To anyone who has failed to read beyond a few headlines, talk of a Scottish
energy crisis might seem strange.
Are we not net exporters of electricity, accounting for 28 per cent of
production in 2013? Are we not exploiting our unique advantages in
renewables, generating as much from those sources – fully 32 per cent of
the total – as we do from fossil fuels?
Perfectly true. Scotland has made great strides, but the path is littered
with obstacles. These could be summarised in a few words: baseload,
connection charges, and the subsidy regime for renewables. Yesterday’s
letter from First Minister Nicola Sturgeon to David Cameron on the threat
to the coal-fired station at Longannet in Fife brings all the arguments
into sharp focus.
Torness and Hunterston B, the nuclear stations, are due to shut down in
2023. The Scottish Government refuses to contemplate replacements. Before
yesterday there was a hope that Longannet would continue to operate until
2020. ScottishPower has been arguing since at least last October, however,
that, unless National Grid amends “discriminatory” charges for access to
the system, even that brief life ceases to be viable.
So it proves. The First Minister tells us that unless Mr Cameron acts – and
there is no sign of that – a decision on the station’s future will follow
within weeks. No one believes it will be a positive decision. ScottishPower
complains that it pays £40 million a year to be connected to the grid while
a similar station in the south of England, closer to “consumers”, pays just
£4m. For the company, this is unsustainable; for its workers, profoundly
worrying.
According to the Edinburgh Government, Scotland could move from being an
exporter of electricity to an importer if nothing is done. Closer to home,
baseload (crudely, “available in all weathers”) will become a pressing
issue. Ms Sturgeon argues that energy security across the UK is being
imperilled. These are serious matters.
Critics will say the Scottish Government’s refusal to have any truck with
nuclear, like its scepticism towards fracking and fossil fuels generally,
is short-sighted. A reliable energy mix is essential in the modern world
and the dream of renewables providing a 100 per cent electricity generation
equivalent will not be realised, coincidentally, until at least 2020.
That industry also complains about connection charges, yet it has seen
Ofgem delay the reform of grid access, despite promises to the contrary,
until 2016. Meanwhile, it awaits tomorrow’s announcement of the results of
a National Grid sealed-bid auction to decide which operators will receive
subsidies under the new Contracts for Difference.
For Scotland’s offshore wind schemes, and therefore for the country’s green
ambitions, the results will be crucial. Is energy policy best decided by a
crude blind auction designed solely to drive down short-term costs? That,
like the failure seriously to address complaints about the treatment of
Longannet, is open to question. The energy mix, whatever its constituent
parts, needs very careful planning.
Given the arguments over grid charges and renewables, Mr Cameron might be
advised to avoid using the electricity sector as a metaphor for UK unity in
the near future. Rational observers understand that the world must make the
change to cleaner energy sources. It is acknowledged on every side that
Scotland is best placed to provide renewable power. Its efforts should not
be hindered.
The biggest part of the electricity market might be in the south of
England; the future of renewable energy is here. Ofgem and Downing Street
should act accordingly. For now, Longannet and its workers remain key parts
of the jigsaw.
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