ALEX Salmond has warned that his Government's flagship policy of making Scotland dependent on renewable energy by 2020 could be scuppered by delays and uncertainty from Westminster over subsidies.
The blunt message comes amid speculation George Osborne is considering cutting renewable subsidies not by the 10% proposed in a recent consultation but by as much as 25%.
A study for the burgeoning industry recently showed that a cut of 25% in subsidies could lead to a 25% reduction in the number of onshore wind projects, many of which are in Scotland.
A major rift has broken out within the Lib-Con Coalition with Ed Davey, the Liberal Democrat Energy Secretary, believed to favour the 10% reduction while the Chancellor is said to fear that over-generous subsidies to onshore wind power will deter investment in gas-fired power stations, which he believes will offer lower electricity bills in the future.
While Scotland has just under one-tenth of the UK's electricity consumers, it receives more than one-third of the UK-wide renewables subsidy.
In a letter to Mr Davey, the First Minister said: "The continuing uncertainty surrounding the outcome of the Renewables Obligation reviews, upon which we have each consulted, risks undermining significantly our ability to meet our shared renewable energy aims."
He said last week's decision by the Department for Energy and Climate Change (DECC) to delay its review on renewable subsidies had "caused real anxiety and unrest amongst stakeholders and developers".
He stressed: "This uncertainty is wholly unnecessary, is placing investment at risk – the CBI spoke on Wednesday of millions of pounds of investment now at risk – and needs to be addressed as quickly as possible."
The First Minister said the Scottish Government's own consultation on its Renewables Obligation showed that "robust and reasoned analysis and evidence" supported a subsidy reduction for onshore wind of 10% from April 2013 or a 0.9 Renewables Obligation Certificate and that he knew of no other evidence that supported a different approach.
Mr Salmond added the Scottish Government had made its "clear statement of intent" on the renewables issue to reassure investors that its commitment to the sector remains strong. Holyrood alone has committed £200 million to renewables over the next three years.
Labour MP Tom Greatrex said: "This continued delay on subsidy because of a squabble between the Treasury and DECC is in danger of risking our commitment not just on renewables but on all low carbon generation, which does not serve the UK's interests at all well."
Niall Stuart, chief executive of Scottish Renewables, complained of the "huge uncertainty" created by the UK Government's delay in announcing the new banding of financial support for onshore wind.
"DECC has proposed to cut support for onshore wind by 10% in line with expert evidence, we've seen nothing to contradict that proposal and it is now time for the Government to make a decision so the industry can start planning for the future."
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