United Kingdom

United Kingdom

Scottish independence could 'slam the brakes' on renewables

UK: The breakaway of Scotland from the UK would damage renewable energy investment in the short term, according to research from Bloomberg New Energy Finance (BNEF).

Much of the UK's wind capacity is in Scotland
Much of the UK's wind capacity is in Scotland

The study found that developers and banks would be "gripped by uncertainty" over the future shape of the energy market if the Scottish people vote to leave the union in a referendum on Thursday.

BNEF concluded that in the event of independence, the Scottish government would have to negotiate with the UK over the supply of Scottish wind energy in a process that would be likely to take many months.

"During this period of negotiation, with oil, power and renewables support under discussion — as well as the currency, defence and national debt — clean energy investors would feel less than confident about future prospects, and decisions will inevitably be delayed," said Kieron Stopforth, an analyst at BNEF and author of the research.

These delays could hit projects in the whole of the UK for a time, but the longer-lasting effect would be for those in Scotland if they are unable to compete for support under the renewables obligation or contracts for difference subsidy schemes, said BNEF.

The research found that England and Wales have limited dependence on Scotland for power. In 2012, they imported less than 4% of their electricity from Scotland, compared with 4.7% from Europe. This, BNEF argues, means Scotland may be more reliant on England and Wales as a customer than they are on Scotland as a generator.

In 2013, Scotland's renewable generation was equivalent to 47% of domestic electricity consumption. In 2011, the Scottish government declared a target of 100% renewables by 2020, although this now looks unlikely to be met due to the cancellation of a number of offshore wind projects.

"Scotland has indeed been a firm supporter of renewable energy, under the current Scottish National Party administration and its predecessors, said BNEF senior analyst Angus McCrone. "No doubt, in the very long term, many new projects will be developed there, whatever the result on 18 September.

"But our concern is that in the event of a yes vote, there could be a loss of momentum."

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