Renewable energy policy shifts, the impending independence referendum and grid connection issues are fuelling uncertainty for Scottish developers and landowners, real estate agent and advisory firm Savills Energy, has warned
The company is warning landowners and project developers not to be caught out by shifting support regimes.
“Clarity in policy and subsidy regimes is essential for land owners, developers and the rural supply chain to secure and support future investment,” said Nick Green, head of Savills Energy in Scotland
“Coupled with the wider political context and ongoing challenge to secure grid connections in a timely and cost-effective manner, a number of renewable projects throughout Scotland have been placed on hold indefinitely or killed off entirely,” he said.
Feed-in tariff (FiT) rates will drop 10% in October and in April next year, larger solar projects will have to use the contracts for difference (CfD) scheme. According to Savills, some developers have chosen to take a “summer hiatus” until the results of the referendum on independence on 19 September, citing confusion over who would fund CfDs in an independent Scotland.
“While caution is understandable, it is important that the industry does not lose momentum. For land owners who are already on the renewable project journey, it is vital to complete as soon as possible in order to lock in to the higher FiT rates,” he added.
“We have already seen the predicted reduction in rental income from developers as a result of the transition from Renewables Obligation Certificates (ROC) to CfD. The degression mechanism will also continue, with further reductions expected in Spring 2015, assuming we meet required deployment levels in the latter half of 2014,” said Green.