Energy bills ‘could rise by £200 after Yes vote’

HOUSEHOLD energy bills in an independent Scotland could rise by almost £200 a year to meet the cost of the “green” ­energy revolution planned by First Minister Alex Salmond, a UK government ­report has said.

Ed Davey said UK was fundamental to Scotlands success. Picture: Toby Williams
Ed Davey said UK was fundamental to Scotlands success. Picture: Toby Williams

The cost of investment in new networks and linking up people in ­remote areas would also contribute to the ­expected hike, which could hit small firms to the tune of £110,000, UK energy secretary Ed Davey claimed yesterday.

Last night, the claims, made at the launch of the coalition government’s latest Scotland Analysis paper on energy, were branded “yet more scaremongering” by the Scottish Government.

Holyrood ministers have said they want to generate 100 per cent of Scotland’s electricity from renewables, ­including hydro, wind and wave energy by 2020. Energy minister Fergus Ewing claimed the country’s “huge energy sources” would help avoid a blackout in the rest of the UK (rUK).

Speaking in Edinburgh yesterday, Mr Davey said Scotland could “make a go of it alone” with its natural land and sea resources.

He added: “To do this the people of Scotland would have to give up being part of a family of nations that make up the United Kingdom. Not a holiday, not a sabbatical, but an irrevocable, 
irreversible act of divorce.

“It would close the book on 300 years of shared history, shared fortune and shared fates.”

Scotland is one of the “world’s energy hubs, an energy powerhouse” said Mr Davey, with oil and gas in the North Sea and a “thriving” renewables industry.

But the UK is “fundamental” to this success, he added, with Scotland accounting for 10 per cent of electricity sales, but getting 28 per cent – about £560 million – in renewables support in 2012/13.

The Scottish Government is firmly at odds with Westminster over nuclear energy. Mr Salmond has pledged to end ­nuclear power north of the Border when the Hunterston and Torness stations come to the end of their expected lives, while the UK government last year gave the go-ahead for the first new nuclear station in a generation at Hinkley Point C in Somerset.

At the time, European Commission vice-president Joaquín Almunia warned it was nuclear energy – not renewables – which would be likely to lead to higher bills for consumers.

Scotland’s ambitions to shift to renewables are also expensive and current subsidy levels for offshore wind are poised to reach £150 per mega watt hour.

This compares with £90 for nuclear subsidies, according to Mr Davey, but it brings concerns over dangerous waste.

The report published yesterday says a Yes vote will add at least £38 a year to the average household energy bill, possibly rising to as much as £189 once the cost of supporting renewables projects is included.

Mr Davey said the existing integrated UK energy market “could not survive” in the event of a Yes vote. The rUK, with a range of power sources domestically and growing grid links with continental Europe, would not need to purchase energy from Scotland.

He added: “For the continuing United Kingdom, the energy relationship with an independent Scotland would become purely commercial – the future of ­European energy is a single competitive market. We already import more energy to England and Wales from France and the Netherlands than we do from Scotland.”

Future connections with Norway and Belgium will add to this by 2020. Scotland would only be able to sell energy to the UK at the “same market” as other European competitors, the minister added. “Why would we pay over and above the market price for Scottish power? It wouldn’t make commercial sense.”

But Mr Ewing said Mr ­Davey’s administration is likely to drive up bills. He added: “Only a Westminster politician could fail to see the huge benefits of Scotland’s abundant energy wealth to consumers across these ­islands. Instead of accessing Scotland’s reliable energy resources, he is talking of importing energy over interconnectors that don’t yet exist from the ­European mainland where many countries face a similar ­energy supply concern as the UK.”

Professor Peter Strachan, an expert in energy policy at Robert Gordon University in Aberdeen, said the UK government is “doing a very bad job at the ­moment in managing UK energy policy” and dismissed claims that a Yes vote would lead to price hikes. He was among a group of academics who produced a report into the coalition government’s decision to fund a new nuclear plant.

He added: “What we’ve found in the various scenarios that we’ve presented…[is] that a Scottish Government committed to no nuclear power would actually see a reduction in… consumer bills as a result of having no new nuclear build.”

Richard Dixon, director of environmental group Friends of the Earth Scotland, said the UK government’s nuclear power ambitions are “a direct threat” to investment in renewables.

He added: “Scotland is rich in clean, green energy sources, and green electricity will be in demand more and more as the rest of the UK and countries in Europe try to cut climate ­emissions.”