The First Minister has written to the Prime Minister to outline her concern
at the UK Government’s decision to end the Renewables Obligation early to
highlight the impact on business and investor confidence in Scotland.
Dear David
Thank you for your recent response to my letter of 18 June concerning
support for onshore wind projects under the Renewables Obligation.
Your response touched on the grace periods proposed by the Secretary of
State for Energy to apply following the UK Government’s early removal of
previously planned support for onshore wind power under the RO.
As you know, your government’s proposed change in policy on support for
onshore wind will have a disproportionate impact on Scotland with 70 per
cent of affected developments located here. This comes despite the Scottish
Government’s support for the onshore wind sector proving popular at
successive elections in Scotland, and your plans proving unpopular. Indeed
DECC’s own polling shows support for onshore wind at 71 per cent.
Given the disproportionate impact of your new policy on Scotland, I ask
that with regard to the grace period for developments in Scotland you take
a flexible approach and ensure that all planned projects at any stage in
the planning system remain eligible.
I want also to highlight the impact on business and investor confidence,
and the comments made by the CBI regarding grace periods. As you will be
aware the CBI has made clear its concern stating: “Cutting the Renewables
Obligation scheme early sends a worrying signal about the stability of the
UK’s energy policy framework. This is a blow, not just to the industry, and
could damage our reputation as a good place to invest in energy
infrastructure.” With reference to grace periods, the CBI says: “It is
right that an appropriate grace period is put in place to account for
projects where significant investments have already been made. The
Government must now work closely with industry to get the details right.”
Given your party has traditionally prided itself on being supportive of
business; it is concerning that you are taking such an anti-business
approach on this issue.
I also wish to stress my concern about the implications of the policy for
UK leadership on climate change at this year’s crucial UN talks in Paris.
So far this year you have spoken out on climate change pledging “to
accelerate the transition to a competitive, energy efficient low carbon
economy”. You have also indicated “It is in our national interest to act
and ensure others act with us” and you have spoken of the need to get the
private sector involved, saying: “The UK is already playing its part, but
we need to do more to get the private sector involved, fostering research
and innovation into new clean energies, and supporting growth and jobs”.
However your government’s decision to cut planned support for clean green
renewable energy could not come at a worse time given the forthcoming
climate talks and shows a complete lack of leadership on climate change. It
sets an extremely bad example to other countries, will put at risk
Scotland’s renewable energy targets, and also runs counter to your
manifesto commitment to “cut emissions as cost-effectively as possible”. A
flexible approach to grace periods in Scotland would at least show
understanding of the need to provide leadership on low carbon energy in the
run up to the Paris talks.
The narrowing of electricity capacity margins to as low as zero,
highlighted by both National Grid and Ofgem in the last week, makes clear
that, from a security of supply perspective, now is not the time to halt
planned energy developments that can help keep the lights on across these
islands. This yet again strengthens the need to allow Scottish developments
to proceed.
I ask that you consider the points above and show respect for Scotland’s
position as a world leader in low carbon energy by ensuring maximum
flexibility in the grace period in Scotland.
Finally, I note that your government has now postponed an announcement on
Contracts for Difference until the autumn despite previous commitments to
publish budget information and strike prices this month. This unwarranted
delay compounds the uncertainty hanging over the entire renewables sector
and will further erode investor confidence in the UK energy market. I seek
your reassurance that both the Scottish Government and the renewables
industry is properly consulted in advance of any policy changes.
NICOLA STURGEON
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