The next few months will be interesting. Amanda Rudd and Cameron have drawn a very clear line in the sand and although negotiations will take place with developers about the Grace period, I think they may find a rather cool reception. From information that we have been able to obtain it would seem that the Government has decided to stick their heals in and ride out any storm. We do know that some wind farm developers are plunging along headlong hoping to get their necks past the finishing post before the ROCs are frozen. However they are destined for a fall! The Secretary of State in her written Statement to Parliament has crossed the Ts and dotted the Is. The phraseology is pertinent. “I am proposing a grace period which would continue to give access to support under the RO to those projects which, as of today, already have planning consent, a grid connection offer and acceptance(contract) and evidence of land rights for the site on which theri project will be built. The words “as of today” draws a line in the sand. As long as this is not watered down in the primary legislation it is all over bar the shouting. Yes a lot of wind farms already have such approvals and a further 748MW on shore is sanctioned through Contracts for Difference(CfDs) but they have a time scale to commission by March 31st next year which will be challenging for some.
There was a danger in Scotland that many appeals on the Ministers desk would be rubber stamped in a fit of pique from the FM. Some of these are in Wild Lands areas.That danger seems to have been addressed. There may be legal challenges from some developers intent on suing the Westminster Government. Apparently HMG and the DECC are prepared for this and have concluded that any awards, which would be limited to costs not to future profits, will be cheaper than the alternative. However there is a buoyant mood that such challenges will fail. After all any application is purely speculative without planning permission, land rights and connectivity.
What for the future? Fergus Ewing has already come out in support of existing Nuclear at Hunterston and Toreness. Is that a tacit signal that by 2026 we may have new nuclear facilities on line or at least under construction in Scotland? Geothermal power stations may well be approved in the UK. There are five suitable areas previously identified. Fracking is going ahead and new CGT power stations are relatively quick to build. Tidal and wave, still a dream in the eyes of many, could get increased support as an out of sight, out of mind technology. Offshore wind is still very much on the agenda which must worry those in sight of Navitus Bay. But of course onshore has not gone away. Existing onshore will continue to enjoy subsidy. In Feb 2015 748MW of Onshore wind was approved through the Contracts for Difference scheme, some 250 turbines, most in Scotland. This does not form part of the Renewable Obligation scheme frozen by the Secretary of State. On farm turbines and solar still benefit from the more generous Feed in Tariff scheme although the Secretary of State implies that will be addressed later in the year. She also suggests that Community and Island schemes, where the energy is used locally, will still receive some support. Scottish Renewables have previously stated that wind can stand alone without subsidy. We may yet see some applications come forward, especially extensions to existing wind farms, which may not be due subsidy. On a mute point, if an extension is built and the generated power is fed through the existing substation how do you separate out subsidy and non subsidy energy? That could be a good wheeze for the wind farm developers! Hopefully the Grid and the DECC will be wise to that scam.
What I regret to say is that it will not put a brake on those approved, rather the opposite. There is a break period that seems to say that any wind farm not built AND operating by the 1st April 2016 will have missed the boat. We are aware of a number of large schemes that either for financial, operational or connectivity issues have not been built yet. Of course if they are held up for connection issues and no agreement is yet in place they will have failed on one of the three conditions for continuance. It does not defy logic that these will be pressed forward for construction by next April. Whilst that time scale is too tight for larger schemes it may suggest that there may be some mission creep in the period of Grace.
We won’t be seeing wind turbines falling by their thousands and carted off to the scrapyard YET, neither can we relax until April next year. However as one famous statesman is often misquoted “this may not be the end but it is the beginning of the end”