Scottish renewables sector to get GBP 100m of funding

Nov 14, 2011 - The UK and Scottish governments have reached a deal that makes GBP 100 million (USD 161m/EUR 117m) of funding available for Scotland's renewable energy industry.

The funding is additional to the Scottish government's existing budget and was announced by chancellor George Osborne on Friday.

The deal will allow the Scottish government to spend 50% of the Scottish fossil fuel levy fund, which now holds about GBP 200 million. The other GBP 100 million will go towards the UK's GBP-3-billion Green Investment Bank. The two governments will share equally any further money that gets accumulated in the fund.

The fossil fuel levy on suppliers of electricity from non-renewable sources was introduced in Scotland in 1996. For several years it existed alongside another tax to support renewable energy, the renewables obligation, which was introduced in 2002. This produced a Scottish fossil fuel levy surplus, which currently amounts to GBP 206 million and is held by the UK energy regulator, Ofgem.

The Scottish government has long sought unrestricted access to the surplus cash raised by the levy. In last year's spending review the UK government offered to lift Green Investment Bank's spending in Scotland by minimum GBP 250 million in return for the Scottish government spending the funds generated by the levy under the condition that it cut spending elsewhere by the same sum.

(GBP 1 = USD 1.606/EUR 1.168)

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