Going green

Dave Toke explains how Scottish independence will boost green energy 

If, as now seems likely, Scotland becomes independent in the next five years, green energy should get a major boost. A Scottish Government will have the unconstrained ability to offer contracts to supply low cost renewable energy which could be sold not only to England but also to a European continent eager for renewable energy. Meanwhile, Scottish electricity consumer prices could be reduced by avoiding the extra costs of building nuclear power stations in England and Wales.

Opinion polls are showing more consistent support for independence these days, and the UK Government consistently talks to an English audience rather than a Scottish one as it negotiates the fallout from Brexit. The story from London that surely the Scottish people prefer being run from Westminster than being run from Brussels indicates just how little they understand Scottish nationalism. Many nationalists would say that they would prefer to be run over by a bus than run by Westminster!

It is uncertain as to what level of integration with the EU would transpire, but there would certainly be a lot of interest in building more interconnectors to trade with the European continent, perhaps via Norway. The Germans in particular may well be interested in boosting their renewable energy by buying in wind power from Scotland. Although there are still substantial potentials from onshore wind, and also lots of potential for solar power, even this is dwarfed by the massive amounts that could come from Scottish offshore waters, especially using the developing floating wind technologies. If, on top of sufficient renewables to power Scotland’s own energy consumption, say, 40GWe of offshore wind was installed, Scotland could earn a billion pounds a year if the Government charged £5 per MWh export levy. This would be a very useful sum, although only around a tenth of the income that used to come from oil and gas revenues in good years.

It seems most likely that Scotland would continue to be part of the British Electricity Transmission and Trading Arrangement (BETTA) – tearing up lots of expensive transmission arrangements does not seem to make much sense to either England or Scotland. Ofgem would be responsible for electricity trading throughout Britain, while control over dishing out electricity generation contracts in Scotland would revert to the Scottish Government. At the moment, under the terms of Electricity Legislation, regulations covering electricity generation are the preserve of the Westminster Government.

The Scottish Government would have the ability to issue its own long term contracts for electricity supply (and also set up trading in demand-side management). Importantly, Scottish electricity consumers would not have to pay surcharges to fund new nuclear power. Hinkley C will not be online anyway by the time of independence, and certainly nothing else in the way of new nuclear. Westminster could still threaten to stop the payments of renewable energy obligation certificates for Scottish windfarms (it did in 2014), but by 2024 all of the windfarms will have paid off the bulk if not all of their bank loans anyway.

Meanwhile, the Scottish Government could issue many contracts for large amounts of renewable energy for wholesale power prices that are no higher than what would be paid anyway. Currently, the power to issue such contracts, called contracts for difference (CfDs), is held by the Westminster Government. But in the case of Scottish independence this power would be held by Holyrood.

In the extreme event that Westminster demands that Scottish people pay for new English nuclear power stations as a condition for continued participation in BETTA (the ending of which would disrupt English electricity markets), then, at least in the medium term, Scotland could have its own independent electricity supply system.

Scotland could balance the offshore wind variability with various methods, including bigger use of batteries to even out daily renewable fluctuations, but it could easily be 100 per cent renewable using ammonia or some other substance as a means to store renewable energy in the longer term. The renewable energy would be stored at times when electricity prices, and therefore the costs of the renewable energy, were low. Then the stored energy would be generated using what are very cheap gas turbines or gas engines when there was not enough renewable energy, battery or interconnector-based etc supplies to meet demand. An ammonia-based, long term storage system is not just fantasy. It is coming soon: a facility to convert renewable energy into ammonia as a means of storing hydrogen is actually going to be deployed in Saudi Arabia.

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