Scottish independence could damage Alex Salmond’s drive for wind power by
breaking up the UK energy market, one of the country’s largest renewable
power companies has warned potential investors.

By Simon Johnson, Scottish Political Editor

Infinis said separation could have an “adverse effect” on its operations,
future and finances by casting doubt over the UK’s subsidy regime and
Scotland’s position in the EU.

The impact could be “significant” thanks to the “division” of its customer
base and a separate Scotland creating different policies or legislation,
the company said.

In addition, Infinis said the firm’s prospects could suffer if Scots reject
independence and powers over energy policy are devolved to Holyrood by the
UK Government.

The warnings were made in a 252-page prospectus for potential investors
ahead of the firm’s upcoming flotation on the stock market, which is
expected to generate up to £930 million.

In a section of the document highlighting “risks” to its profitability, the
firm highlighted both the referendum on Scottish independence and the
Tories’ plan for a vote on EU membership.

It follows previous warnings that an independent Scotland’s households
would face a steep increase in their energy bills to fund wind farm
subsidies, with a disproportionate number of turbines built north of the
Border.

Ed Davey, the Energy Secretary, has said the remainder of the UK would be
under no obligation to buy renewable energy from Scotland, which would face
“serious competition” from other countries like Ireland.

But Alex Salmond has insisted that the UK-wide energy market would continue
as normal after independence, with the English being forced to subsidise
and buy Scottish wind power to keep the lights on.

Tom Greatrex, Labour’s Shadow Energy Minister, said the Infinis prospectus
“demonstrates yet again the SNP’s confused and contradictory energy policy
is seen as a risk with the significant players in the energy sector.”

The Rutherglen and Hamilton West MP added: “With more than a third of all
UK support for renewable energy coming to Scotland and less than one-tenth
of the population, it makes no sense to break that up.”

The Infinis prospectus said the firm is the UK’s third largest renewable
energy generator, with a 7.3 per cent market share and seven wind farms in
Scotland.

Highlighting risks, it said the company faces “uncertainty” if Scottish
voters back independence next year.

“The effects could be significant if the Scottish Government were to be
given full autonomy, particularly as this could lead to a division of the
UK electricity market and new renewable policies or legislation for
Scotland,” it said.

Independence or handing Holyrood control over energy policy as part of an
extended package of powers “could have a material adverse effect on the
Group’s business operations, prospects, financial condition and operational
results.”

No specific details on how a separate Scotland’s energy market would work
have been published, the document said, with uncertainty over its
“budgetary constraints” and EU status.

The prospectus also warned that the UK leaving the EU following the Tory
referendum could harm its business as the European target of generating 15
per cent of energy from renewable sources would no longer apply.

A Scottish Government spokesman said it “has a clear commitment to
renewable energy that offers opportunities to any company involved in the
sector.

“Scotland’s success at securing inward investment is clear and there is no
sign of investors being deterred from coming to Scotland.”

Meanwhile, SNP ministers would be forced to heed a court ruling that
threatens the spread of wind farms across Scotland, under proposals being
tabled in the House of Lords today.

Lord Forsyth of Drumlean, the former Tory Secretary, said he planned to
table an amendment to the Energy Bill requiring wind farm companies to have
a licence before applying for planning permission.

The move would place in statute a Court of Session ruling last month that
developers require such a licence from Ofgem, the industry regulator, for a
wind farm to be legal.

The Tory peer decided to table the law change after SNP ministers announced
they would ignore the ruling by Lady Clark of Calton, one of Scotland’s
most senior judges, pending an appeal next year.

They said they would continue granting planning permission to wind farm
developers without a licence to generate electricity because turbines are
in the “national interest”.

It had been thought the ruling would stymie the spread of large wind farms
as developers rarely obtain an Ofgem licence before applying for planning
permission.

Speaking ahead of today’s Lords debate on the legislation, Lord Forsyth
said it was “extraordinary” that SNP ministers should continue granting
planning permission in “defiance” of the law.

“If the Scottish Government is planning to ignore the law made by judges in
a lengthy, clear and reasoned opinion, perhaps parliament should put the
matter absolutely beyond doubt,” he said.

The Daily Telegraph disclosed last week how the Liberal Democrats are to
table a separate amendment to the Energy Bill that would mean an Ofgem
licence would not normally be required.

It was originally tabled in the name of Lord Stephen of Lower Deeside, a
former Deputy First Minister and director of several wind farm companies,
but he insisted this was an error.


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