Utility Week

16 | 1ST - 7TH AUGUST 2014 | UTILITY WEEK Scottish referendum I f, when the UK wakes up on 19 Septem- ber, the Scottish electorate has voted in favour of independence, a messy period of negotiation will begin between ministers in Westminster and Holyrood. The negotia- tions will aim to clarify some of the issues to which we have not yet had a de• nitive answer. These issues go beyond the utilities: what currency will an independent Scotland use? Will it be granted EU membership? For energy and water, the answers are likely to come further down the line once those signi• cant issues have been resolved. If, as the SNP has stated is its aim, a single pan-utility regulator is created, the scope for divergent energy markets has been created – regardless of whether the single market is maintained. And if the major UK political parties have their way – it won't. This has implications for trading, retail and the networks. Nothing can be worked on here until the bigger, over-arching issues have been settled. If the regulatory regime is diˆ erent, and there is a separate market, the transmission links between England and Scotland could become focal points for disagreements. How will National Grid link into the Scottish net- work – especially if everything really is up for grabs? Will rUK and Scotland end up replicating the trading model experienced by Germany and France – with cheap, maybe even nega- tively priced – electricity ‹ owing south? With retail, everything will remain up in the air. Will the suppliers decide it is too complicated and exit Scotland, or will they set up a regional subsidiary? How much will Vote steers utilities into uncharted territory costs go up to compensate for the loss of sub- sidies from the UK? And how will the ongoing CMA inquiry and the issues of competition – with the prospect of a Scottish big two – be aˆ ected? So far, there are more questions than answers – with both political parties still pushing their campaign cases, and the com- panies involved keeping quiet for fear of being seen to back one side or the other. The campaigns have become the SNP wishlist against the Westminster warnings. There is relatively little information on what would happen a' er a yes vote. There is only one way to • nd out and that is as it hap- pens, should Scotland decide to go it alone. However, the big question – and the one the referendum rests on – is will the Scottish electorate be willing to take that gamble? MB "We'd like to see Scotland remain part of the United Kingdom." Ben van Beurden, chief executive of Shell "I can't see any reason why Scotland shouldn't be independent – it's a country with different attitudes, people and outlook." Gerard Butler, actor "Going independent would cost everyone a lot of money in Scotland. Who'll pay for it? The taxpayer, and that's me and I don't want it." Colin Montgomerie, golfer "Scotland, stay with us." David Bowie, musician "I think Scotland has earned the right to its own nation status. It has earned the right to control its own destiny." Brian Cox, actor "Leaving the UK would mean the British pension stops, the national insurance fund that you're paying into is broken up." Gordon Brown MP "Ludicrous." SNP MSP Dr Eilidh Whiteford, on Gordon Brown's pension assertions You can quote meon that. BIG PICTURE Scotland as a share of the UK (2012) Population 8.3% GDP 7.7% GDP with North Sea oil 9.2% Economic highlights Scotland's exports in 2012, international and rest of the UK (£bn) Population (5.3m) Under 16: 17.2% 16-64: 65.4% 65-74: 9.5% Over 74: 7.9% Goods Services Oil & gas Services 8.7 13.8 13.8 10.7 25.3 8.7 22.3 17.3 7 6 5 4 3 2 1 0 Forecast North Sea oil revenues in Scotland (% of GDP) 12/13 14/15 19/20 24/25 29/30 34/35 39/40 Scottish government Offi ce for Budget Responsibility £150bn £124bn GDP GDP without oil 30 25 20 15 10 5 0

• Cover