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Energy - PowerPoint Presentation

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Energy - PPT Presentation

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

energy scotland renewables scottish scotland energy scottish renewables powers reserved oil government transmission devolved significant including approach targets relation

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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

5Slide6

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)

7Slide8

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

8Slide9

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?

14Slide15

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

15Slide16

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...

16