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Scotland's renewable energy industry predicts successful 2013

Renewable energy developers in Scotland are predicting a successful 2013 according to survey by Pinsent Masons, the law firm behind Out-Law.com.07 Jan 2013

84% of developers, public sector bodies, academic institutions and technology providers surveyed for the firm's new report indicated that Scotland was the most attractive UK region for investment in renewables over the next three years. The report indicated that the UK was the most likely destination for investment, with China and Germany offering the most likely alternatives.

Potential investors viewed consistent government policy as the most important factor influencing their decisions, followed by regulatory and planning issues. In addition, 70% of respondents called on the Scottish Government to provide more information about the potential impact of Scottish independence on the renewable energy market, stating that a change in Scotland's status could affect investment decisions.

"Many feared that the independence debate might dent confidence, but what the survey results suggest is not an opposition to Scottish independence, rather an illustration of the need for detail on what it would mean," energy law expert Euan McVicar of Pinsent Masons said. "Many businesses are well into their 2013/14 business planning and investment cycle and will expect more detail as soon as is feasible."

"Looking ahead to 2013, it will be interesting to see what signals the UK government puts out on renewables. Its reliance on Scottish renewables to help hit UK targets is a big issue, as is the operation of a single GB energy market," he said.

McVicar highlighted the "immense progress" that had been made on renewable energy policy by both the UK and Scottish Governments in 2012 as part of the reason for industry confidence. The survey was carried out at the Scottish Low Carbon Investment Conference in October this year, and was issued to members of the Aberdeen Renewable Energy Group.

"Significant announcements have been made on the Energy Bill, including important updates on electricity market reform and the Renewable Obligation regime," McVicar said. "In Scotland, we have seen in excess of £200 million invested into onshore wind, and the launch of the Green Investment Bank in Edinburgh will further bolster Scotland's global standing. There is every reason for confidence."

"Against that backdrop, it's important that the good work that has already been done to promote Scotland as a renewable and alternative energy 'centre of excellence' on the world stage is continued," he said. "This survey highlights the extent to which we are involved in a global race. As other nations vie for investment, the focus and energy that has been put into building Scotland's reputation must be retained into 2013."

The Government published the latest version of its Energy Bill  in November. It proposes a new system of financial incentives designed to ensure that low carbon forms of electricity generation can compete fairly in the marketplace, backed with a 'capacity market' aimed at ensuring that consumers continue to benefit from reliable electricity supplies at an affordable cost. New Feed-in Tariffs with Contracts for Difference (FiT CfDs) will replace existing subsidies such as the Renewables Obligation (RO), and will offer producers of low carbon power a guaranteed price for energy supplied to the National Grid.

The Scottish Government announced in September that it would provide certainty to onshore wind developers by guaranteeing financial support under the RO until 2017 "unless new evidence on costs emerges". Its position is different to that of the UK Government, which plans to carry out a previously unscheduled review of the costs of providing support in England and Wales in 2014. The Scottish Government is also retaining support for hydro-electric generation at current levels, rather than introduce cuts from this year as will be the case south of the border.

"High profile wrangles over the future shape of energy policy have ensured this issue is top of the agenda," energy law expert McVicar said. "We have also seen significant progress in planning issues which might have been a more significant concern in previous years. Stakeholders generally seem more willing to engage and negotiate than was the case in the past."

The SNP welcomed the report, with MSP Rob Gibson adding that the Scottish Government was "already committed" to producing 100% of the country's electricity needs from renewables by 2020.

"This report from Pinsent Masons is further evidence that Scotland has a huge financial asset in its natural resources and renewable energy potential which already employs tens of thousands of people, supporting the economy in this tough financial climate," he said.

"The growth of renewables in Scotland will mean that not only will we be able to supply our own energy needs but will have energy to sell to others. Scotland has a total estimated renewables capital investment of well over £46 billion, and will continue to create thousands of new jobs in Scotland," he said. 

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