UK govt. asked to reconsider approach to renewable energy subsidies
Orkney Islands Council is calling for the UK Government to reconsider its approach to renewable energy subsidies following publication of “strike prices” which fall short of offering special rates for marine-based power generated on Scotland’s islands.
The Department of Energy and Climate Change consulted earlier this year on strike prices – the minimum prices developers could expect to be paid – for electricity generated from renewable sources.
The consultation included an option for a higher strike price for islands-based renewables projects – an “island uplift” – to reflect the higher costs of transmission from Scotland’s island areas.
While the strike prices announced today retain an island uplift for onshore wind projects, there is no such uplift for energy generated from wave or tidal technologies.
Convener of Orkney Islands Council, Steven Heddle, said: “We’ve invested heavily in wave and tidal infrastructure in Orkney, in anticipation of commercial-scale development.
“The Council, and others with a keen interest in maximising Orkney’s huge potential for generating energy from the seas around us, have pressed DECC on this issue over a considerable period of time. So it is highly disappointing that our calls to level the playing field for these emerging technologies seem to have been ignored.
“This latest announcement is a body blow for the timely commercial development of the wave and tidal sector in the UK, and one which destabilises the case for a vital transmission link to the mainland markets.
“It is nonsensical that one technology – onshore wind – has been granted an islands uplift, while marine-based projects have not, when transmission costs are the same regardless of the source of generation.
“Wave and tidal energy are central to the UK meeting its climate change and clean energy targets – it’s vital that strike prices reflect the added challenges of harnessing marine energy in Scotland’s islands, to ensure developers and investors are not turned back by the higher costs involved, thus losing the UK its hard won lead in this new global industry.
“We would urge the UK Government to give serious consideration to introducing and islands uplift for islands-based marine renewables, and to urgently progress grid underwriting and guarantees for island transmission links, so that the country’s greatest marine energy resources can contribute to meeting avowed national targets.”
The UK Government announcement can be found at:
Help for projects to secure funding from the Green Investment Bank
An expert team will help Scottish green energy projects secure funding from the Green Investment Bank, launched yesterday in Edinburgh.
The team, to be led by Marcia Campbell, former Group Operations Director of Standard Life, will identify and support potential Scottish bidders to make the strongest possible case for funding from the £3 billion publically funded Green Investment Bank.
The Bank will invest in offshore wind, waste management and non-domestic energy efficiency – but it will focus on projects that are ready for investor money. The group will help make sure Scottish projects are at this stage.
Launching the Scottish Green Investment Advisory Group, at the Pyramid, Loanhead, Energy Minister Fergus Ewing said Scottish projects should be first in line for funding.
Energy Minister Fergus Ewing said:
“This group will help Scottish renewable energy projects be at the front of the queue to secure funding from the Green Investment Bank – taking promising projects and helping them make sure their bid is as good as it can be”
Lord Smith of Kelvin, Chairman of the Green Investment Bank said:
“The UK Green Investment Bank were instrumental in establishing the Advisory Group concept and a number of our transaction team are already engaged with the group and working through early stage project information”
The group are already working to review 83 projects from all over Scotland.
Where insights shape the future…
Now in its third year, the Scottish Low Carbon Investment Conference 2012 is a leading international forum for emerging renewable energy and other low carbon markets. The conference takes place on the 10th and 11th of October at the EICC in Edinburgh.
This year’s high-profile speakers will include Rt Hon. Ed Davey MP, Secretary of State for Energy and Climate Change who, having been in office since February this year, will speak about delivering the UK Green Investment Bank (GIB), Electricity Market Reform (EMR) and the Green Deal.
The conference programme, detailing the agenda for both days, can now be viewed on the conference website.
Loans of up to £150,000 available to cover 95 per cent of agreed costs
Communities and rural businesses all over Scotland can now apply to a £23.5 million government loan scheme to help them get community energy renewable projects up to the planning stage.
The scheme is designed to make sure communities all over Scotland receive the maximum benefit possible from the projects it funds.
Energy Minister Fergus Ewing declared the scheme open in a speech to the Scottish Highland Renewable Energy Conference in Inverness last week.
Communities and rural businesses all over Scotland have already benefited from the loans, which are designed to help small-scale projects which directly benefit their local area, and which would not proceed without the loan.
Projects all over Scotland have already received more than £4.5 million in loans, including a Borders housing association which will use the proceeds to improve the houses it offers for rent, and a Highland charity which will become more financially sustainable thanks to a hydro scheme.
The Community and Renewable Energy Loan Scheme (CARES) is designed to support projects before they reach planning as this stage is considered too high risk for commercial loans.
Individual projects can receive loans of up to £150,000 to cover 95 per cent of agreed costs. Free local advice and support is also available.
Priority is given to projects which give the highest value of benefit to their local communities.
The scheme is open to community organisations, rural businesses and joint ventures between the two.
Alongside the scheme, Energy Minster Fergus Ewing updated on progress towards the community and locally owed target and launched the Community Benefit Register, designed to help communities all over Scotland maximise the rewards they receive from renewable energy developments, and a database of all community-owned energy resources in Scotland.
