Scottish Renewables is calling on the UK government to take urgent action to maintain the country’s position as a ‘world leader’ in renewables.
In a letter to UK Chancellor Jeremy Hunt submitted in the lead up to this year’s Autumn Statement, the industry body called for an urgent strategy to address investor confidence and attractiveness in the renewables sector.
Scottish Renewables represents around 330 organisations in the clean power and heat sectors.
The letter, written by Scottish Renewables chief executive Claire Mack, also called for action on a number of specific renewable energy technologies including offshore wind and hydropower
Ms Mack said high inflation and capital costs within the energy sector are putting significant pressure on clean energy projects and associated supply chains.
“These increased development costs are keenly felt in Scotland where offshore windfarms are 20% more expensive than those in English waters due to outdated Transmission Network Use of System charges, with catastrophic future projections announced this month by the Electricity Systems Operator,” Ms Mack wrote.
“Our industry is increasingly under threat from international competition for the supply chains, financing and skilled workers needed to build a net-zero economy.
“The USA’s Inflation Reduction Act and the EU’s REPowerEU plan both have measures which are pulling critical private investments for the clean energy transition away from the UK.”
Reaching the UK government’s target of 50GW of offshore wind by 2030 will require £17 billion of private investment into the UK each year until the end of the decade, Ms Mack said.
UK “cannot afford to forfeit” early mover advantage
Ms Mack said the UK “urgently required” timely and decisive action to “create the stable policy environment essential for building long-term, international investor confidence in Scotland” and the UK’s renewable energy industry.
“Put simply, we cannot afford to forfeit the UK’s global advantage as an early mover in the race for clean, cheap energy,” she said.
The letter also called for reform to the Electricity Generator Levy, which it said was brought in as a levy on profits made when electricity prices are high, but “applied indiscriminately to companies which were not making those profits”.
Scottish Renewables also called for increased spending to upgrade Scotland’s ports to benefit from offshore wind projects.
In addition, the body also called for a “long-awaited” financial mechanism to allow the development of pumped-storage hydropower in Scotland, which it said could create almost 15,000 jobs and generate up to £5.8 billion for the UK economy by 2035.v
UK warned against ‘lagging behind’ on renewables
The letter from Scottish Renewables comes as industry leaders call for more action to ensure the UK keeps pace with global rivals in the race to secure the economic benefits of a net zero economy.
Addressing the Offshore Energies UK Decarbonisation conference in Aberdeen last week, Kent CEO John Gilly warned the country risked “lagging behind” the US, China and the European Union.
“The capability within the UK is quite staggering,” Mr Gilley said.
“The track record in terms of the technology of carbon capture, utilization and storage, of offshore wind, of green and blue hydrogen, is quite phenomenal and the actual progress that the UK has made really is world leading.
“I do worry a little bit, in terms of the kind of processes and instruments that have been put in place in other geographies like the US with (President) Biden’s Inflation Reduction Act, the work that the Chinese have done and also the financial commitments that the EU has done, and that the UK could end up lagging behind somewhat.”