Energy bills would rise in an independent Scotland – that was the main economic point highlighted by UK Energy Minister Ed Davey when he launched the Government’s White Paper on Scotland’s energy future yesterday.
Speaking in Edinburgh before an invited audience of energy industry chiefs, Davey said:
“In an independent Scotland, only Scottish households and businesses would bear the extra burden of upgrading the Scottish grid and supporting Scottish renewables.
“And the analysis we are publishing today sets out how this would add at least £38 to the averages household’s yearly bill – and add £110,000 a year to the bills of a medium sized manufacturing firm.
“I say at least – because our analysis shows that in some scenarios, where the full costs of supporting large scale Scottish renewables falls to Scottish bill payers alone, it could be as much as £189 extra per year per household, or over £600,000 for a medium sized manufacturing firm.”
Davey also said energy companies operating in Scotland would face additional regulatory costs of complying with two regulators – one in Rest of UK (RUK) and a separate Scottish regulator. “In my experience,” he said, “most businesses reluctantly bear the cost of just one regulator – never mind two.”
The UK Energy minister also criticised the Scottish Government view that Scotland would continue to export electricity to RUK to solve the looming ‘energy crunch’ if demand exceeds supply.
He said: “Why would the continuing UK not instead invest in burgeoning renewables within its own borders?
“English and Welsh offshore wind is booming. England and Wales have huge tidal powers reserves. And we have more hours of sun in the average year than Scotland.
“And with the interconnectors being built to Europe, renewable credits can be sourced from wherever they are cheapest.
“There can be no guarantees about how much or at what price the UK will trade energy with an independent Scotland.
“Because there are no guarantees about how much electricity from an independent Scotland will actually cost. And bills in Scotland are likely to rise as a result – by as much as £189 per household.
“And because of the success of Scottish renewables, although Scotland accounts for some 10% of electricity sales in the UK, it receives 28% of the support paid by all UK consumers to renewable generators.
“Within the United Kingdom, Scotland’s people are protected from the full costs of this necessary transmission work and support for renewables. All 30 million UK consumers pay an equal share.”
The Minister said that the future of European energy is a single competitive market, where we trade our home grown energy and boost our collective energy security. The UK has interconnectors that transport electricity to and from a number of countries in the rest of Europe and is developing more. He added:
“In fact, we already import on average more electricity to England and Wales from France and Belgium, than we do for Scotland.
“The current connections to France, Ireland and the Netherlands have the capacity to provide electricity for almost 3.5 million homes (4GW).
“And there are new advanced interconnector projects where other European countires could potentially provide electricity for 5 million more homes (6GW).
“These include the NEMO link to Belgium, NSN to Norway and the ElecLink to France – through the Channel Tunnel – all to be operational well before 2020.”