Renewables: whither Scotland’s green revolution?
Scotland’s renewables sector is having to weather some funding storms
Wind turbines, Arnish Moor, Lewis, Western Isles - Image credit: Colin J. Campbell Photography via Flickr www.facebook.com/colinjcampbellphotography
“For the last year, I have had the dubious pleasure of shadowing Amber Rudd and Andrea Leadsom as they took the hatchet to Scotland’s renewable energy,” said SNP Westminster energy spokesperson, Calum McCaig MP at the SNP conference in October.
“Onshore wind, solar, biomass – all cut. Industries which had the potential to flourish and bring down costs substantially while cutting carbon emissions were sacrificed on the Tory altar of austerity, at the same time as we are putting billions and billions of pounds – at a much, much higher rate – into nuclear power.”
With its wealth of natural resources to generate power from, wind and water in particular, green energy is a potentially major growth area for Scotland’s economy.
A report from Ricardo Energy and Environment, commissioned by WWF Scotland, Friends of the Earth Scotland and RSPB Scotland, which was published in October, found that the most cost-effective way to meet climate targets would be to produce half of Scotland’s energy across heat, transport and electricity from renewables by 2030.
But the sector has been beset by funding problems.
The Chancellor’s recent Autumn Statement marks one year since the withdrawal of a potential £1bn UK Government investment in a flagship carbon capture and storage (CCS) facility in Peterhead.
Peterhead was one of two places in the UK bidding for the funding, with Shell and SSE behind the plans, which was a Conservative manifesto commitment for the 2015 general election.
But on 25 November 2015, the UK Government confirmed it was cancelling the previously committed funding just weeks before the final bids in the competition were due. Had it gone ahead, the funding was due to be awarded this summer.
And earlier last month, the Department of Business, Energy and Industrial Strategy published budgets for the next auction round of Contracts for Difference (CfD), which covered offshore wind, wave and tidal, but delayed access to the competition for remote islands, which the Scotland’s islands had been pinning their hopes on being included in.
The issue hinges on whether onshore wind power on the islands should be considered as a different technology from that on the mainland. The Conservatives committed to ending public subsidies for onshore wind farms in their 2015 general election manifesto, with funding to be focused on scalable technologies such as offshore wind.
In the March 2016 budget, the UK Government announced £730m of annual support for renewable electricity generation over 15 years, with £290m of annual support for the next allocation round.
The application process for the CfD allocation round will open in April 2017. The subsidy is allocated for less established technologies such as offshore wind, advanced conversion technologies, anaerobic digestion, dedicated biomass with combined heat and power, and wave, tidal stream and geothermal projects.
More mature renewables such as solar and onshore wind are excluded.
The consultation on whether onshore wind power on the Scottish islands should be treated differently from the same on the mainland and allowed access to funding for less established technologies runs until January 2017.
Comhairle nan Eilean Siar has been trying to get a meeting with Greg Clark, Secretary of State for Business, Energy and Industrial Strategy, to discuss renewable energy in the Western Isles since he was appointed in June.
Key to this was making sure the Scottish islands would be eligible for the CfD funding, which is an agreement between an energy generator and the government-owned Low Carbon Contracts Company where a fixed energy price is set, with top-ups if the market price falls below that level.
This reduces risk and provides the company with stable, predictable revenue. The other is a need for an interconnector to link the islands to the National Grid.
Western Isles council leader Angus Campbell has said renewable development on the islands could “grow rapidly” by the 2020s with the right investment in infrastructure.
“There are many issues which we would like to discuss, not least how best to realise the vast renewable opportunities we have here in the Western Isles and the need for a new interconnector,” he said.
“The Western Isles have an unrivalled wind energy resource and the local community is keen to harness that energy, both to make a secure contribution to the UK’s green energy targets and to stimulate new economic and social regeneration.
“With appropriate investment in grid infrastructure and generating assets, renewable energy development on the islands could grow rapidly by the early 2020s.”
An announcement of a CfD would be “critical” for delivery of the Prime Minister’s commitment to support renewables in the Scottish islands.
Commenting on the UK Government’s decision to delay, Campbell said: “Whilst it is obviously frustrating and very disappointing that remote island wind will not be included in the next round of Contracts for Difference, there is still an opportunity here and the Comhairle will continue to pursue the development of a renewables industry in the islands.
