Scotland’s ambitious vision of meeting all demand for electricity with green energy by 2020 is being seriously undermined by the current economic climate and changes in UK energy policy, a watchdog has warned.
The Scottish Government’s policy on renewables has also been stalled by private-sector caution and EU regulations, the public spending body found.
Its 2020 target and its “optimistic” creation of 40,000 jobs are “challenging”, according to Audit Scotland, which says renewable generation would need to double to reach those levels.
Opposition politicians fear this means swathes of new wind farms will be built, although the Government insists it is already on course to hit the target.
“Scotland’s strategy for renewable energy is a good example of clear leadership and direction supported by integration across other policy areas,” Auditor General for Scotland Caroline Gardner said.
“While there are aspects the Scottish Government and other public bodies should improve, the main challenge is that private-sector investment has been slower than expected, reflecting the state of the economy and the uncertainty of developments in the wider UK energy sector.”
The report says more than £209 million of public money has been already been invested in renewable energy in Scotland since 2002, with another £264m due in the next two years.
It adds: “Uncertainty over UK energy policy, costs and reliability of renewable technology and access to the grid are deterring large-scale investors and delaying investment decisions.”
It says that, although manufacturing, engineering and utilities companies have made commitments to locate and invest in Scotland, the bulk of actual investment will not be until after 2015.
However, it says Scotland is making steady progress towards meeting its renewable energy targets for 2020, but achieving them will be challenging.
The report says the Government expects renewable energy to deliver up to £30 billion in investment and 40,000 jobs. But the least optimistic scenarios suggest that potential employment opportunities could be one-third of this.
It also warns that, while the Government expects the offshore wind industry to deliver the majority of these economic benefits, “they may not be realised as quickly as originally anticipated”.
Niall Stuart, the chief executive of Scottish Renewables, welcomed the findings. He said: “The report highlights the clear and strong energy policy from the Scottish Government, which has given the industry confidence to invest and build in Scotland, with output of renewable power doubling in the last five years as a result.
“In the last decade more than £209m of public-sector money has been invested in the renewable energy sector, while the renewables sector has invested more than £1.5bn in the Scottish economy in 2012 alone.”
Dr Sam Gardner, head of policy at WWF Scotland, added: “Scotland has the potential to be a world leader in renewable energy. Today’s report shows the Scottish Government is making clear progress towards establishing Scotland as a renewable powerhouse, which is attracting investment, cutting climate emissions and generating thousands of jobs.”
However, Scottish Conservative energy spokesman Murdo Fraser said the report highlighted the over- ambitious nature of the policy.
“The timescale is already slipping,” he said. “There are hundreds of wind farm applications which have been handed approval but yet to be built, and hundreds more in the application stage. Huge swathes of these are going to have to be pushed through if this ludicrous goal is to be reached.”
Energy minister Fergus Ewing insisted: “We are on course to achieve our interim target of generating the equivalent of 50% gross electricity consumption from renewable sources in 2015. With the uncertainty surrounding UK energy policy we are responding to these market conditions by re-profiling our renewables budget, including our flagship Renewable Energy Investment Fund, so the sector can be confident of continuing support.”
But Stuart Young of the Caithness Wind Farm Information Forum said: “This report does not question the sanity of the Scottish Government’s policy. Audit Scotland ignored the impact of developing renewable energy on energy bills. Why? It is costing £110bn for transmission upgrades to allow anyone to use this energy. But we still don’t know if anyone wants to buy it from us.”
And Scotland Against Spin said: “Audit Scotland’s gently devastating report shows the game is up for the Scottish Government’s renewable energy policy. The Scottish Government needs to stop throwing good money after bad and redo its energy policy from start.”
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