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Tackling Climate Change In The New Administration - The Outlook For Renewables Post General Election

Tackling Climate Change In The New Administration - The Outlook For Renewables Post General Election

Few people in the renewable energy industry will have celebrated the Conservative victory in one of the most intriguing General Elections of recent history.  In particular, the Conservative party’s election manifesto pledged to put an end to public subsidies for onshore wind, the party have indicated their reluctance to set any additional targets for the power sector and there remains uncertainty over the UK’s long-term membership of the EU under a Conservative government.

The content of the Queen’s Speech on 27 May in terms of energy and climate change matters has been criticised, particularly by the big players in the onshore wind market. The expected announcements were made regarding an end to subsidies for new onshore wind and a change to the consenting regime in England and Wales (in terms of which  there will  no longer be a requirement for the Energy Secretary’s consent for onshore wind farms in excess of 50MW, and planning powers for wind farms will be devolved to local authorities who will be obliged to consult with local communities before a site is consented).  These changes to the planning regime will not apply in Scotland, where Scottish Ministers will retain responsibility for the consenting of 50MW+ wind farms.

That said, the appointment of Amber Rudd as the Energy and Climate Change Secretary (taking the place of Ed Davey, the Liberal Democrat who had championed the pro-renewables agenda) reflects a potential ray of light – described as “one of the few remaining green Tories” and having previously been the Parliamentary Under Secretary of State at the Department of Energy and Climate Change (DECC).  Despite the clear opposition to onshore wind, the Conservatives have indicated that support will be there for offshore wind and Ms Rudd has been quoted recently as planning to “unleash a solar revolution” (albeit this is more likely to be related to the domestic sector).

The Government have a particular dilemma to address – reconciling the ambition of being “the greenest government ever” and having to deliver the legally binding carbon reduction targets with the position the Conservatives have taken generally against renewable energy, and an election manifesto that was, in reality, the least “green” of the three main parties.  Amber Rudd’s stated ambition in the days following her appointment was “to keep the lights on and carbon emissions down, whilst saving money on energy bills”.  This will be a difficult balance to strike, but one which must see the continued support and drive for renewable energy included to achieve; in particular onshore wind, being the cheapest form of renewable electricity given the developed state of that industry.

But what of Scotland?  The SNP achieved an unprecedented result in the General Election, and are long proponents of renewable energy and the wealth of resource that Scotland has in the renewables sector.  It is quite possible that a similar outcome will come to pass at the next Scottish parliamentary elections.  The outcome of the election brings in to focus the position of the respective Administrations to renewable energy, and in particular the government subsidy support to deliver the renewable energy generation targets.

Nicola Sturgeon has already been active in making clear, following the inaugural meeting of the Scottish Energy Advisory Board, her position that the UK Government should not change public funding for onshore wind projects without agreement from the Scottish Ministers, and calling for “a new collegiate approach to policy making on energy” with Scotland.  This is borne out of the feeling that Scotland is an “energy powerhouse” but with “very little powers on energy policy”.  The swift and pointed statements seem to have been heeded by the fact that a DECC spokesman has said following the Queen’s Speech that, while the UK Government’s intention is to end subsidies for onshore wind, there will be consultation with the Scottish Government before applying the policy in Scotland.  This will certainly pose some interesting questions as to how continued subsidies in Scotland (if that is the outcome) would operate, and would be a real boost for the industry north of the border.  The position of the SNP is also echoed
in the statements coming from the main renewable energy industry body in Scotland, Scottish Renewables.

A Nationalist MP will chair the House of Commons Select Committee on climate change, and so it will be particularly interesting to see how the influence of the SNP’s position can be exerted through that avenue. There is certain to be some fierce discussion between the different sides of the table, and interesting to note the Conservatives’ favourable approach to fracking  and a significant expansion in nuclear (in contrast to the SNP stance on such policies) and how that plays out.

Grid transmission charges are a big issue; this will, no doubt, be a strong focus for any SNP Westminster contingent. Coal-fired Longannet power station recently failed to win a bid to supply back-up power to the National Grid, as a combination of high transmission charges, carbon emission charges and tighter EU air pollution requirements condemned Longannet to submit a pricey and uncompetitive bid. Whilst the 2020 renewable targets demand a gradual end to fossil fuel plants like Longannet, the Scottish Government have recognised the need (at least short term) for a mix of power generation. No doubt the SNP Westminster contingent will press for lower transmission charges which have historically been higher in Scotland reflecting the wider geographical spread that the network has to service north of the border.

It is worth noting of course that technologies other than onshore wind may see a greater level of support from the UK Government – in particular offshore wind; there remain, however, cost implications with that technology, posing challenges that the sector is endeavouring to overcome but which remains somewhat at odds with a commitment to delivering action on climate change whilst keeping consumer bills down.

Whichever course the industry now takes, one thing is  certain: it will be fascinating to observe and be part of the push to maintain the strength of the renewable energy sector (in particular in Scotland).  Whilst there are differing positions on the topic as a whole, the central message is that the UK is and has to be committed to tackling climate change and reducing carbon emissions, and the reality remains that renewable technologies (both established and emerging) have a crucial role to play in delivering that.

Neil Bruce
Associate

LChalmers