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England

England

Scottish referendum decision paves way for wind

UK: The UK's wind industry could be boosted following the 'No' campaign's victory in the Scottish independence referendum although energy policy is likely to change.

The decision by the Scottish electorate to remain within the UK leaves the way open for a number of projects that are dependent on UK subsidies to proceed.

In the event of a 'yes' vote for independence, a negotiation would have taken place between Scotland and the remainder of the UK with energy being one of the many areas to be considered.

However, change is still on cards with Scotland effectively being promised home rule.

In the case of independence continued access of Scottish wind projects to UK subsidies would have been a key battleground.

Conservative estimates put the negotiation timetable at 18 months, which could have provoked further uncertainty among developers looking to build projects.

In the run up to the referendum, Scotland's independence campaign led by the Scottish National Party (SNP) has maintained that the remainder of the UK (rUK) would have needed to buy Scotland's renewable energy in order to meet its 2020 targets.

On the opposing side, UK energy minister Ed Davey stated that an independent Scotland would need to compete on the open market with other nearby countries like Ireland and Norway.

But Scottish independence would undoubtely have hit the ability of the remainder of the UK to reach its 2020 targets. According to Windpower Intelligence, Scottish capacity makes up over of half the UK's 4.5GW of onshore wind. While up until 2020 Scotland has a pipeline of around 10GW onshore and 5GW offshore.

Despite a reluctance by many companies to comment on the referendum, privately it was clear the wind industry had been unnerved by the vote. As recently as last month, developer Infinis announced two projects totalling 98MW would be delayed until after the referendum.

The implications of uncertainty arising from the referendum was outlined as early as 2011 when analysts at Citigroup advised against investing in the Scottish renewables.

The report also argued that an independent Scotland would have too small a consumer base to generate the annual subsidy of £4bn, which it believes would be needed to support a hugely increased reliance on renewable energy.

The decision on how Scottish projects are funded may have had an effect on a number of manufacturers, notably Gamesa and Areva who have announced plans to build manufacturing plants in Scotland. However, neither have made a final investment decision.

Although these have avoided blaming the referendum on a failure to green light the plants, any decision to exclude Scottish offshore projects from the UK subsidies would have hampered the development of its 5GW (up to 2020) offshore pipeline.

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