Utility Week

26 | JUNE 2021 | UTILITY WEEK Policy & Regulation Analysis What would Scottish independence mean for energy? David Blackman examines how energy issues play into the debate about Scottish independence, which has been reignited by last month's election result which saw the SNP just shy of an overall majority in Hollyrood. S cottish nationalists oen used to argue that the revenues from "our oil" would bankroll their dream of a future Scot- tish state. Of course, reliance on oil and gas revenues provides a far shakier base case for independence now than in the late 1970s, when the North Sea boom was taking off. However, while oil and gas can no longer be counted on as a fiscal banker, surging renewables deployment north of the border looks set to give a fresh lease of life to the case for independence. The industry's concerns did not figure highly in the election campaign itself, which is unsurprising given that energy is a matter largely reserved for the UK parliament and has been delegated to Holyrood. However, this hasn't stopped the Scot- tish National Party (SNP) government setting bold targets for the transition to decarbonisation. Holyrood has been consistently one step ahead of Westminster in terms of emissions reduction targets throughout the lifetime of the current Scottish Parliament. In 2017, MSPs backed a 90 per cent reduction in emission levels on 1990 levels when the UK- wide target was still 80 per cent. And now the SNP has committed to Scot- land becoming net zero by 2045, five years ahead of the UK as a whole, a move that reflects advice issued by the Climate Change Committee. Scotland's abundant offshore and onshore wind resources means the country is already potentially self-sufficient in renew- able electricity. According to recently pub- lished figures, renewable generation met 97.4 per cent of Scotland's electricity demand in 2020. "An embarrassment of riches," is how Josh Buckland, who was a special adviser in government at the time of the 2014 inde- pendence referendum, describes the energy picture north of the border. Looking to NPF4 Planning and housing are the key areas where the Scottish government's powers have an impact on energy. Within these areas, the industry's eyes will be most closely fixed on the new Scot- tish National Planning Framework (NPF). The document is not due to be laid until later this year, meaning the proposals will not be implemented until mid-2022. Simon Markall, head of public affairs at Energy UK, says: "This timescale for the passing and implementation of the NPF4 does not reflect the urgency with which we feel the Scottish government should be mov- ing. We'd like to see steps taken to speed up the implementation of the NPF4 to help provide signals and certainty to the sector to support delivery of the Scottish govern- ment's net zero ambitions." Energy UK's recent manifesto stressed the importance of cooperation both within the Scottish government and between Holyrood and Westminster. The limited devolution of energy pow- ers extends to regulation, where Ofgem's remit runs exactly the same both sides of the border. SNP MP Angus MacNeil MP, who chaired the Commons Energy And Climate Change Select Committee until it was disbanded in 2016, shares the "frustration" in his party with the relatively high level of transmission network charges generators must pay to con- nect to the grid in Scotland's more remote corners. What SSE has dubbed a "premium" is particularly acute in the Scottish islands, which contain some of the UK's biggest onshore wind projects, such as the proposed Stornoway wind farm on the Outer Hebrid- ean Isle of Lewis. What MacNeil, whose Na h-Eileanan an Iar constituency (formerly called Western Isles) covers Lewis, describes as a "worship of the market" leads to a "crazy situation" where islands that generate more electricity than they consume are "penalised" by distri- bution costs. "If we abandoned that nonsense and looked at the diversity of our energy, we would have interconnectors to those islands," he says. "No other government in Europe would be governing the windiest

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