Responding to a speech on energy policy by UK Energy Secretary Ed Davey, Scottish Energy Minister Fergus Ewing has warned that the UK’s energy supply crunch will drive up bills.
Ewing also pointed to a recent report by academics from across the UK who predict cheaper energy bills with independence, if we are relieved of massive subsidies for planned new nuclear reactors in England and Wales.
Ofgem warned last June that the UK’s margin between supply and demand could be as low as 2% by 2015. In contrast, the margin in Scotland is a much healthier 20%.
He said: “Since Ofgem’s warning, National Grid have said that they expect the amount of new capacity to come onto the grid to be less than half their previous expectations. Mr Davey’s own department has also warned about tightening capacity margins increasing the “likelihood of costly blackouts”, and heavy industry is already feeling the pinch of the UK’s security of supply problems.
“Without the single GB market, Ed Davey is in grave danger of becoming the Minister who caused both blackouts and higher bills.
“The UK is now forcing large industrial power users to halt production in peak winter months, paying other companies not to use electricity and is also having to de-mothball older less efficient plants which can only be done at higher cost for consumers.
“None of these emergency measures would have been necessary were it not for mismanagement of UK energy policy by Mr Davey and his predecessors.
“We remain in favour of a single GB market, post-independence, because we recognise its merits for consumers across these islands – but that can’t be at the expense of security of supply. Distinguished academics from universities across the British Isles have pointed out that in fact Scottish consumers could have cheaper bills with independence if the UK goes ahead with plans to subsidise the building of new nuclear reactors in England and Wales.
“Mr Davey’s scaremongering today, and his mismanagement of energy policy, only adds to energy uncertainty at the very time when it is least needed, to continue to attract investment in new plant as capacity constraints bite.
“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 concerns as the UK.
“You don’t have to be an energy expert to see that that is somewhat problematic! Even more so when these interconnectors can then be used to export electricity as well as import electricity. Under EU rules Mr Davey would not be able to prevent power flowing out of the UK to continental markets if prices were higher there, thus potentially worsening the UK’s difficult position.
“Mr Davey also forgets to mention that the cross-subsidy works both ways. In a single GB market Scottish consumers help subside renewable power in England; and will also help subside the new Hinkley Point new nuclear power station which Mr Davey – in a handy U-turn – is now in favour of, at an estimated cost of £35 billion to consumers bills. Mr Davey is only accounting for one side of the energy equation.”
Reacting to the clash of words between Scottish and UK Ministers over the future of electricity generation, Dr Richard Dixon, Director of Friends of the Earth Scotland, said:
“The UK Government’s obsession with getting new nuclear at any cost is a direct threat to investment in renewables and efficiency. The bottom line is that 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.
“On the other hand new nuclear power creates dangerous wastes and needs a fortune in public subsidies to get built at all.
“If Europe eventually clears the way UK electricity consumers will be paying around a billion a year for 35 years to subsidise only two reactors in England. Just a fraction of this money would see the widespread roll out of renewables and improvements in energy efficiency.”
Hector Grant, Chief Executive of the Industrial and Power Association, added: “The publication of the UK Government White Paper on Scotland’s Energy Future gives more food for thought.
“The power industry is now beginning to see a plethora of ‘evidence’ that it will have to consider as it prepares for the changes forecasted, regardless of the decision in September.
“What is needed is stability for the industry to allow it to properly respond to the security of supply, affordability and low carbon demands of its customers and international regulators.”