“Whilst this will delay matters, I am certainly determined that this will not kick the prospects for island renewables into the long grass.
“We will pursue all options that we have and we will make a robust case, again, in response to the consultation. Island renewables, given the support required, can produce the cheapest electricity for consumers from a green, secure source.
“It makes no sense not to maximise that resource for the benefit of Scotland, the UK and the islands. Our issues of fuel poverty and depopulation could be alleviated if the will of government is there to work with us on this. I call on the UK Government to let common sense prevail.
He added that the interconnector is “the key to unlocking our natural resources” and called on SSE to “stick with their plans for presenting a needs case to Ofgem so there is no further delay once the consultation on remote island wind ends in January”.
Niall Stuart, Chief Executive of Scottish Renewables, said: “We’ve waited a long time for this announcement, which signals further significant investment in the UK’s offshore wind sector.
“However, developers and communities on the Scottish remote islands will be bitterly disappointed that government has put off a decision on allowing projects on Scotland’s islands to compete for long-term contracts for renewable energy.
“After years of work on this issue, and many ministerial pledges to resolve it, we still seem no further forward to unlocking investment on Scotland’s islands – home to some of the best wind, wave and tidal resources in Europe.
“With more than 800MW of renewable capacity consented and ready to deliver and a significant capital spend going to UK-based suppliers, the island projects not only serve as important contributions to the Scottish and UK renewable energy targets but to our economy as well.
“But they can only go ahead with contracts to underpin investment and to help meet the prohibitive costs associated with connecting the islands to the National Grid.”
The current auction also had no ringfenced funding for marine, wave and tidal energy, unlike the previous auction. However, it was more positive news for offshore wind.
Stuart said: “The wave and tidal sectors are still at an incredibly early stage in their development, and simply not ready to compete with offshore wind on cost alone. If we want to continue the development of the UK’s world-leading wave and tidal sectors then we now need government to look at how it will support the development and roll-out of the technology to get it to the stage where it can compete in the future.”
He also raised concern about the fact that onshore wind and solar, as mature technologies, are excluded from any subsidies.
“The Government’s decision not to run an auction round for onshore wind and solar makes no sense given their own research shows that these technologies are on track to be the cheapest forms of electricity generation in the UK by the middle of the next decade.
“Both could make a significant contribution to meeting our future climate change targets, keeping bills down for consumers and to driving industrial activity here in the UK. But instead, they are being left in limbo, amongst the only forms of electricity generation in the UK unable to access any contractual framework to support long-term investment.”
In July, research conducted by PwC for the Solar Trade Association (STA), found that more than 12,000 jobs have been lost as a result of subsidy cuts, equalling a third of solar jobs in the UK.
And Westminster’s Scottish Affairs Committee reported in July that although progress has been made in expanding renewable energy capacity, recent cuts could cost Scotland up to £3bn in lost investment and put 5,400 jobs at risk.
However, there has been good news too, particularly in offshore wind. In July, Swedish renewable energy developer Vattenfall confirmed it will invest £300m in building Scotland’s largest offshore wind test and demonstration facility.
The European Offshore Wind Deployment Centre (EOWDC), based off the Aberdeenshire coast, will test and demonstrate cutting-edge offshore wind technology. The project is expected to be completed in spring 2018 with an operational lifespan of 20 years.
This follows developments at Levenmouth, Hunterston and Statoil’s Hywind project.
Hywind, in the Buchan Deep off Peterhead, which was licensed in November 2015, will be the largest floating offshore wind farm in the world when it’s built in 2017, while the Levenmouth offshore wind turbine in the Fife Energy Park near Methil is the world’s largest and most advanced open access offshore wind turbine for research and training.
And just last week, approval was granted for a new 400MW pumped storage hydro scheme in Glenmuckloch, Dumfries and Galloway.
Furthermore, Scotland derived 56 per cent of its electricity in 2015, exceeding its target of 50 per cent.
And in August this year, it was widely reported that for one day, Scotland had generated enough energy from wind to power itself for a day.
Admittedly, it was on a day with high winds and low usage, but it shows the potential that is there.
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