Scottish independence could damage Alex Salmond’s drive for wind power by breaking up the UK energy market, one of the country’s largest renewable power companies has warned potential investors.
Infinis said separation could have an “adverse effect” on its operations, future and finances by casting doubt over the UK’s subsidy regime and Scotland’s position in the EU.
The impact could be “significant” thanks to the “division” of its customer base and a separate Scotland creating different policies or legislation, the company said.
In addition, Infinis said the firm’s prospects could suffer if Scots reject independence and powers over energy policy are devolved to Holyrood by the UK Government.
The warnings were made in a 252-page prospectus for potential investors ahead of the firm’s upcoming flotation on the stock market, which is expected to generate up to £930 million.
In a section of the document highlighting “risks” to its profitability, the firm highlighted both the referendum on Scottish independence and the Tories’ plan for a vote on EU membership.
It follows previous warnings that an independent Scotland’s households would face a steep increase in their energy bills to fund wind farm subsidies, with a disproportionate number of turbines built north of the Border.
Ed Davey, the Energy Secretary, has said the remainder of the UK would be under no obligation to buy renewable energy from Scotland, which would face “serious competition” from other countries like Ireland.
But Alex Salmond has insisted that the UK-wide energy market would continue as normal after independence, with the English being forced to subsidise and buy Scottish wind power to keep the lights on.
Tom Greatrex, Labour’s Shadow Energy Minister, said the Infinis prospectus “demonstrates yet again the SNP’s confused and contradictory energy policy is seen as a risk with the significant players in the energy sector.”
The Rutherglen and Hamilton West MP added: “With more than a third of all UK support for renewable energy coming to Scotland and less than one-tenth of the population, it makes no sense to break that up.”
The Infinis prospectus said the firm is the UK’s third largest renewable energy generator, with a 7.3 per cent market share and seven wind farms in Scotland.
Highlighting risks, it said the company faces “uncertainty” if Scottish voters back independence next year.
“The effects could be significant if the Scottish Government were to be given full autonomy, particularly as this could lead to a division of the UK electricity market and new renewable policies or legislation for Scotland,” it said.
Independence or handing Holyrood control over energy policy as part of an extended package of powers “could have a material adverse effect on the Group’s business operations, prospects, financial condition and operational results.”
No specific details on how a separate Scotland’s energy market would work have been published, the document said, with uncertainty over its “budgetary constraints” and EU status.
The prospectus also warned that the UK leaving the EU following the Tory referendum could harm its business as the European target of generating 15 per cent of energy from renewable sources would no longer apply.
A Scottish Government spokesman said it “has a clear commitment to renewable energy that offers opportunities to any company involved in the sector.
“Scotland’s success at securing inward investment is clear and there is no sign of investors being deterred from coming to Scotland.”
Meanwhile, SNP ministers would be forced to heed a court ruling that threatens the spread of wind farms across Scotland, under proposals being tabled in the House of Lords today.
Lord Forsyth of Drumlean, the former Tory Secretary, said he planned to table an amendment to the Energy Bill requiring wind farm companies to have a licence before applying for planning permission.
The move would place in statute a Court of Session ruling last month that developers require such a licence from Ofgem, the industry regulator, for a wind farm to be legal.
The Tory peer decided to table the law change after SNP ministers announced they would ignore the ruling by Lady Clark of Calton, one of Scotland’s most senior judges, pending an appeal next year.
They said they would continue granting planning permission to wind farm developers without a licence to generate electricity because turbines are in the “national interest”.
It had been thought the ruling would stymie the spread of large wind farms as developers rarely obtain an Ofgem licence before applying for planning permission.
Speaking ahead of today’s Lords debate on the legislation, Lord Forsyth said it was “extraordinary” that SNP ministers should continue granting planning permission in “defiance” of the law.
“If the Scottish Government is planning to ignore the law made by judges in a lengthy, clear and reasoned opinion, perhaps parliament should put the matter absolutely beyond doubt,” he said.
The Daily Telegraph disclosed last week how the Liberal Democrats are to table a separate amendment to the Energy Bill that would mean an Ofgem licence would not normally be required.
It was originally tabled in the name of Lord Stephen of Lower Deeside, a former Deputy First Minister and director of several wind farm companies, but he insisted this was an error.
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