A MAJOR scheme to unlock the green energy potential of Scotland’s islands
is at risk, industry leaders have warned, amid growing concerns the UK
Government is preparing to ditch promised subsidies.
Industry insiders have warned time is running out for the Department of
Energy and Climate Change (DECC) to clear its plans with Brussels.
At stake is investment in the Western Isles, Orkney and Shetland
potentially running into hundreds of millions of pounds.
The development of large scale wind power schemes on the islands would also
help Scotland meet ambitious green energy targets and pave the way for
future wave and tidal schemes.
A string of major wind farms on the islands have been approved but cannot
go ahead because the transmission infrastructure to export the power to the
mainland does not exist.
Previous attempts to provide extra subsidies, to allow generators to build
suitable transmission cables, have fallen foul of EU state aid rules.
Last year, Prime Minister David Cameron gave a commitment to resolve the
issue but DECC remains in talks with Brussels.
Industry insiders have been told an agreement has been reached informally
but that DECC has so far failed to make a formal bid to go ahead with the
subsidy scheme, known as the Remote Island Wind Contract for Difference (CfD).
The delay has prompted fears the UK Government is preparing to scrap the plan.
Unless a deal is struck soon, the islands will miss out on the next round
of Government-backed green power contracts.
A source said: “Our concern is that DECC no longer wants to go ahead with
this.
“The suspicion is the UK Government is looking to renege on its commitment
to find a solution and connect up the islands.”
Earlier this month, a Scottish Government report said win power could be
worth £725million to the island economies over the next 25 years.
It estimated that schemes in the Western Isles, Orkney and Shetland could
generate five per cent of total UK energy demand by 2030.
In the Western Isles alone, schemes that have already been given the
go-ahead would create 700 jobs during the construction phase and up to 150
permanent posts.
They would generate £7million a year in community benefits.
Angus Campbell, the leader of Western Isles Council, said: “We are really
concerned.
“It is highly disappointing that we’ve not been able to move this forward
in a positive way.
“If this falls through, the whole of the renewables programme in the
Western Isles will be completely lost.”
He said he feared the government was under political pressure to row back
on wind power subsidies.
Niall Stuart, chief executive of industry body Scottish Renewables, said:
“The remote island CfD was designed to overcome the massive grid charges
faced by electricity generators on Scotland’s islands, and to ensure that
renewable energy projects have a fair chance of proceeding.
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“It would be yet another blow to our industry if Government was to change
its mind at this stage, but it would be particularly damaging to the
people, companies and communities that have spent years working on major
developments that may no longer be viable.”
A DECC spokesman declined to say whether it had submitted a formal
notification to the European Commission over the remote islands scheme.
The spokesman said: “The remote islands Contract for Difference State Aid
pre-notification was submitted to the European Commission by the UK
Government in January 2015.
“We continue to engage with the European Commission on the progress of the
case.
“It would not be appropriate to discuss the details of particular
notifications while we are in discussion with the Commission.”
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