Scottish renewables get a £103 million funding boost

Cash freed up after a years of wrangling between Holyrood and the Treasury has been unveiled this week as a new £103 million fund for Scottish renewable energy.

The Renewable Energy Investment Fund (REIF) will be targeted primarily at marine renewables and renewable district heating.

The Scottish government said the REIF will complement existing public and private sector finance in Scotland, with loan guarantees and equity finance with co-investment partners.

Scotland’s First Minister Alex Salmond said the fund would help “key areas of the renewables sector where specific funding gaps have been identified”.

The REIF cash comes from funds that had accumulated since the 2002 launch of the Scottish Renewables Obligation which has run alongside an existing green subsidy, the Fossil Fuel Levy generating a surplus of £206 million by November last year. The Scottish Nationalists had long argued the cash belonged to Scotland while the Treasury countered that its release would be offset by a matching deduction from Scotland’s budget.

The Coalition government struck a compromise last November whereby Scotland got half of the surplus with no decrease in its budget while the rest went to the UK Green Investment Bank. The surplus is expected to continue to grow over the next couple of years by another £40 million which will be split between the governments either side of the border.

In an additional boost for the Scottish renewable sector, a new steering group will be created to look into the concerns about the speed of progress of renewable projects on the Scottish islands.

Secretary of state for energy and climate change Ed Davey today announced, in conjunction with the Scottish Government, that the group will inform a study of the issues that are holding up the development of wind and marine development.

Salmond also unveiled plans to help set up an expert advisory group to help renewable projects pitch for funds from the Green Investment Bank.