UK energy market 'would continue'

PA/AOL Money

There are "robust" indications that a single British energy market will continue in the event of Scottish independence, according to a renewable energy investor.

A continuing joint Great Britain electricity market is seen as a "natural outcome" if Scotland votes Yes, The Renewables Infrastructure Group (Trig) said in its interim results.

Trig, which recently added former E.ON and Royal Dutch Shell executive Klaus Hammer to its board, has about a quarter of its portfolio in Scotland.

It told investors: "The UK Government has not formalised contingency positions for a Yes vote in the independence referendum.

"Thus, there is an absence of clarity on what aspects of the electricity and renewables regulations and policy would change, and what any new arrangements would be following any secession.

"While there can be no certainty that the politics evident in some pre-referendum positioning could not spill over into enacted policies potentially damaging to the renewables markets, and therefore to Trig, several factors contribute to a robust view on the future of the subsidy regime in a separate Scotland, should this be the case:

"The capability for Scotland to deliver a substantial part of the UK's overall renewables and power requirements - mainly from onshore wind which generally operates with high capacity factors and therefore economic efficiency in Scotland. In contrast, in England the deployment of renewables is running into increasing levels of planning challenges.

"The economic significance of the renewables and broader energy industries in Scotland, coupled with the cost effectiveness of onshore wind in Scotland versus other renewables options of solar PV in England and offshore wind.

"The importance to both the UK and an independent Scotland to honour their commitments. The UK has an excellent and long-standing reputation in the credit markets. The continuing UK and Scotland will have a strong desire and motivation to maintain this standing at this important juncture.

"The likelihood, as generally proposed by industry commentators as a natural outcome, of there being a continuing joint GB electricity market following any independence given the historical position and physical adjacency."

A Better Together spokesman said: "Being part of the UK means we can pool and share our energy resources. Our single British energy market keeps costs down for families and employers in Scotland.

"The cost of paying for renewables in Scotland is supported by energy bill payers across the whole of Britain. This is good for jobs and keeps bills down. If we leave the UK then the cost of paying for renewables would fall on Scottish consumers alone, which will push up energy bills for families all over Scotland.

"We don't have to risk higher costs for families. We can have the best of both worlds - a strong Scottish Parliament, with more powers guaranteed and we can have the strength, security and stability of being part of the larger UK."

A spokesman for Fergus Ewing MSP said: "We welcome that The Renewables Infrastructure Group sees a single energy market continuing post-independence and their confirmation that Scotland's renewable energy can deliver a substantial part of the UK's overall energy requirements.

"A single market is the common sense approach that the Scottish Government set out in Scotland's Future and was backed up by leading energy experts in the Expert Commission on Energy Regulation, who said that a single market is the best option for consumers across these islands.

"The Commission also said that independence will give Scotland new powers to tackle fuel poverty, high energy costs and prices. With the powers of independence we will bring in a permanent and ongoing cut in household energy bills of £70 a year."