Community energy will take brunt of subsidy cuts, warn Scotland and Wales
Community energy schemes will be hit hardest by Amber Rudd's recent energy subsidy shake-up, ministers from Scotland and Wales have warned.
Scotland Energy Minister Fergus Ewing and Wales Natural Resources Minister Carl Sargeant have co-authored an open letter to Rudd urging her to consider new ways to support community schemes.
The two ministers were particularly critical of Rudd’s move to stop the Renewables Obligation subsidy for new onshore wind projects from 1 April 2016, and her plan to scrap pre-accreditation for the Feed-in Tariff scheme which supports projects below 5MW.
Pre-accreditation essentially gives renewable energy generators a guaranteed tariff level in advance of commissioning their installation.
The letter said that community groups had less capital and were therefore more likely to be risk averse. They also have limited ability to progress projects quickly, making them more likely to be hit by Rudd’s rule changes than commercial groups.
The letter stated: “The net outcome is therefore likely to be that the remaining developments that can be funded under the Levy Control Framework will be commercial; the small scale industry will go into a hiatus until either the retail price of electricity, or advances in storage and local supply, make projects commercially viable without subsidy.”
The ministers' letter added that the Scottish and Welsh Governments could not support Rudd’s changes, based as they were “on such short-termism”.
“Given that it is likely to leave future administrations to fund the long term costs, and these economic and climate impacts lie within our devolved remits, we are very concerned about the lack of involvement in this decision”.
In a separate statement, Ewing said local ownership of renewable projects helped tackle challenges like grid constraints and fuel poverty, while at the same time sparking economic revival.
He said: “There are many communities who have invested significant amounts of money in renewables schemes and have now found the goal posts have been moved, putting crucial investment and jobs at risk.
"On the Isle of Lewis we have the largest community-owned wind farm in the UK at 9MW. This will generate around £1 million each year for the local community who will decide how to spend that money. However, potentially the future of other projects like this could be under threat as a result of the recent announcements by the UK Government, and it will be tragic if these opportunities are lost to future communities.
“We will continue to discuss with the UK Government ways that community schemes with shared ownership can be encouraged under all support schemes and in the meantime, the Scottish Government will continue to support community energy schemes using the powers available to us.”
Amber Rudd and undersecretary Lord Nick Bourne have frequently stated that the subsidy cuts are needed to drive down energy bills and protect consumers.
Full text of the letter sent to Amber Rudd