Scottish wind farm projects 'put at risk by Government subsidy cuts'

Study says the move has had a 'significant impact on investor confidence'

Investment in Scottish wind farms has stalled after the announcement any new wind projects would be excluded from a subsidy (Getty Images)

Wind energy projects that could power 1.2 million Scottish homes have been put at risk after a cut in subsidies by the UK Government caused an "investment hiatus" in the industry, a major new report has found.

Investment in Scottish wind farms has stalled after UK ministers announced in June that any new wind projects would be excluded from a subsidy scheme for renewable energy from April 2016.

Ministers cuts the scheme after complaints, mainly from England, about the impact of wind farms on the countryside. At the time Scotland's First Minister Nicola Sturgeon said that as 70 per cent of planned wind farms are set for Scotland, the country would be disproportionately affected.

Research carried out for trade body Scottish Renewables has confirmed the fears of green campaigners after it found that investors who fund wind farms are less likely to lend capital for new projects, after the Government move had a “significant impact on investor confidence”.

More than half of the major lenders said they were not prepared to fund new wind farms until the new UK Energy Bill receives Royal Assent next year. They say the current political situation and “regulatory risk” are to blame for the delays in funding.

Michael Rieley, senior policy manager for Scottish Renewables, which commissioned EY sto carry out the study, said: “The UK Government’s decision to remove financial support for some onshore wind farms a year earlier than planned has had a clear and negative impact on the ability of developers to attract finance to their projects.

“With the decision to end support a year earlier than planned, around two gigawatts of onshore wind projects in Scotland have been put at risk. These are projects that could bring around £3 billion pounds of investment and provide enough generation to meet the equivalent electricity demand of 1.2 million Scottish homes.”

WWF Scotland director Lang Banks, said: “It’s not just investment and jobs that are at risk by [the Government’s] reckless policies, but our ability to cut carbon. Even the Government’s own analysis shows that an early ending of support for support for onshore wind could drive up power sector emissions in the UK by up to 63 million tonnes.”

A spokesperson for the Department of Energy and Climate Change in Westminster, said Government support had “driven down the cost of renewable energy significantly” and had allowed for “parts of the renewables industry to survive without subsidy.”