Potential impacts of Scottish independence on Solar PV installations
In six months’ time, Scottish residents will vote in the independence referendum, and the outcome of this referendum will have a significant impact on the continued development of Solar PV and other forms of renewable energy in Scotland.
Potential ramifications from Scottish Independence
The Better Together camp argue that Scottish Independence would halt the growth of green power in Scotland, with Labour’s shadow energy secretary Caroline Flint stating that one third of total British investment in renewable energy comes to Scotland, while Scottish consumers contribute less than one-tenth of the cost of support for clean energy.
That financial support would be set to rise sharply this decade from a current £2bn a year to nearly £8bn a year by 2020, when the current system of Renewables Obligation Certificates and feed-in tariffs is largely replaced by a new system of “contracts for difference”.
By becoming independent, any companies who were looking to invest in the renewable energy sector in Scotland would not be able access the subsidies which are currently offered to them from the UK government, such as feed-in tariffs. The independent Scottish government would have to develop their own renewable policies and subsidies for renewable investment, and during the development of these policies potential investors would be put off from investing in Scotland.
Another uncertainty would be the possibility of increased energy bills for Scottish consumers in order to subsidise the disproportionately high number of turbines in Scotland compared to other areas of the UK, which the independent government would need to pay for and would therefore be added to consumer’s bills.
In addition, the Energy Secretary Ed Davey has warned that there would be no obligation for Westminster to continue to buy Scottish-generated power, with competition from other markets such as Ireland, France and the Netherlands.
Potential opportunities from Scottish Independence
However, there are also arguments from those who support an independent Scotland that Scotland is currently in a much stronger position with regards to capacity margin compared to south of the border, which would mean that the energy market in the UK would continue to rely on the importation of substantial quantities of electricity from Scotland.
Scotland is already a net exporter of electricity, with huge recent growth in the deployment of renewable generation, and without Scottish generation and Scottish renewable energy, the spare capacity margin across the GB grid would already be in negative figures.
Following independence, Scottish renewable energy will continue to represent the most cost-effective means for the rest of the UK to meet its renewable ambitions.
Between January 2010 and April 2013 the renewable energy industry announced £13.1 billion of investment with an associated 9,100 jobs. The Scottish Government has committed to continuing increasing capacity in Scotland, as they state that without the use of windfarms, Scottish customers will face higher bills by up to £166 per year within a decade.
The independent Scottish Government has proposed plans to establish an Energy Partnership with the Westminster Government to ensuring that the two governments jointly steer the approach to the energy market and also that Scotland's long-term interests are better served.
Through this partnership, it is proposed that the Scottish Government can ensure that new investment in Scottish generation is not compromised by any decisions taken by the Westminster Government, such as their proposals to overhaul the structure of the electricity market.
In addition, the proposed nuclear stations which Westminster have granted permission for will significantly increase energy prices for consumers, but an independent Scotland would not have to subsidise these nuclear plants, which would mean that Scottish consumers would not have to pay these increased prices.
In order to provide the best solution to future energy generation in independent Scotland, it has been proposed that Scotland would continue to participate in the GB-wide market for electricity and gas, reflecting the integrated transmission networks between Scotland and the rest of the UK.
This would mean that Scotland would continue to provide safe and secure supplies of electricity and gas, as well as helping the rest of the UK to meet its renewable energy targets. This is also in line with the trend for increasing integration of energy markets across Europe.
An independent Scottish electricity system could also be designed to suit renewable electricity rather than conventional centralised power generation, such as ending the priority to Feed-in Tariffs given to the big energy companies over independent generators. This would also help the growing community renewable energy sector.
Effect on Solar PV
From the information discussed thus far, it is clear that there is a great deal of uncertainty on renewable energy in an Independent Scotland with regards to continuing to receive subsidies.
Both commercial and domestic installations of solar photo-voltaic (PV) system currently receive Feed-In Tariff (FiTs). FiTs have replaced government grants as the main financial incentive to encourage uptake of renewable electricity generating technologies, to help meet the target of 15% of total energy from renewables by 2020. FiTs can be generated from most domestic technologies in all sizes up to 5 megawatts, including solar PV and wind turbines
However, as previously mentioned, solar PV installations in an independent Scotland would no longer receive these Feed-In Tariffs from Westminster, and it would be therefore be required by the Scottish Government to establish a new form of green energy subsidies.
Campbell & Kennedy are approved MCS solar installers, with vast experience in carrying out installation, commissioning, MCS certification and FIT registration of Solar PV systems. Campbell & Kennedy manage the whole process from feasibility study, design, installation and commissioning to customer liaison.
For more information please contact [email protected] or call 0141 435 7774.
Source: Campbell & Kennedy Blog