Brian Galloway is Energy Policy Director at ScottishPower and provides some personal views on the prospects for onshore wind following recent announcements by the UK Government.
A lot has been said in recent weeks about the very damaging impact of changes to the subsidy regime for onshore wind announced by UK Secretary of State for Energy & Climate Change Amber Rudd. Of course any intervention which adversely impacts the investment climate for important and cost effective sources of low carbon generation will never be greeted by wild applause, but it is important to put these changes in context.
Firstly, the changes should not have come as a great surprise – they were well signalled in the Conservative manifesto, and the subsequent Conservative majority provides a clear mandate to implement this commitment.
Secondly, provided proper arrangements are put in place to ensure sensible grace periods as part of the Renewables Obligation closure legislation then many good, well sited renewables projects in Scotland will still be delivered as planned and the sunk investment will not be wasted.
Thirdly, recent discussions around the budgetary pressures for low carbon investment to 2020/21 under the Levy Control Framework highlight the importance in ensuring budgetary constraint and delivering value for money from energy investments. I know that there is wide recognition of this, but it is also vital that we communicate this effectively, especially at a time of such fiscal constraint across all areas of Government policy and public spending.
Whilst the consultation process between the UK Government and Scottish Ministers on the important changes to the RO might have been more deeply pursued over a longer time-frame , the subsequent debate has certainly highlighted the need for closer constructive engagement on these issues and this will hopefully lead to a better common understanding of Scotland’s energy priorities in the future.
So where does this leave onshore wind in Scotland? My view is that once the dust settles we will come to understand that onshore wind still has a vital role to play. The recent CfD auction demonstrated that the technology continues to deliver cost reduction and within a few years of further deployment could potentially reach “subsidy free” status. As the focus swings towards getting the best possible value for money, there could be a reinvigorated role for onshore wind into the 2020’s alongside other, more expensive low carbon technologies and as our energy mix evolves through to the 2030s.
Forthcoming debates around the next phase of the UK’s legally binding carbon budgets, the international climate change negotiations coming up in Paris, and the framework for EU greenhouse gas reduction targets, will also serve to highlight that we should not turn our backs on appropriately-sited onshore wind when so much remains to be done to complete the power sector’s decarbonisation journey.
Sometimes it is said that the darkest hour is just before the dawn. Current coverage of this issue paints a pretty dark picture, but I remain optimistic on the prospects for Scotland’s onshore wind industry.