Single markets in electricity and gas covering the whole of Great Britain should continue if Scotland became independent, a new report has said. First Minister Alex Salmond has welcomed the report from the independent Expert Commission on Energy Regulation and said that Scotland needs a ‘radical approach’ to tackle fuel poverty.
The commission, which examined possible regulation of energy markets in an independent Scotland, says independence would give Scotland new powers to tackle fuel poverty, high energy costs and prices. It also highlights that a single GB energy market is the best option for consumers in Scotland, England and Wales.
The Commission’s report will be discussed by industry experts at a meeting of the Scottish Energy Advisory Board (SEAB) in Aberdeen today. Speaking ahead of the meeting the First Minister, said:
“This is a detailed and authoritative report and I am grateful to Robert Armour and his fellow Commissioners for their time, expertise and dedication. The Commission rightly recognises that independence will give Scotland new powers to tackle fuel poverty and reduce the impact of high energy costs and prices.
“This Government will continue to build on all its achievements in delivering energy efficiency and cost effectiveness and continue to improve delivery to disadvantaged and vulnerable consumers. The report rightly highlights that independence will open up new possibilities which could better address Scotland’s energy needs, and recognises that it is in our common interest to share energy resources across our borders.
“Scotland is a resource rich country and it offers safe and secure supplies of electricity and gas, and can continue to assist the rest of the UK in meeting its legally-binding renewable energy targets.
“It’s clear that a strategic energy partnership between our governments after independence represents the best outcome for all concerned and the Commission has clearly identified examples from across Europe – in Ireland, Iberia and Scandinavia – which show that this can be done.”
The Commission, comprising energy industry, consumer experts and academics, and headed by senior counsel and former SCDI chairman Robert Armour, was set up last year to offer independent advice on energy in an independent Scotland. Robert Armour, Chair of the Expert Commission, said:
“In the event of independence there are undoubtedly issues that will have to be settled between the two administrations. We share a common integrated system and have a common interest in energy security. Looking to Europe and beyond we found working models of cross-border partnerships delivering jointly-regulated integrated markets that show single markets can work with goodwill and cooperation.
“Eradicating fuel poverty has proved an intractable challenge. We believe a more radical approach is now needed. We see an opportunity to better target delivery to disadvantaged and vulnerable consumers through accessing data already held on social need. In the future we will be able to take this approach further using the improved data that will come from the roll out of smart meters.
“Scotland’s natural potential makes it a cost-efficient place to develop renewable resources. We see a benefit to both Scotland and the rest of the UK in enabling this economically efficient development of renewable potential to continue.”
The Commission’s report highlights:
- A continuing single GB energy market, which the Scottish Government has consistently supported, is the best outcome for consumers and investors in Scotland, England and Wales.
- Working models of combined energy markets, built on partnerships between separate countries and Governments, exist across Europe.
- An independent Scotland will need its own energy regulator, and that the Scottish Government’s combined regulatory model could successfully deliver this.
- The existing costs of renewable support mechanisms at the point of independence should continue to be spread across GB as at present.
- Importance of continued efforts and additional measures to tackle fuel poverty and energy efficiency.
Green Yes, the Scottish Green Party’s campaign for a Yes vote in the independence referendum, also welcomed the report recommending that an independent Scotland remain part of the GB-wide market for electricity and gas.
A Green Yes briefing on jobs points out that more than 11,000 people are already employed in the renewables industry and most firms are expecting to grow. Scotland has the offshore engineering skills to make marine renewables a success and create thousands more jobs in construction, grid development and research.
Alison Johnstone, Green MSP for Lothian and a member of Holyrood’s economy and energy committee, said:
“Energy is an issue that all countries are facing up to, and with our renewables potential Scotland has a chance to generate not just what we need but also energy for export to enable our neighbours to meet their low carbon targets. Encouraging the trading of energy not just within these islands but across the North Sea makes sense, and I see a Scottish Parliament with responsibility for energy policy much more likely to prioritise these issues.
“By contrast Westminster is locking us in to new nuclear with its massive costs and toxic legacy, and a dash for fracked gas that risks our local environment and our carbon budget. What today’s report from the Expert Commission on Energy Regulation underlines is that it’s sensible to co-operate on such a crucial issue but it’s vital that Scotland gets to decide the direction it wants to go in.”
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