A Scottish Government proposal to change the subsidies paid for renewable energy could halt plans for a large power station on Leith Docks.

In a consultation on the way Renewable Obligation Certificate payments for biomass power plants are calculated, the Scottish Government outlines proposals that could see large biomass fuelled plants, such as those proposed by Forth Energy in Leith, Dundee, Grangemouth and Rosyth, stripped of millions of pounds worth of public subsidy.

Calculations by environmental campaigners estimate that over a 20 year period the Leith biomass plant alone would have qualified for £800million of subsidy through the current Renewables Obligation Certificate (ROC) Scheme – even if the plant did not generate power for a fifth of the time.

The policy changes were announced by the Scottish Government a day after English subsidy proposals were announced. However, it is only the Holyrood government that has signalled that it is seriously considering cutting the subsidies for large biomass plants. 

The Scottish changes are proposed due to concerns over the economic and environmental impacts that large scale biomass fueled power plants may have, particularly if they are built in large numbers. 

A member of the No Leith Biomass campaign group Sally Millar, said: “This shows that the Scottish Government are putting their money where their mouth is and shows they are a bit bolder than the English.”

“I can’t believe that it will have no effect on the Leith biomass plant.

“Forth Energy has always said that the subsidy is important, in fact they said at a planning consultation that without it the plant would not be viable.”

She added: “If they are to generate both electricity and heat, they would have to revise their application with a firm and clear explanation about the distribution of heat, be much clearer as to who would fund this and not leave it to the tax payer.”

Ms Millar added: “Even if they did modify their planning application there are too many other reasons why the proposed biomass plant shouldn’t go ahead.”

Commenting on the consultation announced today by the Scottish Government, a spokesman from Forth Energy said: “We note that the Scottish Government ‘sees a valuable role for good quality CHP in contributing to delivery of the 2020 Renewable Heat target’. We believe that our heat and electricity plants can play a significant part in supporting the Scottish Government’s targets as part of the renewables mix.

“Forth Energy is committed to bringing low carbon, wood-fuelled heat and electricity to Scotland. Our proposals represent a reliable, secure and stable low carbon source of heat and electricity that will help to create jobs, boost the Scottish economy and provide heat both for industrial use and for homes.

“We look forward to participating in the ROC Bands Consultation process over the coming months.”

The biomass power plant proposals by Forth Energy have proven controversial. The Grangemouth plant is likely to become the subject of a lengthy public enquiry after Falkirk Councillors objected to the plant.

The larger Leith plant is currently scheduled for consideration by the City of Edinburgh council in December.