Posts Tagged ‘investment’

A yes for Scotland, a no for renewables?

Posted on: by Chas Arya

By Ratio Law’s Stuart Stones 

With only a couple of weeks before Scots vote on whether they want to stay united with the rest of Britain or become an independent nation, both supporters and critics of the ‘yes’ campaign are voicing their views. There is a lot of discussion about what impact an independent Scotland would have on business in general, however what has particularly caught my eye is the debate around how it would affect the renewables market.

Scotland has an extremely prosperous renewable industry, boasting 25 per cent of Europe’s offshore wind resources and an estimated 25 per cent of its tidal potential. Scotland has set itself the ambitious target of generating the equivalent of 100 per cent of gross annual electricity consumption through renewable energy by 2020, and it was recently announced the amount of heat generated by renewable sources in Scotland grew by 17 per cent last year.

Should Scotland go independent, the rest of the UK would have to work hard to meet its EU commitments to reduce carbon emissions by 20 per cent by 2020. But while some may think this is the main reason why critics of the yes campaign are standing against it, there are other factors to bear in mind.

If Scotland wants to truly establish itself as an international leader in green energy, it needs to secure funding to finance new projects and the new technology to drive them. However, there has also been a lot of uncertainty for potential investors, with a report by Citigroup urging “extreme caution” over investing in Scottish renewables. Even before the vote takes place, with such uncertainty around the future of the country and how it will ensure investments are secure, a lot of potential investors may have already been put off parting with their cash.

Finally, cost is always, unsurprisingly, a key consideration with any business issue. At the moment, a third of the UK’s renewable subsidy goes to Scotland, but Scots only contribute one tenth of the cost. It has been estimated that if Scotland goes independent, and subsequently loses this financial support, it could increase household energy bills by as much as £189 a year by 2020. Businesses wouldn’t be exempt from price increases either, with a medium-sized manufacturer expected to see bills rise by as much as £608,000 per annum.

A lot still remains unclear in terms of how Scotland will ensure it keeps bills affordable for consumers and businesses, and how it will encourage investors to spend. While Scotland has an abundance of renewable energy sources, it remains to be seen if it has the ability and gravitas to manage international relationships, secure investments and drive the market forward.

Regardless of whether Scotland goes independent or not, if the whole UK cannot work together to build a powerful, sustainable and effective renewable market then it risks missing out all together on some of the exciting opportunities available in the market.

 

Checkmate: Onshore wind farms are the latest political pawns

Posted on: by Chas Arya

By Stuart Stones

Wind turbines, it appears, are being used as pawns in the latest political battle. But could using renewable energy as a means to win votes be dangerous to the UK’s energy market?

Back in December, it was announced there would be big changes to how subsidies are allocated to renewable energy. The plan was to cut support for onshore wind and solar energy, which the government argued had already received their fare share of finance, in favour of greater support for offshore wind power, in the hope of attracting more long-term investments.

Now, it has been reported David Cameron may go into the next election with promises to “eradicate” onshore wind farms. A source told The Daily Telegraph the Prime Minister could pledge to cap the number of wind farms and change planning rules to make them more difficult to build, as well as cut financial support further.

Some believe the Conservatives’ strong stance on onshore wind farms is to appease Tory MPs who are unhappy about wind farms being built in their constituencies, while others think it is an attempt to save losing votes to UKIP, which opposes them.

However, the Liberal Democrats appear to be standing their ground on green policies, after it was revealed Nick Clegg had stopped the introduction of a moratorium on building new wind farms. A source, reported in the same article, said: “Clegg was simply not going to allow the Tories to move the goalposts on green energy again. Some sort of crude block towards onshore wind would seriously damage investor confidence in Britain’s energy markets. It would be a double whammy – bad for British business and for the environment.”

So who has the next move?

Unsurprisingly, spokespeople from the industry have started voicing their concerns, with RenewableUK deputy chief executive Maf Smith declaring: “Mr Cameron needs to act firmly and stop some of his MPs using wind energy as a football in their short-term playground politics.”

Scottish Renewables chief executive Niall Stuart has also spoken out highlighting the benefits of onshore wind farms. He said: “In Scotland alone the industry supports almost 3,400 jobs, with many more dependent on the sector. More than £1bn was invested in 2013, with much more to come…Almost half of the power generated in Scotland last year came from renewable sources, with onshore wind making up 65% of that.”

Reports of cut subsidies, stricter planning rules and attempts to limit onshore wind farms will undoubtedly unsettle an already fragile market and could well put off future investors. Going head to head with opposing views on wind turbines is a precarious game. It is detrimental to our green economy, threatens thousands of jobs and puts us way behind some of our European counterparts.

The parties need to think carefully about their next moves and show businesses and consumers alike how they have considered the country’s long term energy needs and how these are going to be funded.

For more information and advice on renewables and energy law, please contact Stuart Stones on 0161 464 9540, or by email: stuart.stones@ratiolaw.co.uk.