Guide to UK Government’s Energy Agenda

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CISSIE LIU, Public Affairs Co-operative’s graduate intern from the University of Edinburgh’s Master of Public Policy Programme looks at how the new Conservative Government is approaching the issue of energy policy.

THE Queen’s Speech heightened fears that David Cameron’s Conservative Government has renewable energy in its sights. Nicola Sturgeon, Scotland’s First Minister, reacted by urging Westminster to consult devolved administrations more widely on energy policy and by demanding a veto on any change to wind power subsidies. If ‘uncertainty is the new certainty’, nowhere is this more true than for renewable energy.  Public Affairs Co-operative looks at the post-election landscape.

 

A Conservative majority Commons

Amber Rudd is the first Conservative Secretary of State for Energy and Climate Change since 1997. On May 27, 2015, she announced that the new Energy Bill will transfer consenting powers in relation to onshore wind to local planning authorities. The new Secretary of State declared, “It’s right that local people should have the power to decide whether they want a wind farm in their area. We’re devolving powers out of Whitehall.”

The Conservative Party manifesto emphasised security of supply, encouraging record levels of investment into North Sea oil and gas and further development of shale gas. Investments will be channelled towards nuclear, shale gas and oil projects.

Feed in Tariffs (FITs) and Renewable Obligation (RO) schemes, well-established subsidy tools to accelerate onshore wind farm development, will be abolished. However, the government has promised significant  funding for new renewable technologies that clearly represent value for money. The interpretation of “significant” is to be determined.

The Conservatives have identified security and affordability as its overarching energy themes. However, there was no specific mention of Britain’s 2020 renewables target, nor consideration of updating Britain’s antiquated electricity grid.

The death of 2020 targets & renewables?

David Cameron has called for an end to new public subsidies for wind farms. However  subsidies for other renewables, such as solar and hydro are expected to remain. The Conservatives cite lack of public support for onshore wind farms and question if they are able to provide the consistent and stable energy generation the UK national grid requires to meet demand for energy from business and homes.

The UK renewable energy industry attracted £10.7 bn in capital investments in 2014. Solar power accounted for £4.5 bn of that investment.  The Conservatives are pushing to expand offshore wind investment but growth in that part of the renewable energy sector may slow down due to government policy interventions. Uncertainty in investment with the removal of FITs and RO certificates will increase difficulty in attracting investors for onshore windfarms.

British Wind and RenewableUK have criticised Cameron’s plans for early termination of RO certificates, insisted that policy ignores consistently high level of support for onshore wind amongst British voters.

The industry bodies say onshore wind is currently the cheapest form of renewable energy, the UK Government’s policy would increase the costs of decarbonising the power sector in Britain. Without reasonable grace periods, large-scale renewable infrastructure projects would have difficulty moving forward. RenewableUK have threatened legal action over subsidies.

Representing most of the seats in Scotland, the SNP will fight the UK Government’s plans to slash subsidies for onshore wind. The Scottish Government is well aware that the wind energy sector employs over 3,000 people in Scotland and is growing.  The SNP is committed to supporting a moratorium on fracking activity and will be pressuring the UK government to achieve its low carbon goals. SNP MPs are likely to be key advocates for renewable energy at Westminster.

While not all Conservative plans are known, it looks like prospects for renewable energy developers are going to be hard in the next five years particularly those seeking to build new schemes in England.  Pro-renewable campaigners will put pressure on the Government to achieve its 2020 low carbon targets and will also highlight jobs under threat from Government policies aimed at blocking onshore wind farms.  How much impact they will have remains to be seen.

Opportunities

Gas use in the UK has been falling since 2005.  With North Sea supplies rapidly depleting, Britain’s commitments under European Union targets will create pressures for the Conservative Government to deliver their low carbon goals. The Conservatives want to triple renewable energy generation in the UK, which is currently at 19%, and have committed to providing £1 billion for improved carbon capture and storage facilities.

In England & Wales large scale wind farm applications (those over 50MW) are currently determined by Amber Rudd MP as Secretary of State for Energy and Climate Change.  The Energy Bill will see consenting powers in relation to onshore wind transferring to local planning authorities.  The UK Government believes this measure will make decisions on energy more democratic and give communities a direct say on these planning decisions that they do not currently have.

The impact such a significant change to energy consents in England & Wales remains to be seen.  It is likely that developers of large scale wind farm applications will have to consider greater levels of community engagement to secure support.  More scheme may also include a community-owned element.  This would link with the UK Government policy aim to make it easier for local communities to invest in social enterprises.

An important question will be how communities in Scotland will react to this strengthening of local decision making for wind farm developments.  Planning policy is devolved so it would be up to the Scottish Government if it wants to follow suit.  Should Nicola Sturgeon reject such an approach for Scotland it is an issue that might arise in rural constituencies during next year’s Holyrood election campaign,

For wind farm developers across the UK, community-owned wind farms may be the new favoured direction. These smaller scale projects can make significant contributions not only to the communities they serve, but the UK Renewables economy as well.

An example of a successful community energy project was established by Heartland Community Wind earlier this year. These two farm scale wind turbines will be located near Aberfeldy in Perthshire.  The aim is for them to be 100% owned by its members, whose profits will provide a scholarship fund for local students to attend Perth College UHI.

Communities have successfully developed a number of other renewable energy projects with good examples Dingwall and on the Isle of Lewis.  Developers should take heed however that early community engagement is necessary to ensure success.

The UK government says it will continue to consider wind turbine applications until 2020. For onshore wind developers, community wind farms may be the road less travelled for many developers, but it is one that seems most effective and promising, considering subsidy cut-off is not instantaneous, and the Conservatives’ promise to increase support in social investment and enterprise. Change in the subsidy environment calls for developers and communities to think outside the box and consider community renewable projects as a new means of achieving low carbon goals and empowering Scottish communities.