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Fixation on fossil fuels will hurt green energy industry [Sunday Herald (Scotland)]
[May 16, 2013]

Fixation on fossil fuels will hurt green energy industry [Sunday Herald (Scotland)]


(Sunday Herald (Scotland) Via Acquire Media NewsEdge) Leaders of Scotland's renewable energy sector have hit out at last week's Budget, claiming that the Chancellor's encouragement of fossil fuels threatened to deter future investment in "deprioritsed" green energy.



Niall Stuart, chief executive of industry body Scottish Renewables, said that Budget tax breaks to the nascent shale gas industry suggested a repetition of the UK's notorious failure to support an earlier pioneering generation of wind energy, which resulted in manufacturing jobs benefits being reaped by European rivals.

"Just as oil and gas turned people's heads in 1970s, so shale gas is doing now," he said. "There are bigger economic benefits from offshore wind, but while the Treasury is quick to point out the cost of renewables and the benefits of shale gas, the fact is we need both.


"Renewables are a massive opportunity for Scotland, with the potential to supply thousands of jobs. But to progress from memoranda of understanding to investment, the investors need to know there's a market beyond 2020. If the UK Government can give that guarantee, we will have investment, and if it doesn't we will miss out on the foundries, the cable manufacturing, the suppliers of coatings, the vessels - all the support services required not only to manufacture, but install this infrastructure." Stuart continued: "Any time the Chancellor talks about energy, he waxes lyrical about the potential benefits of shale gas ... but when he talks about renewables he pauses only to point out issues about costs. Whereas the Prime Minister often does highlight the thousands of jobs that have been created in renewables and will be created in the future, with the Chancellor it's as much what he doesn't say as what he does say that makes people nervous about his commitment to renewables." Stuart's remarks were echoed by Nathan Goode, partner and head of energy, environment and sustainability at accountant Grant Thornton. He described the Budget as "somewhere between a missed opportunity and a disaster." "This was not a balanced Budget from an energy perspective," he said. "The statement confirms that the focus of this Government's energy investment strategy is perpetuating the use of fossil fuels rather than investing further in alternatives, with measures to support shale gas exploration and the development of two carbon capture and storage projects.

"It also reinforces a determination to proceed with new nuclear, and with the Chancellor's reiteration of the Hinkley Point planning consent announced last week, it seems to be a matter of when, not if, the strike price will be agreed with EDF Energy. These may be appropriate decisions in a mixed energy strategy, but the absence of any reference to renewables will be interpreted as a deprioritisation of this sector." George Osborne's comment during his Budget speech on Wednesday that "creating a low-carbon economy should be done in a way that creates jobs rather than costing them" was seen by some observers as a veiled criticism of green energy targets, which he has previously described as a "burden".

Although the Chancellor emphasised infrastructure spending in his speech, renewable energy projects such as offshore wind farms - which make up a major part of the Treasury's infrastructure pipeline - were not mentioned.

A Scottish Government spokesperson said: "The UK Budget was a missed opportunity for the Chancellor to give investors the certainty and confidence they need to invest in renewables beyond 2020.

"To maintain investment, it's vital that the Energy Bill demonstrates that the UK Government is committed to delivering a low- carbon economy in the long-term.

"We have urged the UK Government to set a decarbonisation target range on the face of the bill, or as soon as is reasonably practical after Royal Assent, rather than waiting until 2016. This would provide the much-needed certainty called for by a broad range of the industry and investor community." The Chancellor highlighted Tuesday's planning go-ahead for new nuclear reactors at Hinkley Point in Somerset, and a promise to take forward two new carbon-capture and storage (CCS) projects at Peterhead and in Yorkshire as part of the UK's pound(s)1 billion CCS competition.

The Budget also promised new incentives for the manufacture of ultra low-emission vehicles, and tax breaks for energy-intensive industries, including the ceramics industry, which will be given exemption from the climate change levy.

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