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February 8, 2012

Scottish Government cooling on community renewables?

When the Scottish Government set a target for 500MW of installed capacity to be under community ownership by 2020, even the roughest of calculations revealed the vast earning potential this represented for communities prepared to take up the challenge. And as those communities that were quickest off the mark can now appreciate, independent income on this scale can be a game changer.  However, recent proposals to alter the system of subsidy suggest that Scottish Government may becoming less interested in changing the game




COMMUNITY scale green energy projects could be put out of business by Scottish Government plans to slash subsidy support for onshore wind and hydro schemes, the SNP has been warned.  Under current proposals, subsidy levels for hydro schemes would be cut by half and for onshore wind projects by a tenth, so funds can be diverted to newer forms of renewable technology, such as wave and tidal projects.

Dozens of small-scale community-owned wind and hydro schemes are springing up, generating tens of thousands of pounds a year. However, community groups have warned in response to a government consultation that the subsidy changes would make these small-scale projects uneconomical. The Isle of Gigha was the first community in the UK to develop a grid connected, community-owned wind farm. Its three turbines, known locally as the Dancing Ladies, generate £75,000 profit each year and provide two thirds of the island’s electricity.

Lukas Lehmann, development manager for Gigha Renewable Energy, which made use of the renewables obligation system of subsidies to develop the scheme, said he had “serious concerns” about the planned reductions. It would have “a seriously detrimental impact on proposals being developed by other communities, both on other islands and on the mainland,” he said.

Like groups responding to the consultation, he thinks the subsidies should be left at existing levels for community projects up to 10 megawatts, equivalent to about five turbines. He added: “A blanket reduction for all onshore wind will have a disproportionate impact on smaller developments where unit costs are higher, and as such, will disproportionately impact upon the development of community owned schemes.”

The Scottish Government has a target of 500 megawatts of community-owned renewables schemes built, which would require hundreds of projects. Many of the 140 groups and individuals that responded to the Consultation on Review of Support Levels Under Renewables Obligation (Scotland) Legislation said achieving this target would be hampered by the subsidy change.

Mo Cloonan, charity development manager for charity Community Energy Scotland, said: “This will undermine the ability of Scotland’s communities to meet the Scottish Government’s community energy target and the ability to install sufficient renewable generation to meet government targets for renewable deployment and carbon emission reductions.”

David Stewart, policy and strategy manager at the Scottish Federation of Housing Associations, asked the Scottish Government to reconsider.

He said renewables were becoming increasingly attractive for housing associations trying to provide affordable energy and generate funds for their communities, with Berwickshire Housing Association, Fyne Homes, Grampian Housing Association, Link Group and Ore Valley all pursuing schemes.

Angela Williams, development manager of the Knoydart Foundation, which runs a community-owned hydro scheme that supplies green power to 77 properties on the Knoydart peninsula in the west Highlands, warned that if the subsidies for hydro were slashed by half it would mean “prices will increase to the extent where people will look for other non renewable sources of energy to power their homes”.

A Scottish Government spokeswoman said: “Ministers will be analysing their options over the coming weeks, and announcing their decision on changes to the ROS during the spring.”