Scottish Vote Will Impact On Renewable Energy Growth
News headlines in the UK and abroad have been dominated by the referendum on Scottish independence. If voters choose to leave the UK, Scotland would likely see renewable energy investment drop due to uncertainty about future support, according to Bloomberg New Energy Finance research. Some developers have already responded to the referendum uncertainty: Infinis, a renewable power company, said in August that it would wait until after 18 September to take final investment decisions on the 55MW Galawhistle and the 48MW A'Chruach onshore wind farms.
The "˜continuing UK' "“ ie, England, Wales and Northern Ireland "“ may also experience a short-term reduction, though some projects in those countries might benefit if projects in Scotland are no longer eligible for support under the contracts for difference programme. One of the eight projects that qualified in April for early contract-for-difference support is SSE's 664MW Beatrice offshore wind project in Scottish waters.
Generally, the continuing UK government will find it tough to convince its electorate to continue supporting new renewable energy development north of the border, though both nations are likely to want to avoid retroactive changes on existing projects.
As for the wider electricity sector, Bloomberg New Energy Finance analysis suggests that the most cost-effective approach would be to continue a single, integrated power market of England, Wales and Scotland. That said, divergent policy on nuclear and renewables payments may lead the continuing UK to argue for some separation. In fact, Scotland may be more dependent on England & Wales as a customer. Less than 5% of net annual electricity consumption in England & Wales was met by Scottish generation over 2004-12. A greater share came from continental Europe via the 3.5GW of interconnectors, with another 5GW planned for operation by 2020.
