The latest self-indulgent waste of taxpayers’ money to emerge from St Andrew’s House carries the portentous title Energy Regulation in an Independent Scotland, prepared by an “Expert Commission”.
The clue is in the title. However “expert” these people might be, they were not entrusted with their own agenda. They were not invited to advise on whether independence makes the slightest sense in the energy context. Their remit was restricted to the hypothesis of Scotland having voted to separate.
At that point, their response becomes comical in its evasion of hard questions. Essentially, their conclusion is that everything should carry on as at present because it is in Scotland’s interests that it should. The inconvenient fact that the UK government insists the exact opposite would happen is simply ignored.
As with the currency, there is to be no “plan B”. The rest of the UK will continue to buy Scotland’s electricity output, no matter what it costs. Full stop. There is no consideration of what Scotland would be left with if they declined to do so which, in the view of my own “expert commission” is a racing certainty.
Let’s look at the Scottish Government’s existing energy policy which can be summarised as follows:
1. They hate nuclear power and there will be no replacement for Hunterston B and Torness until hell freezes over.
2. They neither know nor care what will replace the base-load from Scotland’s four thermal power stations, all due to close within a decade, since that’s tomorrow’s problem.
3. The answer is that it will probably come from England via the inter-connector but with a bit of luck the hated Hunterston B and Torness will keep going long enough to avoid that embarrassment for a few years yet.
4. English consumers will continue to fund Scottish renewables, via open-ended subsidy and infrastructure costs, regardless of whether or not we are living in separate states.
5. Er… that’s it…
The central conclusion of the Expert Commission that it would be a jolly good idea to retain a single market in electricity within our small island need not have detained them long. Who could disagree? Certainly not the English generators who will be delighted to pump as much electricity as we want into Scotland as soon as we are daft enough to have put ourselves in the position of requiring it.
Even the Expert Commission summoned all its courage to note this prospect, buried on page 34 of the report: “Under current forecast scenarios of high renewable generation installation in Scotland and closure of current coal and nuclear generation, Scotland is likely, at time of low renewables availability, to import electricity from rUK in order to continue meeting demand.”
For the past half century, Scotland has been an exporter of electricity to the rest of the UK, due mainly to our nuclear stations. Last year, we exported more than a quarter of what was produced. The triumph of Nationalist policy will be to turn us into an importer. That matters less while we are part of the same state and market but would matter – and cost – a great deal if we were not.
While importing base-load from south of the new Border, we would try to sell them our renewables. But why should they buy them? On this point, the Expert Commission is magnificent in its vagueness, dancing round the essential point that there would be no requirement whatsoever for the UK government to subsidise Scottish renewables. This was confirmed recently by the European Court of Justice in a case involving Sweden and Finland.
“An independent Scotland’s ability to maintain course towards the renewable targets and aspirations set by the current Scottish Government,” chunters the report, “will hinge on clarity as early as possible regarding continuity of current and proposed market mechanisms….”. Ah, what we need is clarity! But what if the clarity is summed up as: “No thanks – and even if we wanted to subsidise expensive Scottish renewables, our voters wouldn’t stand for it now that you’ve chosen to walk away.”?
Answer comes there none, but even the Expert Commission acknowledges there might be limits to the costs which “rUK” would pay. So what is their masterly answer to this multi-billion pound dilemma? Rest easy for the Expert Commission has sagely decreed: “These are questions which a robust agreement and strategic energy partnership between Scottish and rUK Governments will need to define”. Loosely translated, that means: “We’re sorry, we haven’t a clue”.
Casting around for precedent, the Expert Commission alights improbably on Ireland where there is a cross-border electricity market. But crucially, as they neglect to point out, there is no shared regime on subsidising renewables. All the Irish example does is confirm that Scotland would be left with a surplus of renewable energy – mostly from onshore wind farms – but without the subsidy base which currently sustains it.
I heard Alex Salmond sound-biting about Scotland as an exporter of electricity – shameless as ever, given that the surplus comes from nuclear – while England is “facing black-outs”. Ipse, they would continue to buy power from Scotland, he asserted. Well, they might buy power – they just wouldn’t subsidise our renewables, which is all we will have to sell.
England and Wales already import more power from mainland Europe than from Scotland. By 2020, the inter-connector between the UK and Europe will have doubled capacity. They will not need electricity from Scotland. Neither, according to National Grid’s evidence to the DECC Select Committee, do they need a low-carbon contribution since the biggest renewable energy projects now happening are offshore wind farms in the shallower waters of the south.
It is a pity that the Expert Commission did not break free of its shackles in order to tell the truth, which is (a) there is not the slightest reason to believe that UK Continuing would force its consumers to subsidise expensive Scottish renewables; (b) the only hope for the Scottish renewables industry is to remain part of the UK market, with subsidy to match; and (c) Scotland desperately needs a balanced energy policy rather than daft over-reliance on renewables.
I doubt if any member of the Expert Commission would disagree with a word of that. They should say so.
Incidentally, in the real world yesterday, Ofgem approved a £1.2 billion subsea link between Caithness and Moray. Anyone fancy funding that kind of investment, multiplied many times over, from within Scotland alone?