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Crossing the Rubicon: the 2015 renewable electricity reforms and impli-cations for Scotland
On June 18th 2015, the UK put in place a number of policy amendments, signalling an intention to phase out most technology specific support schemes for low carbon energy. The reforms came seventeen years after the introduction of UK’s first renewable energy support scheme, and as many years since the UK was last under Conservative party rule. In spite of the Conservative party manifesto commitments to reduce support for some types of renewables, industry analysts were surprised at the speed and extent of the proposed changes. Within the months following the UK General Election in May 2015, the sector saw the abandonment of at least 23 large-scale projects representing around 2.7GW, including one of two carbon capture and storage projects, with crowdfunded loan providers such as the Trillion Fund halting renewable energy loans and public loan providers across the UK quitting ongoing loan negotiations. DECC stated that 7GW of onshore wind projects in planning were likely to miss the early April 2016 deadline for the expiration of the Renewable Obligation and risked being stranded, adding uncertainty as to how the UK would meet its 2020 targets., RenewableUK threatened legal action, drawing on a clause under the Levy Control Framework that stated that the government would “not make retroactive changes to support levels [in order to] maintain investor confidence”. Within months, the UK dropped out of the top ten countries in the Renewable Energy Country Attractiveness Index (RECAI). The policy shock has been sufficient to draw comments from senior commentators such as Professor Jacqueline McGlade, chief scientist of the UN’s environment programme, who argued: “What’s disappointing is when we see countries such as the United Kingdom that have really been in the lead in terms of getting their renewable energy up and going — we see subsidies being withdrawn and the fossil fuel industry being enhanced”. However, the reforms mirrored ongoing policy shocks in Spain, Italy, Germany and Denmark – all global leaders in renewable energy that have scaled back on renewable energy support as a result of a resurgent discourse around short-term competitiveness and consumer protection In Germany and Denmark alike, conservative party majorities elected in the aftermath of the financial recession provided an opportunity for dormant but long-standing opposition to public support for renewable energy to manifest itself in the form of annual caps and steeper degressions. These events highlight the formidable challenge of the renewable energy transition in reforming reigning structural-, technical- and market formations, and resulting political struggles that emerge when renewable energy deployment reaches 15-40% of total electricity supply, where it begins to challenge incumbent utilities and where fundamental market restructuring becomes necessary. In what follows, we outline the 2015 UK policy reforms and discuss the likely consequences for Scotland, focusing on renewable electricity policy. We place these events in an historical and international context, elaborate on the politics of the affordability and subsidisation of renewable energy and analyse these reforms in the context of emerging renewable energy innovation systems. Drawing on similar policy shocks in Spain, Australia and Germany, we discuss the likely implications of the 2015 policy reforms for the renewable energy industry in Scotland. Specifically, we ask whether the Scottish Government has capacity to provide public support for a sector which it has promoted so actively and review the prospects for ‘subsidy-free renewable energy’. ; In: Wood G., Baker K. (eds) A Critical Review of Scottish Renewable and Low Carbon Energy Policy. Energy, Climate and the Environment. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-56898-0_3 : 153-177.
Crossing the Rubicon: the 2015 renewable electricity reforms and impli-cations for Scotland
On June 18th 2015, the UK put in place a number of policy amendments, signalling an intention to phase out most technology specific support schemes for low carbon energy. The reforms came seventeen years after the introduction of UK’s first renewable energy support scheme, and as many years since the UK was last under Conservative party rule. In spite of the Conservative party manifesto commitments to reduce support for some types of renewables, industry analysts were surprised at the speed and extent of the proposed changes. Within the months following the UK General Election in May 2015, the sector saw the abandonment of at least 23 large-scale projects representing around 2.7GW, including one of two carbon capture and storage projects, with crowdfunded loan providers such as the Trillion Fund halting renewable energy loans and public loan providers across the UK quitting ongoing loan negotiations. DECC stated that 7GW of onshore wind projects in planning were likely to miss the early April 2016 deadline for the expiration of the Renewable Obligation and risked being stranded, adding uncertainty as to how the UK would meet its 2020 targets., RenewableUK threatened legal action, drawing on a clause under the Levy Control Framework that stated that the government would “not make retroactive changes to support levels [in order to] maintain investor confidence”. Within months, the UK dropped out of the top ten countries in the Renewable Energy Country Attractiveness Index (RECAI). The policy shock has been sufficient to draw comments from senior commentators such as Professor Jacqueline McGlade, chief scientist of the UN’s environment programme, who argued: “What’s disappointing is when we see countries such as the United Kingdom that have really been in the lead in terms of getting their renewable energy up and going — we see subsidies being withdrawn and the fossil fuel industry being enhanced”. However, the reforms mirrored ongoing policy shocks in Spain, Italy, Germany and Denmark – all global leaders in renewable energy that have scaled back on renewable energy support as a result of a resurgent discourse around short-term competitiveness and consumer protection In Germany and Denmark alike, conservative party majorities elected in the aftermath of the financial recession provided an opportunity for dormant but long-standing opposition to public support for renewable energy to manifest itself in the form of annual caps and steeper degressions. These events highlight the formidable challenge of the renewable energy transition in reforming reigning structural-, technical- and market formations, and resulting political struggles that emerge when renewable energy deployment reaches 15-40% of total electricity supply, where it begins to challenge incumbent utilities and where fundamental market restructuring becomes necessary. In what follows, we outline the 2015 UK policy reforms and discuss the likely consequences for Scotland, focusing on renewable electricity policy. We place these events in an historical and international context, elaborate on the politics of the affordability and subsidisation of renewable energy and analyse these reforms in the context of emerging renewable energy innovation systems. Drawing on similar policy shocks in Spain, Australia and Germany, we discuss the likely implications of the 2015 policy reforms for the renewable energy industry in Scotland. Specifically, we ask whether the Scottish Government has capacity to provide public support for a sector which it has promoted so actively and review the prospects for ‘subsidy-free renewable energy’. ; In: Wood G., Baker K. (eds) A Critical Review of Scottish Renewable and Low Carbon Energy Policy. Energy, Climate and the Environment. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-56898-0_3 : 153-177.
Crossing the Rubicon: the 2015 renewable electricity reforms and impli-cations for Scotland
Harnmeijer, Anna (author) / Harnmeijer, Jelte (author) / Slee, Bill (author)
2017-08-15
Article/Chapter (Book)
Electronic Resource
English
DDC:
690
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