A ‘yes’ vote in Thursday’s Scottish independence referendum would “slam the brakes” on Scotland’s renewable energy sector, according to analysis from Bloomberg New Energy Finance.
BNEF said the uncertainty created by a yes vote would cause short-term damage to clean energy investment in Scotland as banks and developers are “gripped by uncertainty” over the future shape of the country’s power market and renewables incentives.
Scotland has led the way in the development of wind energy in the UK, and is beginning to find its way on to the map for solar.
But BNEF said that in the event of a vote in favour of independence the negotiations between Scotland and the UK over energy would likely be complex, tough and lengthy.
Kieron Stopforth, analyst at Bloomberg New Energy Finance and author of the research, commented: "During this period of negotiation, with oil, power and renewables support under discussion as well as the currency, defence and national debt, clean energy investors would feel less than confident about future prospects, and decisions will inevitably be delayed.
"These delays could hit projects in the whole of the UK for a time, but the longer-lasting effect would be on those in Scotland if they are unable to compete for support under the Renewables Obligation or Contract-for-Difference schemes," Stopforth added, in reference to the UK’s existing and new support mechanisms for large-scale renewable energy projects.
BNEF claimed England and Wales have only limited dependence on Scotland for power. In 2012, they imported less than 4% of their net electricity consumption from Scotland, compared to 4.7% from Europe. With lower absolute generation levels and less interconnection capacity, Scotland may be more reliant on England and Wales as a customer than they are on Scotland as a generator, BNEF said.
Michael Liebreich, chairman of the advisory board at Bloomberg New Energy Finance, said: "The number one priority for Europe's energy sector is to achieve higher levels of market and technical integration, to balance variable renewable generation. Any change that threatens that, especially if it creates a long period of uncertainty, is a step in the wrong direction. A 'yes' vote would be likely to slam the brakes on the Scottish renewable energy sector."