Higher energy bills and poorer energy security would be two of the major side-effects of Scotland gaining independence from the UK, experts have warned.
Research carried out by the David Hume Institute at the University of Edinburgh indicates that the economic effect of Scottish independence would be more significant than many people have presumed, particularly in the energy sector, where household bills would be substantially impacted.
In one paper, Consumer Focus Scotland says that although a third of renewable energy in the UK is generated in Scotland, it is subsidised by all British consumers, which accounts for around £37 a year per bill.
Bills bearing the brunt
Without the rest of the UK subsiding this, Scottish consumers’ energy bills would take the hit, and this would not be the only drawback of independence, the research indicates.
A study carried out by experts at Strathclyde University suggests that if Scotland attempted to ensure security solely through Scottish capacity, the financial ramifications would be great.
“From the perspective of the UK as a whole this would be an extraordinarily inefficient way of achieving security of supply,” the Express reports the study as saying.
Another problem, according to Consumer Focus, could be British consumers’ willingness to pay for Scottish renewables, as Scottish First Minister Alex Salmond has previously expressed his intention to generate the equivalent of 100% of Scottish consumers’ consumption from renewables by 2020.
The Consumer Focus study adds: “There could be political concerns that consumers in England and Wales were continuing to subsidise renewable energy generation in Scotland.”
Decreased investor confidence could be a further knock-on effect, which would increase the cost of future investment and mean Scottish consumers subsidised this through their energy bills, the report concluded.
There is some way to go before a decision is made on whether Scotland will gain independence from the UK, but the potential knock-on effect on energy bills will be a bone of contention for members of the public affected by the move.