RENEWABLE energy firms are at risk of “shutting up shop altogether” as a result of the early withdrawal of government subsidies, a Westminster committee has been told.

Scottish Renewables, which represents the sector, has warned investor confidence has already been hit by the UK Government’s decision to exclude new onshore wind farms from a subsidy scheme from April 2016 – a year earlier than expected.

Jenny Hogan, director of policy at Scottish Renewables, has asked the Scottish Affairs Committee to give “full consideration” to holding an inquiry into the matter, which she said would have a disproportionate impact on Scotland.

The announcement that the Renewables Obligation scheme, which is funded by levies added to household bills, would be withdrawn a year early could cost up to £3 billion of investment and puts at risk 5,400 jobs that are reliant on the onshore wind sector, she said.

“Scottish Renewables is deeply concerned that the UK Government’s recent announcements will have a disproportionate impact here, both on jobs and investment, as well as our ability to meet our climate change target,” Hogan said.

“Is the industry safe and secure? I think the short answer is no. The reason why we believe that is because of the way this is being done. To completely take the support scheme away so quickly is avoiding the chance for the industry to continue on its trajectory of reducing costs. This is really just pulling the rug from under the industry’s feet.

“On a regular basis our members and other companies are telling us that they are having to make redundancies, some are even at risk of shutting up shop altogether.”

Further changes, such as the UK Government’s decision to postpone the next Contracts for Difference (CfD) auction for large renewables projects, also mean two large projects in Scotland that have already received planning consent are now “facing enormous uncertainty”, Hogan added.

It is not known when the next allocation of the CfD scheme, which awards subsidy contracts for green energy developers, will take place.

Hogan’s appearance at the committee meeting came as Scottish Renewables published the findings of a survey that showed investors are reluctant to lend to the renewable energy sector. One of the main factors cited was the current political and regulatory risk concerning the Renewables Obligation.