Scottish independence: Lower energy costs ‘likely’

FIVE leading academic experts today claimed that an analysis of the impact of recent UK government policy decisions on nuclear energy suggested that Scottish consumers could face lower prices in an independent Scotland.

By FRANK URQUHART Thursday, 5th December 2013, 12:15 am

The SNP is set against nuclear power plants being given planning consent on Scottish soil. Picture: Robert Perry

The experts from Aberdeen, Birmingham, Robert Gordon’s and Cardiff universities and Queen’s University Belfast have been studying the effect of new policy developments at Westminster on the Scottish renewables industry, and their effect on electricity consumers in Scotland as part of the UK or an independent Scotland.

The research project, Delivering Renewable Energy Under Devolution, is being funded by the UK’s Economic and Social Research Council and led by Dr David Toke, a Reader in Energy Politics at Aberdeen University.

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He explained today that the SNP was set against nuclear power plants being given planning consent on Scottish soil, and had ambitious targets to supply 100 per of electricity consumption in Scotland from renewable energy by 2020.

At the beginning of 2013 the group had published a paper on the prospects for renewable energy, in the context of the debate about Scottish independence, and concluded at that time was that it would likely be rather more expensive to reach the Scottish Government’s renewable energy targets in the case of an independent Scotland as opposed to Scotland remaining within the union, and this would push up electricity prices for Scottish consumers.

But since the initial paper was published there had been significant developments in UK energy policy.

As a result, he said, the experts had changed their conclusions with respect to the prospects for renewables – and consequently prices - in the case of Scottish independence where Scotland would have an independently managed and financed electricity system.

Dr Toke said: “Two new factors radically change the context of our earlier analysis. On 21 October, the UK Government announced a deal for a new twin nuclear reactor at Hinkley C, and possibly a second twin reactor at Sizewell C. This will increase prices for UK consumers for over 30 years. However this increase would not have to be paid by consumers in an independent Scottish electricity system.

“The second development is that in June the UK Government announced incentive levels and terms for renewable energy from 2017/18 as part of its Electricity Market Reform (EMR). The level of these incentives seem unlikely to support major deployment of Scottish offshore renewable resources.”

He continued: “The incentives for offshore wind and also tidal stream and wave power payable from 2018 under EMR have been significantly reduced, and they are critical for offshore wind schemes in deeper waters. If operating an independent system, Scotland would be free to set its own incentives for development of offshore and onshore renewable schemes. Furthermore the cost of these and other technologies such as solar pv is likely to reduce, while English and Welsh consumers are still paying premium prices to support the new nuclear power stations.”

Dr Toke added: “We previously argued that that, relative to remaining with the Union, Scottish Independence could substantially increase the cost to Scottish consumers of achieving its renewable energy targets. However, having reviewed the impact of the Government’s recent decisions on nuclear power and incentives for renewables, we believe that this is no longer the case.

“Moreover, the notion of Scotland having its own renewable energy support mechanism - and indeed its own electricity market arrangements - is no longer necessarily detrimental to the prospect of renewable energy in the long term. On the contrary, on the basis of the evidence we have considered, we believe that Scotland’s renewable energy programme would now benefit from having an independent electricity system and support arrangements for supporting non-fossil fuel sources of electricity.”

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