London would set the levels of subsidies for Scotland’s wind farms and other forms of renewable energy in the event of independence, the Sunday Herald has learned.
The Scottish Government has confirmed that plans to repatriate control over subsidy levels from Edinburgh to London in 2014 would endure if Scotland voted for independence.
Under the terms of the Energy Bill now working its way through Westminster, the Scottish Government would have only a consultative role over setting the subsidies, effectively putting Scotland’s 2020 target to meet 100% of the country’s energy needs with renewables in English hands.
The Scottish Government told the Sunday Herald that it did not “envisage establishing a separate [subsidy] regime in an independent Scotland”, suggesting that the joint administration of the system would be “of mutual benefit to all GB customers”.
Energy experts interpreted this as an attempt by the nationalists to neutralise opponents’ threats that energy bills in an independent Scotland would rise by as much as £400 a year to subsidise renewables developments.
Westminster Energy Secretary Ed Davey was recently quoted at a conference in Edinburgh saying that independence would cause Scottish energy bills to rise “significantly”, and would not confirm whether England would even need the energy produced in Scotland.
The move by the SNP Government will be seen as echoing other post-independence policies that have attracted criticism for subordinating the country to rule by the remainder of the UK, such as keeping the pound and letting the Bank of England set interest rates.
Scottish Labour energy spokeswoman Rhoda Grant described the policy as “ludicrous”.
She said: “How can you say you want independence to control your own affairs and then relinquish control to what would be a foreign land? Once again, it shows they haven’t thought through independence.”
She added: “What happens if the UK Government says we will give you your subsidies, but if you have a wind farm in Scotland, you will have to build it in England and give us all the construction jobs?
“They will not be able to meet their 2020 targets without having some control over their subsidies.”
Dave Watson, Scottish organiser of Unison, who specialises in energy, said: “The Nats are trying to steady the bus and calm down companies that are already concerned about renewable investments in the UK because of the uncertainty being created by the Government’s Energy Bill and the Treasury’s dash for gas. They obviously think that the best way to do that is by tying Scotland into a broader UK regime.
“I’m not convinced it will work. It would be entirely reasonable for an energy minister sitting in London to say to National Grid, ‘This is our new energy strategy, and if that inconveniences the Jocks so be it.’
“There’s nothing that says the UK has to use renewables to meet the emissions targets – or, more importantly, Scottish renewables. There are all sorts of alternatives, such as rigging the market to favour English nuclear stations.”
Under the current system for subsidising renewables, the Scottish Government separately sets the level of renewables obligation certificates (ROCs) that companies receive for developing different types of green energy. It has long claimed that this has been a great benefit to the country – for instance, offering more ROCs than the UK to wave and tidal developers helped to establish the Orkneys as a centre for marine energy.
The Energy Bill proposes to phase out the ROC system between 2014 and 2017 and replace it with a new system known as contracts for difference (CFDs). The subsidy levels for these, known as strike prices, will be set each year by the UK Government.
A Scottish Government spokesman said: “To ensure stable prices for customers and to promote investor confidence, we propose continuing with the proposed new energy market arrangements under constitutional reform, and do not envisage establishing a separate regime in an independent Scotland. This will be of mutual benefit to all GB customers and is consistent with the increasingly integrated European energy markets. Under these arrangements, Scotland would have a voice in the market governance.
“We have always recognised the importance of working jointly and collaboratively with the UK Government to secure the best outcome for Scotland.”
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