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People across Scotland will today head to the polls to cast their vote in the much-anticipated independence referendum.
A separation of the union would have huge implication across the utilities sector, as well as for consumers.
Fergus Ewing, Scotland’s energy minister, told Utility Week independence would enable Scotland to “harness [its] full energy potential”, and to introduce a “permanent and ongoing cut of £70 a year” to energy bills by moving social levies into general taxation.
However, the UK energy secretary Ed Davey, stated Scottish consumers would lose out financially from a ‘Yes’ vote to the tune of £189 a year for Scottish households and by up to £608,000 for a medium sized business.
“It is only the broad shoulders of the UK that can support Scotland’s growing renewable energy sector,” he said.
The simplest regulatory path would be maintaining the single, GB-wide energy market, although the Scottish governemnt’s own Expert Commission admitted “it would be difficult to agree a common approach”.
The break up of the union, and possible break up of the single energy market, could result in the Scottish retail sector being dominated by a big two of SSE and Scottish Power, who maintain a 66 per cent and 46 per cent market share in their incumbent regions.
The biggest impact on the water sector would be the introduction of a single, pan-utility regulator.
Alan Sutherland, chief executive at the Water Industry Commission for Scotland (WICS) told Utility Week that “it would be wise to start afresh” rather than “rebranding” another regulator.
The break up of the union could result in the subsidies for the higher transmission and distribution costs in Scotland no longer being available, and consumer bills increasing by £38.
Investment in Scotland could remain on hiatus while the sector is gripped with further uncertainty as a Scottish market is established, with potential changes to the subsidy regime dissuading investors. In addition, an independent Scotland could saddle its consumers with higher payments to subsidise renewables, due to a smaller consumer base, while exporting at a lower price than they currently receive to major demand centres further south.
The results of the vote are expected to be announced by constituency through the early hours of Friday morning, before a final result on the future of Scotland is announced.
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