The Scottish Government is presiding over an energy policy that is little more than a shambles, writes Brian Wilson
A few weeks ago, I took part in a referendum debate with Fergus Ewing, the Scottish energy minister, and was genuinely startled to learn that his strategy for keeping Scotland’s lights on until 2030 depends on our two nuclear power stations continuing to operate.
Fergus was a Glasgow lawyer in his prior existence rather than a nuclear engineer so while he might wish for that outcome; he certainly cannot guarantee it. Thankfully, it is the Nuclear Installations Inspectorate, rather than any politician, who will make the critical decisions and this week’s reports of cracks in the Hunterston B reactor wall remind us of how vulnerable the assumption is.
One could dwell on the irony of a Scottish Government which seethed with anti-nuclear rhetoric and destroyed the sensible option of encouraging a state-of-the-art Hunterston C now pinning its energy masterplan on keeping our trusty old nuclear stations going for more than half a century. But that is where they have led us and where we now are.
A couple of weeks ago, Spanish-owned ScottishPower spoke of closing Longannet sooner than expected because it cannot compete with coal-fired stations in England. (Incidentally, whatever happened to the multi-billion pound Scottish investments promised by the chairman of Iberdrola, in concert with our First Minister, during the run-up to the 2011 Scottish elections? Is anyone counting?).
Mr Ewing came in on cue to denounce transmission charges which reflect the fact Longannet is further from the main market it supplies than its competitors. Again the irony was glorious. Just a few weeks ago, Fergus was campaigning to turn this market into a foreign state. Where would that have left the bargaining power of Longannet or any Scottish generator?
The long and short of it is that Scottish energy policy is a shambles which is leading us in the direction of becoming an electricity importer for the first time since the lightbulb replaced the Tilley lamp. More seriously, it is threatening a commodity critical to any economy, security of supply.
According to Paul Younger, professor of energy engineering at Glasgow University, closure of Longannet, “would make it very difficult to keep the lights on when the wind isn’t blowing, without increasing reliance on power imports from England for which there isn’t sufficient inter-connector capacity on the National Grid anyway”.
That is not the cheeriest of scenarios but one that should concentrate minds. Yet the issue is bedevilled by efforts to present every aspect of it as a Scotland v England conflict when the reality is that our interests are wholly inter-dependent. Now the referendum is over, it would be sensible for even the Nationalists to recognise that imperative.
At the last count, 34 per cent of electricity generated in Scotland came from nuclear power, 30 per cent from renewables (hydro and onshore wind), 25 per cent from coal and 8 per cent from gas. The Scottish Government policy is to generate the equivalent of 100 per cent from renewables. In order to make this remotely feasible, it will be necessary to invest heavily in replacing baseload within Scotland (unlikely) or else import it from England.
Either way, the prerequisite is a single Great Britain market with sufficient inter-connector capacity to carry our surplus generation (particularly from renewables) to the south and import as required from England. There is an urgent need for clarity on what is needed to make this happen and thus ensure both security of supply and a Scottish renewables industry.
Transmission charging is a serious issue which demands a political, rather than regulatory, response far less the pretence that is all about anti-Scottish discrimination. My own view from bitter experience is that far too much power has been handed to “independent regulators” when the decisions they are entrusted with are inescapably political. Ofgem certainly fits this description.
The question of whether the power industry should be structured to encourage generation in every part of the country in order to best serve our overall needs can never be anything other than political. But in order to have that rational debate, it helps to first recognise that we are indeed one country and market.
These issues are seen in sharp focus from the vantage point I occupy in the Western Isles. For seven years, a decision has been awaited on whether there should be a subsea cable to allow the renewable energy potential on land and offshore to be harnessed and power exported. We are no closer to a decision and, in frustration, one major developer, GDF Suez, has just pulled out. The economic implications are enormous yet the process which causes this impasse is shrouded in mystery. Referendum uncertainty provided a useful alibi for delay and the project would certainly be dead if there had been a Yes vote, since it depends largely on English consumers paying for it. Now that is over and both Scottish and UK governments say they want it to happen.
However, it is not within the power of either to deliver. The key players are Ofgem and the company responsible for grid provision, Scottish Hydro Electric Transmission Ltd (Shetl), part of SSE. Before Ofgem can make a decision, Shetl must provide a “needs case” which it has resolutely declined to do. No politician seems capable of forcing the pace. And so it goes on.
A little history is necessary here. When electricity was privatised, the two companies – ScottishPower and Scottish Hydro – were allowed to remain vertically integrated as a sop to public opinion. This gives them a role as infrastructure providers which would not exist elsewhere in the UK.
Nobody at that time was thinking about renewables or the need to “rewire Britain”.
What this has created is an extraordinary and unsatisfactory dual role for both ScottishPower and SSE. They are major generators of renewables in their own right and also key participants in the process which determines where grid investment takes place. A lot of people in the Western Isles and many other parts of Scotland would like to see the effects of that anomaly revisited and subjected to parliamentary scrutiny.
I suppose we could ask Lord Smith’s Commission on the constitution to look at it but unfortunately, the chairman would have to leave the room as he is also chairman of SSE.
Scotland really is a village. Let’s hope the lights don’t go out in it.