UK Government to prioritise Scottish renewable energy or 'forfeit' world-leading position in sector, trade body says

The trade body Scottish Renewables (SR) has warned the UK Government it will have to “forfeit” its position as a world leader in the renewable energy sector unless an “urgent strategy” is put in place.

A month ahead of the Autumn Statement – which will declare the government’s plans for the economy – the industry body has written to Chancellor Jeremy Hunt, outlining several measures to prevent losing investors and continue developing renewable energy technologies, including offshore wind power and hydropower.

The letter comes after the recent failure of Contracts for Difference Allocation Round 5, which did not attract any bids for offshore wind farms.

Representing more than 300 organisations in the clean energy sector, SR has also set out recommendations to level the playing field for renewable energy projects north of the border – which can help to lower bills, secure energy supply and transition to net-zero. 

The letter from SR chief executive Claire Mack reads: “High inflation and capital costs have been felt by the entire energy sector, placing significant pressure on clean energy projects and associated supply chains. 

Demanding policy reforms, the letter added: “These increased development costs are keenly felt in Scotland where offshore windfarms are 20 per cent more expensive than those in English waters due to outdated Transmission Network Use of System charges, with catastrophic future projections announced this month by the Electricity Systems Operator.” 

Last month, Morag Watson, director of policy at SR, said the reforms were “catastrophic” as it told investors that “no new projects should be built in Scotland”.

“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.

“Timely and decisive action is therefore urgently required 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,” the document continued. 

It also called for amendments to the electricity generator levy, so operators which do not make a surplus when increasing electricity prices are not taxed.

Other requests included further investment in developing Scotland’s ports to be able to accommodate offshore wind energy, as well as in pumped-storage hydropower infrastructure – which could bring up to almost £6bn for the UK economy by 2035.