Scots’ Independence may impact the Light Switch as well as the Nuclear Button

David Cameron’s visit to Glasgow recently was important for two reasons:
(i) an old Etonian has not been seen in Scotland outside grouse season since Wee Willy Wales went to St Andrews;
(ii) it highlighted the difficulty of having nuclear bombs based somewhere that might be a foreign country within 18 months.
The sensible solution to (ii) may be to decommission the nuclear submarines altogether.  Cameron does not appear to favour that option, and though Alex Salmond is possibly the UK’s closest thing to Dr Evil, it is a younger, rounder megolomaniac with a signature 80s haircut that provides the justification.   Apparently, we need nukes to defend ourselves against North Korea (PRK).
Cameron’s logic is flawed.  No matter how much rhetoric comes from Kim Jong-Un, kim-jong-un the idea that our 4 nuclear subs that can barely find their way out of the Western Isles add up to deterrent when PRK is currently shadow-boxing with the US (nuclear arsenal of 5113 warheads that could be delivered almost anywhere on the planet within minutes) is a little bit far-fetched.
And in case you hadn’t noticed, we are skint.
The £20bn cost of a new Trident would be come in handy indeed, for things like schools, hospitals and state funerals.   Kim Jong Un may be happy to starve his people in order to have a big nuclear toy, but it’s kim-jong-unnot a trend I think we should be following.   Those funky suits on the other hand……
But it is the decisions on Trident’s location that was the main point of the visit.
My concern is that while the strategic importance of Trident’s base is key, there is another fall-out from independence that could have a more immediate impact.
A refusal by an independent Scotland to export electricity to the UK could seriously undermine England and Wales’ ability to keep the lights on.
To illustrate the problem, figures published by DECC late last year show the imports and exports of electricity from different countries in the UK between 2008 and 2011.
The headline figures show that England consumes 82.0 per cent of the power used in the UK.  However she only generates 75.5 per cent.    The result is that ‘both Scotland and Wales are net exporters of electricity, with England importing electricity from
both countries and from continental Europe (via the France and Netherlands interconnectors).’
While England’s share of the consumption pie has not changed a great deal over recent years, Scotland’s role has begun to shift as the Scottish Government moves towards its goal of generating 100 per cent renewable power by 2020.
The analysis shows that in 2010, Scotland exported 20.6 per cent of the electricity generated there to consumers elsewhere in the UK and this rose to 26.1 per
cent in 2011.
Crucially, transfers from Scotland to England rose by 45 per cent between 2010 and 2011, to a new record high, as Scottish generation increased and consumption fell.
Some of the changes are as a result of fluctuations in gas and coal prices, as well as rainfall variations impacting hydro generation in Scotland.  Some English generation capacity is not being sweated fully.
However, the trend of the past few years is clear; Scotland is producing a greater share of the UK energy pie, leaving England and Wales more reliant on our infrastructure assets north of the border to ensure security of supply.
England and Wales can, of course, continue to import power across the interconnectors with France, the Netherlands and the Republic of Ireland.
But should Scotland become independent in 2014, power generated in Scotland would join that trio – switching it from a DECC accounting exercise, to a matter of foreign affairs.
And this diplomatic discussion is likely to come at a price.
Having a reliance on imported electricity opens the country up to price shocks caused by political or economic circumstances far beyond the UK Government’s control.  This risk is additional to the price fluctuations of fossil fuels that could push up costs of domestically generated power.
Paying through the nose for imported gas to generate power at home as well as being held to ransom for power generated abroad will create a double whammy for UK consumers and businesses.Energy-bills-006
The politics could be fascinating.  Could an independent Scotland use energy as a bargaining chip over the location of assets (including defence assets) on Scottish soil?  Could any major diplomatic dispute between Westminster and Edinburgh result in a switch off?
Realistically the owners of Scottish-based generation assets would be reliant on the demand coming from across the border to continue to operate.  However, for those generators, independence opens up a whole new set of problems as they are suddenly located in a different country to a major demand source, not to mention the risk of subsidy regime change, regulatory upheaval or even nationalisation.
Despite these important questions for the UK, Scotland and the generating companies, there is nothing to deal with this situation in the Energy Bill currently being scrutinised by the Westminster parliament.    The only confirmation I have heard is that Ofgem has working groups ‘looking at this’.
One of the key objectives of UK Government energy policy is to deliver ‘safe, secure and future-proof supply’ of energy.  The most basic means of doing so in the context of electricity is to generate enough power within a country’s own borders to meet demand. As Scotland considers independence, the Welsh Government is also asking for control of energy generation in its response to the Silk Commission.
So as major decisions are taken on the constitution of the UK, perhaps Cameron should focus his attention on ensuring we keep control of the light switch, rather than worrying about the nuclear button.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: