Sustaining the Energy Sector in an Independent Scotland

The 18th September is now just over two months away, and as the two camps make their final push in persuading Scottish nationals either to stay put in the UK or run from it as quickly as humanly possible, it seems worth taking stock of what the clean energy landscape may look like in a post-referendum, independent Scotland.

In 2012, 25 per cent of the renewable energy generated in Scotland made its way south into the UK. As a sizeable chunk of the total, it will have made a substantial contribution to the sector’s annual success. This friendly give and take, however, depends on the maintenance of an amicable relationship between the two component parts, and make no mistake, the energy market will not be exempt from the bitter divorce proceedings that will undoubtedly ensue if the two nations unwed.

It seems optimistic at best and painfully naïve at worst to imagine that Britain would be willing to buy so much as a paperclip from its northerly neighbours in the case of a ‘yes’ vote, let alone to support the independent state’s economy by purchasing swathes of clean power from them.  Indeed, far from envisioning independent Scotland as a white knight riding upon a faithful steed, laden with the gift of energy to save Britain from the terrible energy mess we’ve made for ourselves, it is far easier to picture Britain turning its back altogether on any imports and sourcing its green power requirements from elsewhere through the pipeline that runs across to central Europe.

One thing there can be no debate about is that Scotland is a particularly bountiful resource of natural and sustainable energy, with wind and tidal potential that is among the best in Europe. It is this abundant supply that Alex Salmond MP hopes to use as a springboard to a successful economy, announcing that an independent Scotland could source 100 per cent of its electricity from renewable supplies by 2020. Unfortunately for Salmond, he would do well to revise his calculations; potential alone for a buoyant renewable sector does not equate to a thriving economy.

The problem is that sustainability isn’t cheap. Wind and tidal energy are both heavily subsidised to make them commercially appealing to investors, and they are also subject to very low levels of tax. This means that rather than sitting back and waiting for the big bucks to roll in should Scotland vote ‘yes’, the government will find themselves having to pay out subsidies that annually run into the hundreds of millions of pounds (let’s not get into the currency debate here) in order to prop up its green agenda.

While we wait for the technology to reach parity with traditional fuel, predicted by many as a distant dream until the mid-2020s, it won’t be possible to remove the financial incentives that currently support the industry, not least because there are already many deals in place that investors will expect to be honoured regardless of September’s vote. If an independent Scotland is serious about kick-starting its green economy, it will need to have enough in the coffers to support an industry hoped to be so large that it can, in Salmond’s words, ‘power much of Europe’. This is where the wheels begin to fall off. How will an independent Scotland afford to sustain its sustainability sector? The piggybanks are empty and revenues from the North Sea are already tied up in providing public services. It may be a difficult lens to look through, but to ignore these problems is to sleepwalk into an economic minefield.

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As Chairman of the Rolton Group, Peter provides high-level strategic advice to a range of governmental, public sector and commercial clients. He is an acknowledged specialist in the renewable energy sector, and there is good reason for this: when it comes to energy, Peter is clear about the issues we face and the need for a cohesive strategy to tackle them. He is a passionate advocate of informed debate, and has consistently brought clarity to this complex situation."If the UK is united on one thing about energy it is that, on an individual basis, the public knows what it’s not in favour of. When it comes to offering up solutions, it’s not that confident. Pointing at single solutions like wind farms and saying that they are too expensive is missing the point. Carbon-based forms of energy like oil and gas are running out. Energy is going to be more expensive and a portfolio of renewable energies will necessarily be part of our solution in the future." Peter holds particular expertise in the areas of site-wide energy planning, zero carbon power generation, low carbon design, carbon offsetting and the application of renewable technology. He has acted as a Government advisor on numerous consultations and white papers, presenting to the Secretary of State on a number of occasions on the subject of renewable planning and public sector engagement. He has worked as a strategic partner with some of the world’s largest and most successful blue-chip companies, and is a Director of Renewables East, the renewable energy agency for the east of England.Peter is both a chartered building services engineer and a chartered member of the Institute of Energy, and has gained accreditation under the Carbon Trust Consultant Accreditation Scheme for solution development, with particular expertise in the establishment of energy strategies. He founded his first business, Rolton Services Consultants Limited, in 1989, and founded Cool Planet Technologies, a specialist renewable energy delivery partner which was sold to British Gas in 2010. He has been the architect of the path through which Rolton Group has addressed the challenges of renewables, carbon and the built environment."We need to see the bigger picture and not become hung up on individual technologies and individual costs. We need a completely different technology mix and not a reliance on one form of energy supply. We need all forms of technology to be applied – and we need it to happen quickly."

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