What does an independent Scotland mean for our energy?

Photo credit: Trillion Fund.
By guest contributor Ruth Lumley
With the Scottish referendum on whether Scotland will stay in the UK or not just over a week away, the impact of a yes vote on the energy sector is being debated. Scotland has abundant renewable energy resources  with its highlands being the centre of massive investment in hydro infrastructure.
But how would their independence affect the rest of the UK’s energy mix?
The Scottish Government wants the country to generate the equivalent of 100 per cent of its annual electricity demand using only renewable sources by 2020.
Its energy targets for 2020, outlined by Energy in Scotland, includes annual renewable electricity generation being the equivalent of 100 per cent of gross annual electricity consumption. A break down of the statistics show a 10 per cent share of biofuels in transport petrol and diesel consumption, 11 per cent of heat demand to be met from renewable sources and a 12 per cent reduction in total final energy usage.
But a vote for independence could stop work on renewable power projects that support £14 billion of investments and 12,000 jobs by raising questions about how developers would get subsidies, according to Bloomberg New Energy Finance (BNEF).
Green Energy Plc, which sells electricity to almost 20,000 customers in the UK, said breaking up the union between England and Scotland in a referendum on September 18 would force the two countries to negotiate how to divide payment for electricity.
Scotland is a net exporter of electricity but at times it imports electricity from the rest of the UK.
However, it exports more electricity than it imports over the course of a year and in 2012 26.1 per cent of the electricity generated in Scotland was exported to the rest of the UK. It also has about 43 per cent of the UK’s wind power capacity.
Kieron Stopforth, an analyst at Bloomberg New Energy Finance, said: “A vote for independence would introduce regulatory uncertainty in Scotland.
“It would likely halt project developers from making final investment decisions until incentives were clarified and that would only happen after negotiations between Westminster and the Scottish government conclude. That will take at least several months.”
The Scottish Government plans to move towards a low carbon economy in Scotland, as part of the Government’s overarching Economic Strategy, and is supporting economic recovery with our 10 energy pledges.
It says it will continue to play a key role in the UK, European and World energy economy through its Saltire Prize, the Energy Policy for Europe, and its 2020 Routemap for Renewable Energy in Scotland.
It will also aim to become a global leader in developing solutions to the challenge of climate change, including an interim target of 50 per cent electricity demand equivalent from renewables by 2015 and 500 MW community and locally-owned renewable energy by 2020.
The Department of Energy and Climate Change (DECC) has said of the £34 billion of investment planned in large-scale renewable power projects from January 2012 to February 2014, about £14 billion of that was to be sited in Scotland.
The projects were funded through subsidies run by the Government in London and out of the £2 billion paid through the Renewables Obligation in the fiscal year ended in 2013, Scotland received 560 million pounds.

About 34 per cent of the UK’s renewable electricity capacity was located in Scotland at the end of 2013.
This was first published on Trillion Fund
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