Chamber and committees

In terms of the wider picture of investment into the renewables industry more generally Scottish Renewables have recently published an assessment of investment into renewables in 2011. This is based on the capacity installed in each technology multiplied by estimates of capital cost per Mega Watt. Their analysis shows projects with a total capital cost of £757.2 million were commissioned in 2011. Similar analysis for the first nine months of 2012, shows that this exceeded over £1.3 billion.

Scottish Renewables also undertook more detailed assessment of investment into offshore wind and this research shows that £164.5 million has been invested in the Scottish economy by the six companies currently developing offshore wind projects in the Scottish Renewable Energy Zone with more than one third of this investment (£63.66 million) delivered in 2012.

Projects supported by Scottish Enterprise or Highlands and Islands Enterprise develop a Monitoring and Evaluation framework, which follows Treasury Green Book approach. Overall at a programme level Scottish Enterprise and Highlands and Islands Enterprise monitor milestones that have been identified as forming the critical path to the realisation of the 28,000 jobs estimate.

A number of key milestones relate to actions which are outwith the control of Scottish Enterprise and Highlands and Islands Enterprise, such as electricity market reform, consents for site development, grid connections and financing of offshore wind projects. Scottish Enterprise and Highlands and Islands Enterprise work with a range of stakeholders to articulate the need for progress on these issues.

Applications are considered on a project by project basis and net jobs are an important factor in the socio- economic assessments conducted for each project.

The phasing of expenditure on the REIF will reflect the needs of industry and community developers. Scotland is enjoying record activity and investment in renewable energy. We exceeded our interim target to generate 31% of our energy requirement by 2011 by some 4%. Scottish renewables have shown that investment in Scotland’s renewable energy industry topped £900 million pounds in the first six months of 2012, putting it well on track to reach £1 billion over the course of the whole year.

The funding for renewable energy projects through the Renewable Energy Investment Fund has been re-profiled to reflect industry needs. In line with the overall economic strategy set out within the Draft Budget, the assessment was that the maximum benefit to the economy and jobs would be through redirecting any unused funding to alternative short term uses, such as the additional shovel ready projects announced in June and December 2012, whilst ensuring the funding will be available in the medium term when required for renewable projects.

Since launched in October 2012, there has been a good level of interest in REIF from a wide variety of sources with 95 enquiries received which have been, or are being, considered by the REIF delivery team covering all priority sectors; of these, some have been declined as being unsuitable, others are still at an early information enquiry stage. Several of these are expected to progress through to active and live projects during the course of the fund.

The fund will disburse £103 million over the spending review period; with flexibility on the annual spend to reflect industry needs. The indicative allocation for 2012 -13 was £16 million, based on the prospect of a significant investment in the marine sector. Actual spend is anticipated to be some £1.8 million.

Assessment of the economic benefit of National Renewables Infrastructure Fund will follow standard Treasury Green Book guidance.

The Renewable Energy Investment Fund was capitalised with £103 million to be distributed over the current spending review period (2012 - 2015). That is still the intention. The annual spend will reflect the needs of industry and community developers.

Scottish Enterprise and Highland and Islands Enterprise follow Treasury Green Book guidance in assessing ex ante economic benefit of investments. Each project supported has been assessed accordingly.