Chancellor George Osborne has today announced more than £100 million of additional funding will support Scottish renewable energy in a deal over unspent surplus cash from Scotland's energy industry.
The Chancellor made the announcement on an official visit to Nigg on the Cromarty Firth and is additional to the existing budget and spending plans of the Scottish Government.
The agreement reached between the UK and Scottish Governments will enable the Scottish Government to access and spend half of the Scottish Fossil Fuel Levy fund, which currently holds around £200 million. The remaining £100 million will be made available to support the capitalisation of the £3 billion UK-wide Green Investment Bank.
As any further funds become available in the Scottish Fossil Fuel Levy fund, they will be split equally between the two governments.
This settlement follows a review of the issue in the last Spending Review and subsequent discussions between the UK Government and the Scottish Government.
Speaking from Nigg, the Chancellor said: "Today the UK Government is making sure that it gives certainty to the
renewable sector in Scotland by providing an additional £100 million in funding.
"The UK Coalition Government is committed to creating jobs across Scotland – particularly in the green energy sector. It’s great news that we have been able to cut through the arguments and the wrangling with the Scottish Government that have stopped this money being invested in the past. It shows how serious the UK Government is in its support for Scotland’s green future."
Danny Alexander, Chief Secretary to the Treasury, added: "Scotland is a world player in renewable energy and visiting Nigg today has highlighted the potential for developing this sector even further. It has huge potential for creating jobs and driving growth over the next few years.
"I am very pleased to announce this £100 million in additional funding for the Scottish Government, which will directly help renewable and particularly marine energy development in Scotland. The UK Government is strongly committed to supporting the growth of this sector in Scotland in the long-term."
Scotland's Finance Secretary John Swinney cautiously welcomed the announcement and said: "Today's announcement, though long overdue, is welcome nonetheless. For too long Scotland's money has been sitting unspent in an Ofgem account in London.
"We have consistently pressed the UK Government to deliver a pragmatic solution that accelerates the release of funding for renewable energy projects that are ready to go now in Scotland.
"The proposal we put to the UK Government has at last broken this logjam and made over £100 million additional funding available now – vital funding to support further renewables
investment, and make the Green Investment Bank a reality for ongoing support.
"I am glad the UK Government have withdrawn their earlier entirely inadequate proposal and accepted the Scottish Government's proposal.
"Scotland has the natural renewables resources to become the green energy powerhouse of Europe using all forms of renewables including hydro, wave, tidal, onshore and offshore wind.
"This Government is doing all it can to strengthen Scotland's reputation for the development and creation of renewable energy. With access to this funding we can now do even more.
"The investment we are making in Scotland's renewables future will bring the clear benefits of developing our competitive advantage, supporting new technologies, and creating green jobs to help stimulate a strong economic recovery."
Per Hornung Pedersen, ceo of Pelamis Wave Power, said: "This extra funding is another welcomed boost for renewable technology developers. Wide scale commercial deployment of marine renewables will be delivered by substantial high-value manufacturing activity. Pelamis Wave Power are currently planning for the serial production of Pelamis wave energy machines and we welcome the confidence this sort of support brings.
"The majority of the capital expenditure involved in the manufacture of a Pelamis machine is currently spent in the UK, and all the design, fabrication, and assembly of our machines is done in Scotland – so we are well aware of the potential economic opportunity in this sector. We can develop a new export manufacturing industry while addressing our own energy needs."
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