The costs of Alex Salmond’s green energy revolution are “going through the roof” and threaten to bankrupt companies by doubling energy bills, business leaders have warned the First Minister.
The Scottish Chambers of Commerce (SCC) said electricity is currently about nine times more expensive to generate from wind farms than gas-powered plants.
Mike Salter, the SCC chairman, told the organisation’s annual dinner that Government energy experts predict greater reliance on “very expensive” renewables will lead to consumers’ electricity bills doubling.
He warned this would hold back the Scottish economy and lead to businesses going under. If this is the consequence, he questioned whether Mr Salmond’s “total commitment” to green energy is “misguided”.
In a double whammy for hard-pressed companies, he said the SNP’s decision to increase business taxes by £849 million threatens to “suck the life” from the economy.
The damning intervention came shortly after Mr Salmond was among the audience for a speech by Al Gore, the former US Vice President, at a “green finance” conference in Edinburgh.
Mr Gore said Scotland is a world leader in renewable energy, but admitted that wave and tide energy is at “an earlier stage of investigation or development”.
The First Minister has set a target that Scotland generate the equivalent of all the country’s electricity from green sources by the end of the decade, but industry experts have questioned whether this timetable is possible.
Rupert Soames, the chief executive of Aggreko, one of the country’s largest energy generators, has described the strategy as “bonkers” because it failed to recognise the “cold realities” of financing expensive new forms of green technology.
Mr Salter did not use such outspoken language but made clear to the audience, which included Mike Russell, the SNP Education Minister, and Michael Moore, the Scottish Secretary, that he shared similar concerns.
Referring to offshore wind farms, he told the dinner in Glasgow: “The costs of these projects is going through the roof.
“The Scottish government have committed to have the majority of generation coming from this very expensive source by 2020. All I say at this time is- have a care!
“If as a consequence the rest of the economy is disadvantaged then perhaps such a total commitment is misguided. Other lower cost technologies are available.”
These include nuclear energy, which Mr Salmond has discarded. Mr Salter said a recently-announced wind farm in the Irish Sea will cost £1.6 billion, 25 per cent more than projections in spring last year.
Citing Mott MacDonald, a Government energy consultancy, he said the cost of generating electricity from wind farms is approaching 19p per kilowatt hour (kWh), the unit of electrical energy.
This compares with the wholesale “spot price” of gas, which costs between 1.75p and 2p. Mr Salter said electricity currently costs consumers about 12.4p per kWh.
But Mott MacDonald estimates this will double to 25p thanks to the additional expense of wind farms and public subsidies for the renewable energy industry.
The SCC also attacked the SNP’s spending plans, announced last week, which rely on generating an extra £849 million in business rates over the next three years. The money is needed to fund populist policies, such as free bus passes for the elderly.
Mr Salter warned the tax hike would harm job creation, adding: “The balance seems to have been lost somewhere. It is fine to have a social agenda funded directly by government, but the biggest and best social agenda must be to have people gainfully employed and paying their way.
“Please! Think again before this misguided regime sucks the life out of SME (small and medium enterprises) in Scotland.”