Renewable energy firms are at risk of “shutting up shop altogether” as a
result of the early withdrawal of government subsidies, a Westminster
committee has been told.
Scottish Renewables, which represents the sector, has warned investor
confidence has already been hit by the UK Government’s decision to exclude
new onshore wind farms from a subsidy scheme from April 2016 – a year
earlier than expected.
Jenny Hogan, director of policy at Scottish Renewables, has asked the
Scottish Affairs Committee to give “full consideration” into holding an
inquiry on the matter, which she said would have a disproportionate impact
on Scotland.
The announcement that the Renewables Obligation (RO) scheme, which is
funded by levies added to household bills, would be withdrawn a year
earlier than planned could cost up to £3 billion of investment and puts at
risk 5,400 jobs which are reliant on the onshore wind sector, she said.
“Scottish Renewables is deeply concerned that the UK Government’s recent
announcements will have a disproportionate impact here, both on jobs and
investment, as well as our ability to meet our climate change target,” Ms
Hogan said.
She continued: “Is the industry safe and secure? I think the short answer
is no. The reason why we believe that is because of the way this is being
done.
“To completely take the support scheme away so quickly is avoiding the
chance for the industry to continue on its trajectory of reducing costs,
which it is doing.
“This is really just pulling the rug from under the industry’s feet.
“I can tell you on a regular basis our members and other companies are
telling us that they are having to make redundancies, some are even at risk
of shutting up shop altogether, so this is really a big concern because of
the way it’s being managed.”
Further changes, such as the UK Government’s decision to postpone the next
Contracts for Difference (CfD) auction for large renewables projects, also
mean two large projects in Scotland which have already received planning
consent are now “facing enormous uncertainty”, Ms Hogan added.
It is not known when the next allocation of the CfD scheme, which awards
subsidy contracts for green energy developers, will take place.
Ms Hogan’s appearance at the committee meeting held in Edinburgh came as
Scottish Renewables published the findings of a survey of lenders to the
renewable energy sector.
The survey targeted a sample of active onshore wind investors, asking them
about their willingness to lend to projects in the aftermath of the UK
Government’s announcement to close the subsidy scheme a year early.
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More than half of lenders who responded said they were not prepared to lend
until the UK Energy Bill had received Royal Assent, not expected until next
year.
One of the main factors was the current political and regulatory risk
concerning the Renewables Obligation.
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