Energy Prices Bill

Part of the debate – in the Scottish Parliament on 25 October 2022.

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Photo of Liam McArthur Liam McArthur Liberal Democrat

I echo the bulk of what Colin Smyth has just said in his criticism of the Energy Prices Bill and the package that has been put forward—its extent, duration and the way in which the funds are to be provided. An extension to the windfall tax on oil and gas companies’ profits was the obvious way of extending the package, instead of saddling taxpayers for years to come with additional debt.

Colin Smyth and the minister were both right to point to the fact that the UK Government’s approach appears to provide greater latitude for the development of oil and gas, which risks curbing the development of renewables. Everybody accepts that, in the current circumstances, acting with urgency is absolutely what the public expect, but at the same time—as always with emergency legislation—we must be alive to the potential unintended consequences of what has been proposed. It is in relation to one of those unintended consequences that I will focus my brief remarks.

On the cap on profits that are made by renewables developments under renewables obligation certificates and the feed-in tariffs—FIT—scheme, Community Energy Scotland highlighted to the cabinet secretary and party spokespeople earlier this week that there is potential for local communities to be inadvertently and unnecessarily hurt through the way in which the Energy Prices Bill is currently framed. Community Energy Scotland, along with its sister organisations in England and Wales, has sought an exemption for community-owned wind farms, solar farms and hydro schemes that reinvest their surplus back into communities. It seems to be a legitimately made appeal and, whatever the rationale for capping the profits of older renewable developments, the cap does not seem to serve any useful public purpose.

There is an example in my constituency that perfectly illustrates the argument. Last week, I met the chair of Hoy Energy Ltd, which runs a 900kW wind turbine generator on behalf of its parent organisation, the Island of Hoy Development Trust, which is a registered charity. HEL remits all its net profits to the development trust, which uses the income to support a community bus service, a community centre and a welfare officer, and to provide grant support for a range of other community projects. On an occasional basis, it supports education, training, school trips and so on. It is considering providing support through a separate charity for a domestic electricity generation and storage scheme, to help to reduce fuel poverty in a part of the country that endures the highest level of fuel poverty and extreme fuel poverty anywhere in Scotland or the UK.

Whatever the merits of the approach that is being taken, it seems highly unlikely that the intention is to cut across the profits of community-based developments such as on Hoy. They do not provide dividends for shareholders or profits for profits’ sake; they simply reinvest profits back into community projects for the benefit of the community or invest in repowering initiatives that prolong the life of renewables projects, providing sustained income for the community.

I hope that, even at this late stage, the minister will take the issue up with his UK counterparts on behalf of Community Energy Scotland to see whether, even at the 11th hour, some progress can be made on securing the exemption.

On the same basis that other members have already stated, the Scottish Liberal Democrats will support the LCM.