While the G7 leaders have been pledging to stop using fossil fuels by 2100, we’re still waiting to hear the details of the Conservative government’s plans for renewable energy. The party’s manifesto commitment to “end any new public subsidy” for onshore wind farms does not bode well, however.
And virtually the first smoke signal issued by Amber Rudd, the new UK energy secretary, was that there could be an early end to the onshore wind subsidies paid to wind farms that have been built in previous years. This pleased many Conservative MPs and Scottish Conservatives, who were even more viscerally opposed to onshore windfarms in their election manifesto than their counterparts in other parts of the UK.
Industry, especially the electricity industry, does not want subsidies scrapped for existing or future onshore wind farms. Neither do NGOs involved in tackling climate change. Onshore wind is clearly the cheapest low-carbon form of electricity generation. With existing wind-farm owners threatening to sue and Scottish energy minister Fergus Ewing insisting that the Scottish government be consulted as a big contributor to UK wind overall, the latest reports are that the UK government has postponed an imminent announcement to consult first.
The Scottish dimension
Conservative policy certainly puts the Scottish government in a bind. On one hand it needs to pursue its green-energy targets both to protect its left flank and to appease large sections of the Scottish energy industry. On the other hand the problem exposes the Scottish government’s reliance on English money to fund renewables in Scotland.
Yet at the same time, Scottish policy is central to UK-wide EU targets for 15% of energy to be renewable by 2020 (requiring about 30% renewable electricity). Almost two-thirds of the consented (but not yet commissioned) UK windfarm capacity is sited north of the border. The Scottish government’s own target is to source the equivalent of 100% of its electricity from renewable sources by 2020. By 2014 almost 50% of Scottish electricity generation came from renewables, predominantly wind and hydroelectricity (compared to 19% for the UK).
There is now sufficient capacity either installed, under construction, or given firm premium-price contracts to reach about two-thirds of the Scottish 2020 target. But even if all of the consented Scottish onshore wind farms that are still looking for funding are also implemented, the target would still only be 90% met – meaning that the two consented offshore wind projects in the Moray Firth need to go ahead too.
Yet during and since the independence debate, the Scottish government has carefully avoided the proposition that it should be given a portion of the UK renewable funding pot to spend on low-carbon energy. The pot was capped last autumn at £200m a year, and is funded by income from the electricity bills of UK consumers.
Behind this Scottish-government reticence lurks a fear that in future, Scotland would have to fund its renewable subsidies from the pockets of Scottish electricity consumers. Given that fewer than 10% of UK consumers are in Scotland, and that more than 25% of UK renewable energy incentives have been spent on Scottish renewables, such a change could end up severely limiting future Scottish renewables deployment. This helps to explain why the Scottish government has merely demanded that it be made a statutory consultee when changes to renewable policies are being made at Westminster.
Amber gambit?
Cynics might argue that Amber Rudd’s kite-flying about seeking an early end to subsidies for onshore wind under the old renewables-obligation scheme (which ends in 2017) is to show her wind-turbine-hating Tory colleagues that, in practice, being anti-onshore-wind is not so popular. She can then disavow the kite and, ultimately, be congratulated for her munificence by announcing the continuation of a policy of funding onshore wind until 2020.
She would say that the manifesto policy of ending subsidies was only for wind farms that had not yet been given planning consent, and could roll out extra funding for new projects under the new contracts-for-difference scheme to be implemented by early 2021.
But this loses sight of the bigger challenges. These revolve around greenhouse gas reduction, where the Scottish government is already being berated for not keeping up with its targets. We need to make substantial progress towards decarbonising heat and transport, which means supplying a lot more of it through electricity. This requires green power well beyond the current 100% target.
That is because we need to encourage electric cars and also supply low-carbon heat through heat pumps and district heating, not to mention having more green power to export south of the border. It would take longer and be more expensive to do this solely through offshore wind farms. Really Scotland needs to continue to embrace onshore wind and (also in the future) ground-mounted solar photovoltaics if its targets are to be achieved speedily and economically.
A workable solution
In order to finesse away Tory opposition to future onshore wind farms in the UK, some authority over renewables financing could to be given back to the Scottish government – it has such power under the old renewables-obligation scheme, but not under contracts for difference. A compromise could emerge whereby the Scottish government took decisions over how to spend a part of the low-carbon incentives, and developers of renewables projects in Scotland could have a choice whether to fund projects out of that pot of money or the (bigger) Westminster fund.
Of course Scottish Renewables, the industry association, would be worried about how such legislation is drafted, fearing that here may be a drift towards stopping Scottish schemes being funded at all by Westminster. But provided it is drafted correctly, the Scottish government’s new statutory rights of consultation would most likely be a barrier to any slippage. This would mean that the UK’s policy of reducing carbon emissions could be defended at least in Scotland, if not in England and Wales.