Energy Minster Fergus Ewing said:
“The Scottish Government is determined to ensure communities all over Scotland reap the benefit from renewable energy.
“We have set a target of 500 MW of community and locally owned renewable energy projects by 2020, which could be worth up to £2.4 billion to Scottish communities and rural businesses over the lifetime of those projects.
“I am delighted to announce today that we are making significant progress towards that target. The work done by the Energy Saving Trust to produce a database found as at the end of June 2011, some 147MW of capacity is operational in Scotland. This represents nearly 30 pe cent of our 2020 target.
“The CARES scheme empowers communities all over Scotland to capitalise on our Green Energy Revolution by developing their own community energy.
“They will in turn be able to take the profits from the schemes and plough them back into their own communities.
“Rural businesses who benefit from the scheme must commit to sharing their profits with local communities. All profits from the community-run schemes will remain with the communities, and all the schemes run by local businesses have committed to give a minimum of £10,000 per MW per annum to the local communities, ensuring the benefits of Scotland’s natural resources are shared with everyone, as well as the jobs and opportunities the schemes will create.
“In practice, this could mean communities have lower power bills, a new playground, a scholarship fund for young people – it is up to the imagination of local people. Communities will also be offered advice on use of the income from projects.
“Alongside this, our Community Benefit Register is now open for business. We are encouraging all scales of development to register – from single farm-based turbines upwards.
“By sharing this information and making it public, communities will be able to make sure they are getting the best possible deal.
“Scotland is blessed with astounding natural resources and has huge renewable energy potential. This Government is committed to ensuring that every community shares in the benefits. These schemes are a practical way of making that happen.”
Previous recipients of CARES loans include Barra and Vatersay Wind Energy Limited (BVWE), which is planning to erect a single wind turbine on a site at Gob Sgurabhal, the most northerly point on Barra. The community has now secured a number of their consents and are currently focused on finalising the turbine access route and progressing the proposal to financial close. It is hoped the group will be in a position to install their turbine by the end of the summer of 2012.
Reproduced under Crown Copyright – original document from the Scottish Government website
By a Newsnet reporter
In a survey carried out by the Guardian newspaper, leading renewable energy companies have revealed that fears over the commitment of the UK government to renewable energy development have led them to put billions of pounds worth of investment on hold.
Representatives of the companies say that they are either reviewing their UK investment plans, or seeking clarification from UK energy ministers on future energy policy.
However the sole bright spot in the Guardian’s survey came from Scotland, where renewable energy companies feel more confident about the support and commitment of the Scottish government. Scottish Power plans to invest almost £1 billion in renewable energy development projects. Almost all of this money will be invested in Scotland.
The fears causing renewable energy companies to rethink their plans of investing in the UK derive from the large and vocal group of Conservative MPs who are pressing the Coalition government to withdraw subsidies on wind-power generation and to tighten up the planning process to make development of wind farms more difficult. At the end of January, a group of 100 Conservative MPs signed a letter in the Telegraph newspaper calling on the UK government to slash the subsidy for on-shore wind farms.
While in opposition, David Cameron affected a pro-green stance in order to woo environmentally concerned voters. In an infamous publicity opportunity in 2006, the future PM’s office let press photographers know he’d be cycling to work in order to save energy. However behind him followed his ministerial car containing his briefcase.
Alongside the increasingly vocal demands from the Conservative back benches, the UK government has also recently been back-pedalling on the promise made by the Conservative leader prior to the 2010 general election to be the “greenest government ever” by downplaying the importance of targets to cut greenhouse gas emissions from fossil fuels and to increase the proportion of energy generated by renewables.
Some analysts and Westminster watchers, such as Guardian political correspondent Juliet Jowit, argue that the Coalition government is preparing the ground for an energy policy shift away from renewables in favour of increased investment in nuclear and gas. Nuclear power receives a higher subsidy than that received by wind generation.
The uncertainties created by Westminster policy shifts are damaging investment in the industry. Both Longannet and Peterhead Carbon Storage projects were shelved after successive Labour and Tory Governments effectively blocked the plans.
Speaking to the Guardian, the managing director of General Electric, Magued Eldaief, said that a planned £100m investment was “on hold” until UK ministers clarify future referms to the renewable energy market. He decribed the anti-wind energy statement of the Conservative MPs as a “concern”, saying: “It’s something we’re watching very closely. We would like clarity and we would like it as quickly as possible.”
Me Eldaief said: “Our investment is on hold until we have certainty and clarity regarding the policy environment that we are in. One of the most important things for us is political certainty, so we can justify the business and investment case for a facility in the UK. But we think there are some headwinds which do not help, especially in terms of the subsidies discussion.”
Even with the Scottish government’s pro-renewable stance, which recently angered Donald Trump, the full development of Scotland’s renewable energy potential depends upon financial and economic powers which are reserved to the Westminster government. The damage to investment in this sector, which is vital to the success of the Scottish economy, will lend weight to the argument that the Union does not operate in Scottish interests.
Reproduced with permission from an original article by newsnetscotland