Policy and Scotlands Constitutional Future Setting the Scene John Paterson University of Aberdeen The legislative background Scotland Act 1998 Created Scottish Parliament and Scottish Executive now Government ID: 263828
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Slide1
Energy Policy and Scotland’s Constitutional FutureSetting the Scene
John PatersonUniversity of AberdeenSlide2
The legislative backgroundScotland Act 1998Created Scottish Parliament and Scottish Executive (now Government)
Reserved certain powers to the UK ParliamentAnything else is deemed to be devolvedDevolution of reserved powers possible by secondary legislation
2Slide3
Reserved mattersSpecific reservations in Schedule 5 include the following:Generation, transmission, distribution and supply of
electricitythe ownership of, exploration for and exploitation of deposits of oil and natural gasCoal, including its ownership and exploitationNuclear energy and nuclear installations
3Slide4
Devolved powersDespite the general reservation, some energy matters have been devolved by secondary legislation to Scottish
Ministers, including: the Renewables Obligation in Scotlandconsent for power stations >50 MW
onshore and >1
MW
offshore
4Slide5
Other relevant powersOther legislative powers impact upon energy projects, including:FiscalEnvironmental regulation
PlanningOf these, fiscal powers are reserved, whereas environmental and planning are devolved
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The current positionThus, even though energy is a reserved matter, the net effect in Scotland of the deemed and executively devolved powers is:Significant development
of renewable generating capacityEffective block on new nuclear development6Slide7
Other relevant factors Energy developments are also influenced by GHG emission reduction and renewable targets
, in relation to which the Scottish Government has been more ambitious:Reduce GHG emissions by 42% by 2020 (UK target 34%)20% of all energy from renewables by 2020 (UK target 15%)
Aim to
decarbonise
electricity generation by 2030 (no UK target)
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Comparative advantage - renewablesScotland possesses natural advantages
to make such targets more achievable:1% of EU population25% of wind resource10% of wave resource25% of tidal resourceCO2 storage capacity > Germany, Netherlands and Denmark together
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Obstacles?The Scottish Government has identified potential challenges, including:The transmission charging system
militates against electricity generation in the north of Scotland while effectively offering a subsidy in the south-west of England9Slide10
The oil and gas advantageIn addition to a comparative advantage in relation to renewables, Scotland would also have significant
hydrocarbon reserves:Estimates vary, but the fact that 90% of UKCS production to date has been in Scottish waters indicates possible future scenariosNB delimitation of an international maritime boundary need not follow the median line approach on which this figure is based
10Slide11
The future of oil and gas?The Scottish Government suggests that devolution of fiscal powers in relation to oil and gas would allow for
a regime better adapted to the needs of the maturing provincethe establishment of an oil fund11Slide12
Calman Commission on DevolutionRecommended energy remain a
reserved matterSaw merit in a UK-wide approach......but interestingly did not address transmission charging, as believed it was beyond their remit
Preference for UK approach
to energy
premised on perceived benefits in terms of
security
of supply,
meeting international
targets
service to
consumers
12Slide13
Scottish Government’s riposteScottish Government felt Calman’s analysis missed the point that existing arrangements did not allow Scotland’s
full energy potential to be realised 13Slide14
A complex picture - renewablesTransmission charges v
support for renewables under Renewables Obligation Transmission charges are higher in Scotland, butOne-third of renewables
support goes to Scotland, while Scotland only has 10% of households
Energy Bill
: how will matters look under the new Feed-in Tariffs with Contracts for Difference?
Would an independent Scotland with expensive
renewables
find itself in a
buyer’s
or a
seller’s
market in the EU?
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A complex picture - hydrocarbonsWhat are the regulatory resource realities of devo
max or independence?How will current licences be affected?What are the tax implications for companies operating north and south of the border?Will uncertainty affect
investment decisions
? Any delay would exacerbate the problems caused by ageing infrastructure
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ConclusionsScotland has significant hydrocarbon and renewable resourcesIn the
best-case scenario, an independent Scotland or one with devo max could reap significant rewardsIn other scenarios, things could be much tougherThe referendum is a very high-stakes game for the whole
UK...
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