Monday, 30 June 2014

Boost renewable energy by giving more energy powers to Scotland

As can be seen in the story and letter in the Sunday Herald, myself and others are calling for energy powers to be devolved in Scotland even if there is a 'no' vote on September 18th. Establishing a Scottish Energy regulator will boost renewable energy (and also, potentially energy efficiency programmes) by allowing Scottish authorities to alter regulations to allow electricity network companies to be more proactive in investing in upgrades of electricity networks.

Currently planned renewable energy projects are saddled with high charges for connecting their projects to networks because the costs of connection are assessed on a scheme by scheme basis. This is as opposed to the Networks being able to take a forward looking stance and invest in upgrades that will allow more schemes to be set up on the basis that they will be charged lower connection costs. This will benefit both large and small schemes, and community renewables projects above all who are the least able to argue with the grid connection quotes issued by the Network Operators.

Since network charges are calculated and paid by consumers on a network by network basis, such a change would have no consequences for consumers outside Scotland. So why should energy regulatory powers over such matters be reserved to Westminster and OFGEM?

A second idea promoted in the Sunday herald is that the Scottish Government should be given a big slice of the low carbon energy funds to allocate as they wish, rather than is at present happening where low carbon energy spending is being parcelled out to meet English priorities rather than Scottish ones. Scotland is not going to build any nuclear power stations. It wants renewables and it wants to be free to be able to choose the options and the levels and types of incentives for those options, which should not be dictated by English priorities. If a Conservative Government is elected then they will decide to ban onshore windfarms, and no doubt most of the money will, according to Tory priorities, be spent on nuclear power with a bit of funding maybe left over for English rooftop solar and English offshore windfarms.

In fact of course the low carbon programme would be much more cost effective if it was spent on onshore windfarms and onshore solar farms, both of which are being increasingly squeezed by political pressure from the Conservatives. Yet the Scottish Government could promote both these technologies as well as innovative marine technologies such as tidal stream technology, if it had control over some of the incentives.

Under Electricity Market Reform Scotland has been stripped of its powers to set incentives for renewable energy. The Treasury says that it will not allow the Scottish Government (SG) to set incentives that will increase consumers' bills outside of Scotland. But the Treasury could still apportion part of the funds that it caps for spending on low carbon energy (under the 'Levy Control Framework' - LCF) to be disbursed by the Scottish Government. That would not increase consumers bills outside of Scotland, and it would help solve an area of significant political conflict between Holyrood and Westminster.

But even the Scottish Labour Party, who you would think would be a bit more imaginative, has so far not embraced ideas such as these. The only mention of energy in their devolution discussion document issued in April was about Scottish Islands - but even that did not mention how giving more energy powers to the Scottish Government (SG) could help them, and the rest of Scotland of course. See

Why not? Do they prefer English Conservative priorities to predominate over Scottish ones? Or maybe they are so supportive of nuclear power that they want to stop any powers being given to Scotland to promote renewable energy? Surely not.

Among the three biggest unionist parties, the Liberal Democrats appear to leave the door open for enhanced powers for Scotland in the energy sphere. Points 167 and 168 of their document on a 'Federal UK' issued in 2012 say:

'matters such as energy policy and transport policy could
be dealt with by partnership-working, where the Scottish Parliament would
enjoy freshly enhanced rights to influence decision on these matters.
168. Strategic decisions over the National Grid, energy planning and the security of
energy supply, carbon trading and renewable developments are clearly of
importance to both federal and Scottish Governments. A more federal structure
lends itself to sensible decisions over the UK electricity market'

By contrast, Labour and Conservatives focus on taxation and spending powers in the economic/welfare sphere. OK, that's a very important issue, but in some ways they appear to be talking big whilst ignoring, or distracting attention, away from other very important issues - including low carbon energy issues. But there are big differences of priorities between Scotland and England on this subject, so this (low carbon energy) ought to be the focus of proposals on devolution.

The pro-independence parties are intrinsically advocating more energy powers being given to Scotland, and the Scottish Government's proposals certainly stress having a Scottish Energy Regulator. However, the lines of authority are not drawn as clearly as you might think. In the Scottish Government's 'Guide to An Independent Scotland' there is some ambiguity about the control over incentives for renewable energy. The SG appear to want the English to carry on paying for new renewables in Scotland whilst ensuring that the Scots do not pay for rUK nuclear power. After 2020, at least, that seems rather hopeful. There are thus still unanswered questions about who would pay the incentives necessary for new schemes in an independent Scotland.

I have argued, as the lead author of the 'DREUD Report', issued last December, that an independent Scotland in pursuit of its renewable energy targets would not necessarily be worse off in terms of electricity prices compared to continued union. Certainly this applies to a UK where everybody is lumbered with an expensive nuclear programme, especially if the Conservatives ideas of excluding most onshore renewables developments makes the renewables programme more expensive as well. However, it is not clear that independence would be superior to a 'devoplus' solution which included the reforms suggested above.

There is still a clear policy vacuum because the pro-independence parties (SNP and Greens) have not sketched out what they would prioritise in the way of further devolution the event of a 'no' vote, and the unionist parties' proposals are at best minimalistic and seem, for the most part, to imply something close to the status quo. We need also to have a discussion about the options for further energy devolution in the event of a 'no' vote on September 18th. Certainly one would hope that in this event the SNP and the Greens would come out with some clear plans for energy devolution - and hopefully they (and preferably also the unionist parties)  would take up proposals that would at least give effect to the aims expressed in the ideas in this blog.

For coverage of these issues in the Herald on Sunday see:

No comments:

Post a Comment