The Scottish National Party (SNP) has warned the UK Government it could face multi-million pound compensation claims from foreign investors in the Scottish renewables sector, following its plans to axe subsidies for onshore wind projects.
In June this year, the Scottish Government energy minister Fergus Ewing warned Whitehall of the threat of a costly legal battle from companies affected if they pushed ahead with cuts to financial support for the onshore wind industry.
Legal experts Pinsent Masons have now said that international investors - who have financially backed Scottish renewables thus far - could raise a claim for compensation.
SNP energy and climate change spokesperson in the House of Commons Callum McCaig MP is writing to UK energy secretary Amber Rudd to call for her personal commitment that all projects already in the planning process are continued to be supported.
Mr McCaig said: “The possibility of legal action against them should not come as a surprise to the UK government – they were warned by the Scottish Government that this could happen if they insisted on reneging on promises to investors in Scotland’s renewables industry.
The SNP is now calling for the UK government to show maximum flexibility in the grace period for implementing their planned cut in renewable subsidies – and to support all projects already in the planning process.
Last month a motion condemning the UK Government’s ‘reckless’ decision to cut subsidies for onshore wind from the Renewables Obligation achieved cross party support in the Scottish Parliament.
The motion lodged by SNP MSP Mike Mackenzie has been signed by Liberal Democrat MSP Liam McArthur and independent MSP John Finnie.
According to the SNP, estimations show the decision to scrap the renewables obligation one year earlier than anticipated could potentially lead to a loss of up to as £3bn in investment and endangers 5,400 jobs.
Commenting, Mr Mackenzie said: “This dangerous, reckless decision from the UK Government to cut onshore subsidies funded through the Renewables Obligation could have potentially devastating effects on the industry and in communities across Scotland – which is why it is so important that Scotland speaks with one voice on this issue.”