Brian Wilson: SNP's plan for energy hinges on the Union

Published on Monday 11 July 2011 22:14

The Nationalists' aim of generating our electricity from renewables would make no sense in an independent Scotland

SECURITY of supply, affordability and carbon reduction - this trinity of objectives must underpin any responsible energy policy in the 21st century. Inevitably, accommodations are necessary if all three are to be respected.

At present, Scotland is setting out to break that golden rule. The policy of generating the equivalent of 100 per cent of our electricity from renewable resources guarantees us neither affordability nor security of supply; quite the reverse. Whatever the other merits of renewables, they are neither cheap nor constant.

That in itself does not make the policy wrong. Alex Salmond's commitment to "100 per cent renewables" has been widely misrepresented. He never said that Scotland would be powered solely by the forces of wind, waves and rainfall, which would be daft. The crucial word is "equivalent".

In other words, we will generate enough from renewables to meet our own needs - in theory. In practice, we will get what we need from elsewhere in order to provide the base load on which any electricity network depends. And "elsewhere" for the foreseeable future means the rest of the UK, which will continue to generate from a more balanced energy portfolio.

To put this another way, the most remarkable aspect of Mr Salmond's energy policy is not that it makes inflated claims about what renewables will deliver. It is that the whole strategy is profoundly Unionist in character. Within the single GB energy market which we currently have, it makes reasonable sense. In a separate Scotland it would make none at all.

Similarly, take the issue of transmission charging, which currently penalises the generation of electricity on the basis of distance from the markets it supplies. This is indeed discriminatory and counter-productive from the perspective of Scottish renewables. I am pretty sure that Ofgem, the energy regulator which has been investigating the issue, will finally come up with a charging regime that is much fairer to our aspirations.

However, it is only legitimate to claim discrimination when the context is a single GB market which needs Scottish renewables. If our small island was divided into two separate states and markets, there would be no reason for the rump UK to subsidise Scottish renewables in this way. It would get its low carbon electricity from whichever source was cheapest - and that would not be Scottish renewables.

More than a decade ago, we laid the foundations for a single GB market, in terms of both trading arrangements and infrastructure, precisely with the "renewables revolution" in mind. It seemed obvious that Scotland had much greater renewables potential than the rest of the UK. Yet it is the heavily populated south that needs the low-carbon power in the mix. It made sense to marry the two.Since then, it must be said, the revolution has stalled. There is so much rhetoric surrounding renewables that the reality tends to get lost. Scottish statistics are deceptive because they include the great legacy of hydro-electricity, which had absolutely nothing to do with politicians of recent origin. The rest of Scottish renewables put together is still not matching what Tom Johnston and his colleagues bequeathed us.

The most conspicuous questions relate to marine renewables, which are supposed to be the great white hope for the future. I am all in favour of investing in that possibility. But the fact is that wave and tidal still produce nothing, while the problems that have long characterised them continue to recur. I hope that proves an excessively gloomy prognosis, but you cannot build an energy policy on hope alone.

Superficially, offshore wind appears to be a no-brainer, but isn't. The technology exists but the issues of installation, maintenance and - whisper it - cost, are formidable. Anyway, most of the easier locations are in the south of England, though even there the recriminations about cost and risk are already echoing through the investment community. By the time we get to the North Atlantic, where the huge Scottish resource lies, these concerns will have multiplied.

None of this makes pursuit of renewable solutions wrong or unnecessary. The danger lies in basing a policy on the technologically and economically unproven. Even if Scotland succeeds in meeting its renewable targets, nobody has a clue what the cost might be of bringing the power ashore and to market - not me, not Alex Salmond and certainly not the consumer.

That takes me to the next point in the trinity: affordability. The Renewables Obligation, which subsidises renewables, is paid for by consumers through their energy bills. Today the average UK consumer pays about 100 a year for this and other low-carbon measures. As that figure becomes 200 or 300, at a time of rising energy bills, will it continue to be politically saleable?

But once again, these figures relate to a UK market. If Scottish consumers alone ever had to subsidise Scottish renewables generation - at current levels, never mind what is envisaged - the cost to every household in the land would be wildly unsustainable. I hope these issues will be fleshed out and costed long before we get to a referendum.

The truth is that Scotland, like the UK as a whole, would be best served by a balanced energy portfolio which does not rely principally on transporting electricity, generated at indeterminate cost, from one end of Britain to the other. That can be part of the mix, but surely not the whole solution for either Scotland's domestic needs or consumers throughout the whole country.

Mr Salmond's dogmatic decision to rule out nuclear new-build narrows the options. Again, there is no shortage of ironies. In a few years from now, keeping the lights on in Scotland will depend on the nuclear regulator extending the lifetimes of elderly nuclear stations. Yet modern, state-of-the-art replacements are banned. If this was a matter of principle rather than prejudice, surely the SNP would be demanding the urgent closure of these old stations, rather than hoping that the Nuclear Installations Inspectorate will save their bacon?Then there is the curious fact that Mr Salmond's great cheerleaders in his Scottish renewables strategy, ScottishPower and SSE, are partners (with Gaz de France) in the consortium aiming to build two new nuclear stations in Cumbria, within sight of the Solway Firth. That is a welcome piece of realism and Scotland will one day be grateful for the power generated. However, it is also on a par with Germany building new nuclear stations in Poland, which they may very well do.

With the veto on nuclear, and if Scotland is to have an energy policy rather than an elaborate stunt, the only place to go is carbon capture and storage (CCS). There are currently three projects on offer and in need of support from the European Commission's fund for supporting CCS technologies: Hunterston, which would be new-build, Longannet and oil-fired Peterhead, both requiring adaptation to CCS. We will need them all.

For politicians, the attraction of energy policy can be that the consequences of populist actions or inactions are not felt until long after they are safely gone. Scotland has to wake up to the fact that our devolved government is engaged in some very high-risk games, politically and economically, over the future of our energy supply. We need some balance and we need it soon.

• Brian Wilson is a former UK energy minister