Independent Scotland would 'try to stay in UK energy market'

Falck Renewables' Kilbraur wind farm in northern Scotland

Some investors are nervous about the implications of an independent Scotland

Scotland would seek to remain part of the UK energy market if its voters approve independence in the country’s upcoming referendum, Scottish Energy Minister Fergus Ewing says.

Ewing’s comments come with an eye towards calming investors who have grown increasingly nervous about the future stability of Scotland’s renewables market were it to secede from the UK.

“What we believe will happen in the event of a successful [independence] vote is that there will continue to be a single UK energy market,” Ewing told this week's Global Offshore Wind event in London.

“They [England] need our renewable-energy resource, and we need their demand.”

However, Ewing acknowledges that there is no guarantee the UK would allow Scotland to remain within its broader support scheme for low-carbon energy.

The UK government, which is opposed to Scottish independence, “is unlikely to give us bankable assurances of that in advance of the referendum”, Ewing concedes. “That’s politics.”

There is growing tension between First Minister Alex Salmond’s efforts to convince investors that Scotland is a stable market for renewables investment, and his professed desire to see Scotland break away from the UK as early as 2014.

Scotland aims to ramp up its renewables capacity massively over the coming decades, but would struggle to foot the bill without the broader UK market to sell into.

For investors, the picture has been made even shakier by Salmond’s “significant reservations” about the UK’s recently mooted Electricity Market Reform (EMR) package, including its perceived favouritism towards nuclear power, and the limits it may put on Scotland’s ability to maintain direct control over incentive levels for various renewables technologies.

Ewing concurs with Salmond’s main objections to the EMR, but has nevertheless attempted to throw a wet blanket over the furore, saying Scotland will ultimately buy into the system.

“We do have concerns about the energy mix the UK government is pursuing, and whether the interests and powers of the Scottish government are being recognised,” Ewing says. “But we are willing to work with the UK government to try to make the mechanisms in EMR work for the industry.

“We seek to maintain as close and as positive a relationship with [Whitehall] as possible.”

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