On 18 January, the Scottish Constitutional Futures Forum held its second public event – a seminar at the University of Strathclyde on Energy Policy and Constitutional Change. We chose this topic for early discussion because of its importance to the SNP’s economic and political case for independence. The ability of Scotland to control and fully exploit her considerable natural advantage in relation both to oil and gas (a mature, but not yet declining, industry, as Greg Gordon explained at the seminar) and renewable energy has been central both to the perceived economic feasibility and the political desirability of independence. But even if Scotland remains within the Union, there is a case for greater devolution of energy powers (as is already the case in Northern Ireland).
As I argued in my own paper, although energy policy goals are likely to be largely the same both north and south of the border, there are a number of reasons why Scotland might wish to pursue distinct policies compared with England and Wales in order to secure those goals. In addition to differing natural resource endowments, these include differences of geography and climate, housing stock and economic conditions, the legacy of historically separate energy industries, and divergent political values (most notable currently in relation to nuclear generation and renewable energy targets). Although, as David Wilson emphasised in his summing up, the Scotland Government makes the most of its currently limited legal competences in the energy field, it nevertheless faces considerable constraints, especially given what he described as the ‘messy overlap’ of reserved and devolved powers.
As John Paterson concluded in his paper, the referendum is therefore a very high stakes game. On the one hand, constitutional change offers exciting opportunities for Scotland to fully realise its potential as a leading energy producer within Europe, whilst meeting social and environmental objectives more effectively. Anita Rønne provided an inspiring account of the way in which Denmark has transformed itself since the 1970s, through concerted government action, from a country wholly dependent on energy imports, to one which is now fully self-sufficient, and which aims for total decarbonisation of its energy system by 2050.
On the other hand, an independent Scotland would undoubtedly face significant risks and constraints in meeting its energy policy goals. These would include: exposure to world energy prices and fluctuating hydrocarbon output; the constraints (but also reassurances) provided by European Union law; the difficulty of financing continued investment in renewables, especially as a result of regulatory uncertainty; the challenges of continued integration with the Great Britain electricity market (although, as Paul Gorecki discussed, there is a relevant example of successful cross-border integration within the All-Ireland Single Electricity Market); and problems of limited regulatory capacity.
If you are interested in hearing more about the issues discussed at the seminar, an audio recording is available, as well as the speakers’ slides.
Aileen McHarg is Professor of Public Law at the University of Strathclyde.