Scottish independence: Warning over investment in renewable energy

INVESTMENT in renewable energy “will start to dry up” if subsidies are cut post-independence, global consultancy AF-Mercados warned today.

At a committee at Westminster the group claimed that firms cannot automatically assume the level of financial support they currently get will continue.

It has raised doubts that England and Wales would keep buying renewable energy from an independent Scotland.

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The Scottish Government said the claims are “simply wrong”.

They believe a single energy market would continue if independence is backed in 2014.

In a submission to the Commons Energy and Climate Change Committee, AF-Mercados said: “In the event of independence for Scotland, renewable generators north of the border cannot assume that they will be able to continue enjoying the level of subsidies they receive at present. Once investors realise this, it can be expected that investment in renewables north of the border will start to dry up.

“The public position of the First Minister in November 2011 has been that England and Wales would have to continue buying renewable energy from Scotland to meet their renewables targets.

“Well, in the opinion of the authors, such an outcome, while possible, is unlikely at the price levels and volumes that might be expected were the Union to continue.”

AF-Mercados, headquartered in Sweden, is a subsidiary of AF Consult which bills itself as one of the six largest energy consultancies in the world. AF Consult was recently criticised by the UK Department of Energy and Climate Change for writing a “very, very poor” report on green energy targets.

A Scottish Government spokesman said: “These claims are simply wrong. Scotland produces the cheapest renewable energy in these islands, and the reality is that the rest of the UK not only needs Scotland’s electricity to meet its own renewables targets but also to help keep the lights on south of the border.

“A single Great Britain energy market would be maintained post-independence, within an increasingly unified single EU market. Indeed, increased integration of energy markets across the UK and Ireland was agreed at a meeting of the British-Irish Council between governments across these islands last summer.

“As 2020 approaches, countries across the EU, not just the UK, will need to source affordable renewable generation from nations such as Scotland which are blessed with major renewable resources.”

The spokesman said international corporations and domestic firms are investing in the Scottish renewable energy industry and will continue to “for as long as the wind blows and the tides turn”.

“Generating more renewable energy will mean cheaper energy bills than maintaining the status quo,” the spokesman added.

Scottish Conservative finance spokesman Gavin Brown said: “The best way to have a stable, secure and affordable energy supply is to have the type of balanced mix that we have across the UK as a whole.

“The current coalition Government has been extremely positive in trying to resolve matters such as the fossil fuel levy and the Green Investment bank, which brings benefits to Scotland and the rest of Britain.”