Scotland’s geography and natural resources, combined with supportive policies at Holyrood and Westminster, have enabled the renewable energy sector in Scotland to grow significantly over the last decade. In 2014, Scotland produced 29 per cent of the UK’s renewable electricity and Scotland is now responsible for more than 60 per cent of onshore wind capacity (and more than 40 per cent of all wind capacity), 85 per cent of wave and tidal capacity and more than 85 per cent of hydro capacity. Not only are we the Saudi Arabia of renewable energy we are practically the whole of Opec.
Scotland’s renewable sector is world class and an increasingly important and key part of Scotland’s economy. It provides employment for some 21,000 people and it delivers more than £1 billion a year in investment. It is an incredible success story and the growth of the sector has led to a massive increase in economic activity in large swathes of rural Scotland.
More than that it is a sector that helps both Scotland and the UK meet carbon emission targets. Around a quarter of the UK’s carbon emissions are produced by generating electricity and there are challenging targets, at a Scottish, UK and international level for combatting climate change by reducing carbon emissions. Scotland more than pulls its weight in helping the UK meet its emission targets and obligations.
One would think that with this massive success story everything would be done to ensure this growth continued and investment increased to ensure Scottish renewables meet their full potential. Instead, almost inexplicably, the Westminster Government has decided to put the breaks on this sector and without any consultation have ended key levers of financial support leading to widespread uncertainty that could threaten the industry’s prospects for further growth.
I remember being in Westminster last year when the statement was made that the UK Government would be ending the Renewable Obligation support for onshore wind and Solar PV a year earlier than planned. This, combined with reducing the level of support available through the Feed-in-Tarif scheme and delaying the next round of Contracts for Difference meant you could almost feel the tremors of uncertainty in the sector emanating from investors.
This was notionally done to save money to the bill payer but littered all the way through the statements was an apparent inbuilt hostility to some renewable technologies, particularly onshore wind. In our inquiry we tried to understand what informed this Westminster Government hostility and tried to explore with Government the tension behind its professed support for meeting climate change targets and the diminishing support for renewable technologies. This contrasted sharply with what we heard from the Scottish Government which continues to see our renewable sector as a massive asset to Scotland that is to be properly supported to allow it to develop. The lack of consultation with the Scottish Government (a government charged with ensuring Scotland meets its own carbon emission targets) is something the Committee found particularly unsatisfactory.
The changes in Westminster Government policy will disproportionately fall on Scotland because we possess the lion’s share of renewable resources. Scottish Renewables told us the early closure of the Renewables Obligation to onshore wind will cost Scotland up to £3bn in lost investment and put 5,400 jobs at risk.
As part of our inquiry we also travelled to Orkney to find a group of islands more than self-sufficient in renewable electricity supply. Some of the best natural resources for generating renewable electricity are found on the Scottish Islands, but they are hampered by prohibitive connections and the transmission infrastructure whose costs can be seven times higher than the costs for a generator located in North Scotland.
Our inquiry found a successful and developing sector reeling from these government announcements and investor confidence tumbling. This combined with the almost inexplicable announcement last week to axe the Department for Energy and Climate Change suggests a government at a policy and priority crossroads about to embark down entirely the wrong road.
We therefore concluded by asking the government to review its decision to abandon its support for onshore wind. This is one of the cheapest means of generating renewable electricity, and the government’s decision to deny any further subsidy could see them in conflict with its own focus on reducing the costs of renewable technology.
Putting the breaks on a successful sector like Scotland’s renewable industry is absolutely baffling. What we need to do is to look at how we grow and develop this critical sector not pull the rug from under its feet.
SNP MP Pete Wishart is chairman of the Scottish Affairs Select Committee.
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