The Scottish government has slated the UK Treasury's “intransigence” for stalling on the transfer of nearly £200 million it has earmarked to invest in the region's renewable energy industry.
Scotland was last year promised it would receive a £185 million fossil fuel levy from North Sea oil by the Westminster coalition government.
But following a high-level meeting today between the Secretary of State for Energy Chris Huhne and Scotland's Finance Secretary and Energy Minister, the ruling SNP party at Holyrood has renewed its call for the cash to be released, which it wants to use to support the country's offshore power potential.
Finance Secretary John Swinney said that while the Scottish Government will continue to work with the Department of Energy and Climate Change (DECC) to reform electricity markets and secure Scotland's low carbon future, London must hand over the cash.
He added: "Chris Huhne, Jim Mather and I had a useful discussion about a range of important energy issues and I was pleased to hear that Mr Huhne shares our desire to further harness Scotland's vast renewables and clean energy potential.
"We discussed the Fossil Fuel Levy, nearly 200 million pounds of Scotland's money that is still sitting in a London bank account due to the Treasury's intransigence to release the money as additional spend on renewables for Scotland.
“I urge the UK Government to deliver a pragmatic solution that accelerates the release of funding for Scotland for renewable energy projects that are ready to go now in Scotland.
“We can and must make progress in the short term ahead of longer term solutions needed to meet the renewable energy investment gap and the investment challenge.”
Finance minister Swinney also used the meeting to highlight the need for greater investment in the infrastructure of the energy grid.
In a statement, he added: "I also raised the fact that the Western Isles interconnector was allowed to be delayed due to a combination of high transmission charges and developer liabilities. We need to fund development of grid network that can connect our Island communities and deliver renewable energy from the areas of best resource.
“The delay in the Western Isles shows again that the existing regulatory approach does not deliver the strategic long term investment the Scottish Grid needs.
"It is another example of failure in the GB electricity regulatory framework that acts as a barrier to renewable development in Scotland's communities and islands. I sought assurance from Mr Huhne that he will ensure the existing approach to locational charging - that sees generators in the areas of best renewable resource pay the highest charges for using the grid - must change. I also urged him to be prepared to apply his powers to cap transmission charging to the Western Isles. I also asked that similar consideration be given for Shetland and Orkney.
"In clean energy technologies, Scotland can become a world leader in carbon capture and storage (CCS) - we have a vast capacity in the North Sea, of European significance, to store emissions from industrial coal-fired plants for the next 200 years.
“CCS offers vast environmental and economic benefits and with our skills and energy expertise, Scotland is the natural home for a carbon capture and storage demonstrator project.
"We will continue to work closely with Scottish energy interests and with DECC to ensure Scotland can successfully become a leading low carbon economy."
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