Power bills blow

Peter Jones wrote an excellent article (Perspective, 17 March) on the consequences to the Scottish economy of full fiscal autonomy. However, what would be interesting would be an assessment of the consequences resulting from the costs of subsidising the renewable energy sector.

Last year, Scottish Renewables stated that the sector received £2 billion in subsidies in 2012, when renewables generated 12 per cent of Scottish demand. Extrapolating this to the 100 per cent demand scheduled for 2020 gives a subsidy bill of £16bn a year.

Currently, 92 per cent of the annual subsidy is paid by English and Welsh consumers via the UK grid pricing structure. However, as your columnist Brian Wilson constantly reminds Scotsman readers, a ruling by the European Court of Justice decrees that Scotland cannot charge foreign consumers for the subsidy element of any electricity exported. This would result in the £16 billion subsidy being paid solely by Scottish consumers.

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Two million domestic consumers use 30 per cent of electricity in Scotland and so would face an additional cost of £2,400 a year on their bills. The budgets of public sector firms would drown in a deluge of red ink, whilst private firms would head for Carlisle or Berwick.

It would appear that renewable subsidies would bankrupt the Scottish economy as the bill is four times that resulting from loss of Barnett formula income.


Queen Street, Castle Douglas Kirkcudbrightshire