The major energy provider SSE has made a significant intervention into the debate on Scottish independence by warning that the ongoing uncertainty over Scotland’s future “represents increased risk”.
SSE said it had no position on the independence issue, and that its existing planned investments would not be affected, but that new investments would have to price in the risk of regulatory and policy changes resulting from Scotland ceasing to be part of the United Kingdom.
“All investments have to be adequately remunerated and additional uncertainty about key issues such as regulation and legislation makes decision-making in long-term business more difficult,” the company said in a statement.
“The additional risk of regulatory and legislative change does not mean that SSE will not invest in projects in Scotland while its future is being determined,” the statement added. “It does mean, however, that the additional uncertainty represents increased risk, of which SSE will have no alternative but to take account in making final investment decisions on those projects while that additional uncertainty remains.”
SSE’s position will be seen as supporting the position outlined in a controversial investors’ note by the financial analysts Citigroup. The report, released in November, warned that an independent Scotland would not be able to sustain the generous subsidies for renewable energy projects that are in large part funded by UK consumers through increased energy bills.
The report, which concluded that “utilities and other investors should exercise extreme caution in committing further capital to Scotland,” was strongly rejected by the Scottish Government.
In its response, the SNP administration welcomed SSE’s position, saying that an independent Scotland would seek to maintain a unified UK energy market. “We agree with SSE that post-independence we should maintain a single Great Britain energy market, within an increasingly unified single EU market – that has been the policy position of the Scottish Government for some time,” said Energy Minister Fergus Ewing.
“The Irish experience is that a single market across borders can work extremely well, and in fact the market across Great Britain can become better suited to Scottish circumstances with a stronger voice for Scotland in the regulatory arrangements.”
But SSE’s warning has been seized upon by unionist parties, which have argued that the ongoing uncertainty over Scotland’s constitutional future is damaging investor confidence.
“This is yet another example of the uncertainty caused by the referendum and yet further proof that it needs to be held as soon as possible,” said Ruth Davidson, leader of the Scottish Conservatives. “Our businesses need clarity about their future, yet the SNP are refusing to provide this by dragging the process out until 2014.”
Johann Lamont, Scottish Labour Leader, said: “This significant intervention demonstrates the growing uncertainty the delay over the referendum is creating.
“If this is to be a genuine consultation, the Scottish Government must listen to the views of important businesses like Scottish and Southern and bring certainty to Scotland’s future.
