there is surely an opportunity for the Scottish Government to implement measures that would enable it to deliver on its goal of creating a robust, widespread, efficient and profitable renewables sector.
Of course, setting its own energy agenda requires significant resources and would also rely on major investment. There are, however, a number of areas which Scotland could look at in the short term in developing such a strategy.
Most obvious is the potential for further development of offshore renewables, incorporating Scotland’s world-leading skills and knowledge in the oil and gas sector to facilitate further growth. If support is not viable through a subsidy mechanism, then perhaps tax breaks would encourage progress here.
The Scottish Government has the opportunity to think outside the box in terms of how it can support priority energy projects. These projects are initially capital intensive with no return until electricity is actually being generated, which can take years. Developers would welcome support in the early stages of a project, perhaps achieved through a series of government provided loans – interest free or discounted – which could assist in the testing and consenting phases.
Planning is another area where the Scottish Government could make a significant impact. Earlier intervention to speed up the planning and consenting regimes of qualifying projects could serve as a real incentive to potential investors who are vital in the ongoing development of Scotland’s energy sector.
If the Scottish Government takes this opportunity to develop an innovative energy policy, going forward, Scotland’s renewable energy output could complement the UK government’s focus on shale gas and nuclear energy to ensure the lights stay on on both sides of the Border. «