bto solicitors - Corporate & Commercial Business Lawyers Glasgow Edinburgh Scotland

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Early Closure of Renewables Obligation Confirmed

19 June 2015

The rumoured early closure of the Renewables Obligation (“RO”) in relation to onshore wind has been confirmed. The Department for Energy and Climate Change has advised that the subsidies for onshore wind will end on 1 April 2016, a year earlier than originally anticipated.

Strong objections from both the Scottish Government (calling for a veto on the proposals) and those involved in the industry had appeared to stay the Government’s hand over the past couple weeks. However, it seems the Government is pushing ahead with the proposals.

Nicolas McBride
Nicolas McBride, Partner

There will be a grace period offered to projects that already have planning consent, a grid connection offer and acceptance and evidence that the scheme has the right to use the land. However, with around 3,000 new onshore wind farms in the pipeline in the UK (about 70% of which are in Scotland) the impact on the onshore renewables industry will be significant. Figures quoted by Labour suggest that the announcement jeopardises 1,000 wind turbines that are awaiting planning permission and cannot make a profit without a government subsidy. Given the obvious impact in Scotland, the Scottish Government has indicated it may seek a judicial review of the decision.

Primary legislation is expected to be introduced to formalise the closure of the RO. In the meantime if you have any questions about the proposals, how they may affect your business or any other matter related to renewable energy projects, please do not hesitate to contact us.

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