The UK government has stated that Scottish independence will lead to a drop in energy bills for those living in England and Wales.
The main reason given for a drop in energy costs is the reduction in the level of subsidies British homes would have to pay in order to fund renewable energy schemes in Scotland.
In stark contrast, the Scottish National Party (SNP) has not only said the claims are untrue, but added that bills will drop by 5% in Scotland should it become independent.
Cost of renewable schemes
According to a recent analysis, published at the request of Energy Secretary Ed Davey, an independent Scotland would be required to cover the cost of its renewable energy projects in full. A situation which Davey said would add hundreds of pounds to the average Scottish home’s energy bill.
The SNP disagreed with the paper’s findings and argued that independence would see England and Wales obliged to import green energy in order to meet their renewable quotas. Scotland’s green electricity sources, the party said, would help keep energy costs low across Scotland, England and Wales.
Deputy Leader of the SNP, Nicola Sturgeon, last year said that if Scotland became independent it would get rid of certain British levies on energy bills, including the Warm Home Discount. The system would be replaced with a more efficient and cheaper Scottish levy scheme aimed at helping vulnerable and fuel poor households. This change, she said, will cut 5% off Scottish energy bills.
Drop in subsidies by 2016
Industry analysts interviewed by BBC News, explained that at present English consumers subsidise Scottish renewable energy schemes. The reason for this is simple: there is a greater demand for energy in England and Wales than in Scotland, which means more energy bills are issued in the former. As a result, the majority of subsidies are covered by customers living in England and Wales.
According to the same sources, it is expected that the current level of subsidies would continue until 2016, should Scotland become independent. At that point, energy costs for people in England and Wales would be expected to drop.