In a relatively short time, renewable energy has become an integral and growing part of Scotland’s energy mix. In a country with just 8% of the UK’s population, Scotland accounts for around a quarter of UK capacity and over two-thirds of renewable power in the devolved administrations. This underlines how far Scotland has come from dependence on oil and gas production, and how much it has contributed to meeting the UK’s carbon reduction targets. It is rightly recognised as a success story, and is a global leader among the countries determined to make the transition to a low carbon economy. Yet, looking closer, the fragility of this trend is apparent.
Scotland’s renewable energy sector is intimately linked to the rest of Europe in its corporate ownership links, the sale of its power and the purchase of its equipment and infrastructure. Changes in the UK relationship to Europe will inevitably impact on Scotland whatever the form of Brexit and/or Scotland’s political future. Scotland has already dealt with considerable policy uncertainty due to the current structure of devolution; as a part of the UK, the Scottish Government has only some devolved powers over renewable energy with the rest reserved to the UK Government. This has led to increasing divergence between Scottish and UK policy, with Scotland arguably more aligned with the EU as a result.
With Brexit, all the policy-makers – at Holyrood, Westminster and Brussels – will have to review their commitments to renewable energy but, just as importantly, to subsidies, infrastructure and tariffs. Investors – from the USA to China – will be weighing their options very carefully in light of the withdrawal arrangements. Contracting, supply chains, subsidies, financing and trading will all be affected. Uncertainty about costs will soon become a fact of life for the sector.
Yet policy support cannot simply dissolve into the mist. As the Paris Agreement on climate change takes effect, the commitments to the sector will continue from the EU, from Westminster and crucially from the Scottish Government in Holyrood. To date, their policies have helped to change the economics and acceptability of renewable energy in ways no-one could have expected ten years ago. So, what should they be doing now to mitigate this uncertainty? What form should further support for the sector take when EU support mechanisms cease? And what is the likely trend of EU policy on renewable energy as it plans to introduce a series of new measures across the member countries? Will the EU be negative or retaliatory or will it be cooperative? One key issue will be the degree of continuity or change evidenced by the UK renewables sector going forward.
Renewables After Brexit was not a conference to discuss the form of Brexit or the pros and cons of it. Rather, it was a sharing of knowledge to inform our conversation about Scotland’s energy future at a time of energy and political transition; a time when the next round of policy choices may well determine what the future will look like and indeed whether it has a future.
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Centre for Energy, Petroleum and Mineral Law and Policy - University of Dundee
Scottish Energy News
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