Scotland: a green, unpleasant land? While the SNP remain

0 Comments | Sunday Herald, The, Sep 14, 2008 | by Steven Vass, Deputy Business Editor

ENTERPRISE minister Jim Mather put his head into the lion's mouth last week when he stood up in front of the Scottish Council for Development and Industry's (SCDI) conference on energy to reiterate the government's antinuclear position. Business leaders have been increasingly disparaging about the SNP's unwillingness to sanction any new nuclear power stations in Scotland, but Mather had no words of conciliation.

"[The government's policy] has no place for nuclear power, " he said. "I recognise that many people in this room will disagree with that statement.

But we are clear in our view that realising our huge resources in renewables along with supporting research into clean fossil-fuel technology to provide baseload is the way ahead."

While this might burnish the government's green credentials, it is arguably damaging its standing with the business community more than any other policy.

It has also handed Labour a useful stick with which to beat their Scottish rivals.

Prime minister Gordon Brown used that stick to attack the policy at the CBI Scotland dinner in Glasgow the week before.

As David Watt, director Scotland of the Institute of Directors (IoD), says: "It's damaging the government's credibility with business. They won't produce facts and figures to back up what they believe."

The row turns on whether Scotland should replace two nuclear stations, Hunterston B in North Ayrshire and Torness in East Lothian, which are due to close in 2016 and 2023 respectively.

The party might have reached the point where first minister Alex Salmond feels able to praise Margaret Thatcher publicly, but when it comes to nuclear they are still chained to the railings with CND.

Salmond has a vision of Scotland as the "Saudi Arabia of renewable energy", thanks to its strong wind and energy-rich tides. Scotland already exports about 20per cent of its electricity and the SNP expect it will become all the more attractive as England and other European countries struggle to meet their renewables targets.

Scotland is in line to meet its target of 50per cent of electricity from renewables by 2020 - nearly 20per cent higher than the English target - so the SNP believe it will not be necessary to replace the nuclear stations, even though they currently provide more than a quarter of our power.

The government can count on support from some business quarters, such as Martin Stepek, former head of the eponymous electrical goods chain, now chief executive of the Family Business Association. He says: "I question whether nuclear has ever been profitable, given its government support, and it has links with weaponry and possibly terrorist attacks. Environmentally, it's god-awful. Its toxic storage will last for generations and I see it as a last resort.

Renewables appear to have huge potential earning capacity for Scotland."

But such arguments are exceptional.

British Energy (BE) has commissioned a study by consultant AEA Energy, due out later this month, whose starting premise is that all of Scotland's five existing power stations (Hunterston B, Torness, Cockenzie, Peterhead and Longannet) will be switched off between now and 2025, in line with previous estimates.

The 9GW of renewable capacity it forecasts will be online by then (compared to 3GW now) will be enough to satisfy peak demand and export the excess, but BE argues there will be many days when the generators would perform too poorly even to meet demand. This is because almost 6GW would be from onshore and offshore wind turbines, which depend on wind to turn their sails and are therefore unpredictable, or intermittent in industry jargon.

Simon Baker, BE's manager of strategy and business development, who commissioned the study, says BE estimates there would only be enough to export 23per cent of the time, even if you assume a slight fall in electricity demand between now and 2025. In other words, Scotland would almost become a net importer of electricity, which would be a drag on the trade deficit of an independent Scotland. Worse, there would be a shortfall of around 4GW on the least windy peak-demand days, which is 2GW more than it will be technically possible to import from England, and it could be even more if innovations such as electric cars put pressure on demand.

Throw in the prospect of the Russians turning off the gas taps, as they have occasionally done to the Ukraine and others, and the outlook is a future of blackouts and general misery.

"We will rely on imports from down south and we will take our chances, " says Baker. "Is that a healthy option when you consider security of supply and the affordability agenda?"

But BE's apocalyptic vision turns out to be somewhat misleading. For one thing, it is far from clear that all the power stations will close between now and 2025. Cockenzie certainly will close, but owner Scottish Power is likely to apply to build a replacement as long as it believes there to be a market. The Sunday Herald also understands that Longannet and Peterhead will probably not close within that time span.