Brian Wilson: Scottish power can’t go it alone

The SNP’s renewable energy targets are laudable, but its policy is dependent on the guaranteed market of a British state

THE honest way to approach a problem is to acknowledge it exists and then seek to address it. The dishonest way is to deny its existence. Dismissal of a dichotomy between Scotland’s current energy policy and the demand for Scottish independence represents a classic of the latter genre.

Over the past week, all the king’s horses and all the king’s men have been deployed by the SNP/Scottish Government’s formidable propaganda machine. Alternative conclusions have been magicked out of thin air. Courtiers of the regime have been deployed to pour scorn on the fainthearts.

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The Nationalists’ aim is to fight the issue to a confused draw. “I say this, he says that”...the public loses interest. It is a familiar tactic but the problem in this case is that it won’t keep the lights on or pay the bills. There is a very real issue at the heart of these exchanges which is too important to be left to the spin-doctors.

There is nothing fundamentally wrong with the SNP’s ambitions for renewable energy. In fact, they are broadly similar to the ones I was pursuing a decade ago. The significant differences lie in the rhetoric that surrounds them and the context within which they are being pursued.

When Alex Salmond talks about Scotland producing 100 per cent renewable energy, he is using forgivable poetic licence. The missing word is “equivalent”, since the strategy does not involve Scotland using nothing but renewables, which would be ridiculous. Rather, we would produce the equivalent of what we use ourselves and export a very large share of it.

It might be 100 per cent or it might be 50 – who knows? And it will be decades before we find out. That is the political attraction of energy policy – nothing is proven or disproven within an electoral span. But the basic point is both indisputable and welcome: that Scotland has greater potential renewable resources than the rest of the UK. The word “potential” is also important since nothing is assured.

A decade ago, we put in place the British Electricity Transmission and Trading Arrangements (BETTA) precisely in order to encourage investment in renewables and facilitate the transportation of clean power from Scotland to the rest of the UK. We also supported the case for huge investment (to be paid for by all UK consumers through their bills) in the physical infrastructure required to carry power to markets in the south. “Re-wiring Britain” it was called.

In keeping with that, I was very keen on exploring the possibilities of wave and tidal power, which is why we invested in the EMEC testing facility in Orkney. We also backed the experimental Beatrice Field wind project since, unquestionably, the “potential” for massive renewable energy production lies offshore more than onshore. Ten years later, the jury is still out on offshore renewables for both economic and technical reasons.

So none of what is going on is new and I would be the last person to denigrate ambitious targets for renewable energy, though I think the claims about what “will” happen, as opposed to what “might” be delivered, are now in the realms of irresponsibility. You can’t indefinitely build an energy policy on press releases alone.

All of these ambitions make total sense within the context or our little island being a single market, with lots of people at the bottom using lots of renewable energy from the top. But the fundamental truth inherent in that statement is one that the Nationalists cannot face up to – that their flagship policy for the Scottish economy, renewable energy, is inescapably based on a Unionist assumption.

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If there is no British state then there is no certainty of a British market or of British trading arrangements underpinned by a regulatory system that has obligations to the whole of Britain. There is a world of difference between an internal British market and a cross-Border one in which Scotland would have the same constitutional relationship with England as France or, indeed, Russia – suppliers of cheap nuclear power and gas, respectively.

Whatever else offshore power from our wild waters might prove to be, it will not be cheap. There will be no case from an English perspective for skewing the market towards Scottish renewables as must happen in order to make renewables viable. There will be even less case for forcing English consumers to pay 90 per cent of the infrastructure costs for the supply of electricity which energy retailers may neither need nor want.

Honesty about this is required, sooner rather than later. What, for example, is the case for the Beauly to Denny line unless there is a guaranteed market for renewable power in the rest of Britain? If there is to be no British state, there will be no certainty of a British market. Would we spend £600 million on a motorway without a destination?

Then there is the closely related issue of transmission charges. In the political kindergarten we inhabit, this is usually presented as a Scotland v England issue but it is no such thing. Power is generated from most of Scotland on a perfectly economic basis uninhibited by the current transmission charges. Windfarms on Skye or in Caithness pay £26 per megawatt hour, reflecting only in part their distance from markets.

The genuine problem arises in respect of the true periphery – the three offshore island groups of Orkney, Shetland and the Western Isles where the charge is not £26 but £96, making renewable generation of any kind totally uneconomic. Talk of transmission charges “discriminating against Scotland” only confuses this much narrower reality. But the periphery is crucial because the islands would be the future conduit, via sub-sea cables, for offshore generation.

Ofgem is due to pronounce shortly on this issue and government may have to intervene if they refuse to budge. One way or another, I assume that the problem will be sorted because unless it is sorted then most of the talk about “the Saudi Arabia of renewables” will have been an expensive waste of time. Nothing will happen offshore unless there is a substantial reduction in transmission charges from the periphery.

However, what might be “sorted” in the context of a GB market can just as easily be “un-sorted” if that market no longer exists. Much of the power industry is strongly opposed to deviation from cost-reflective transmission charging in order to benefit Scottish offshore renewables at the expense of consumers. That is why Ofgem has been so reluctant to make that call. If Scotland and England become two separate states, there will be no case at all for such favourable treatment. None of this is scaremongering but simply, as the saintly Al Gore might put it, “an inconvenient truth” which needs to be addressed rather than derided.

It is possible, of course, that the English would act with magnanimity and buy expensive renewable energy from its newly-independent neighbour. But that is a curious assumption for a separatist party to base its flagship policy on.

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And consider the politics of the matter. Mr Salmond would be asking the English to adopt this selfless approach at exactly the same time as he was marching down Whitehall, Saltires a-flutter, demanding the repatriation of North Sea oil revenues, to the serious detriment of ordinary folk in Liverpool, Manchester and Newcastle; exactly the same people who would be forced to pay a surcharge on their energy bills to fund Scottish renewables. Even the insouciant English might notice the contradiction.

For fundamental Nationalists, such arguments are of little or no interest. If it is a choice between renewables (or anything else) and independence, they will choose the latter. That is an honest position but probably not one that commands majority support. The dishonest position is to deny that such contradictions exist or that there are prices to be paid for the uncertainty that now exists.

• Brian Wilson is a former Labour UK energy minister