EU Court Ends Salmond’s Hopes For Green Subsidies

  • Date: 04/07/14
  • Peter Jones, The Times

Alex Salmond’s hopes that the economy of an independent Scotland could rely on expanding renewable energy generation have been crippled by a European Court of Justice ruling.

The court has said that no government must pay subsidies to renewable generators in another country. The ruling removes any legal foundation for the first minister’s claim that the rest of Britain would continue to pay a subsidy — more than £500 million a year — to Scottish renewable generators for their green energy.

Pro-Union sources said that the ruling could mean higher energy bills after a “yes” vote. It also leaves the future of the industry, if there is a “yes” vote, resting on the hope of a negotiated agreement between the Scottish and British governments, which Westminster has said is unlikely.

The EU’s top court ruled this week on a complaint by Alands Vindkraft AB, the Finnish wind energy producer, that it was unfairly refused the subsidy that Sweden’s energy agency pays to all its domestic renewable generators. The court agreed with the Finnish company’s claim that this was a restraint on free trade, but said that it was legitimate. It said: “The court finds that the restriction is justified by the public interest objective of promoting the use of renewable energy sources in order to protect the environment and combat climate change.”

All renewable generators, whose power is expensive compared with existing gas, coal and nuclear-fired generation, need a subsidy to be economic. This is paid by all UK consumers, but much of the total subsidy of about £750 million that is now paid to Scottish generators comes from consumers south of the border.

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