Electricity market reforms

Electricity market reforms

Changes to the electricity market must secure Scotland's low carbon future, First Minister Alex Salmond has said.

The FM warned that the UK Government's Electricity Market Reform proposals published today could jeopardise Scotland's ability to fulfil its full green energy potential and risk investment in green energy.

He has today written an open letter to energy companies and industry representatives, business organisations and unions who have an interest in electricity regulatory change with the Scottish Government's initial views and seeking their views on the proposals.

Mr Salmond said:

"This set of reforms must put in place long term mechanisms to fully exploit our renewables potential, support jobs and create a balanced, low carbon energy mix in Scotland. With the highest renewables targets and the best energy potential in the UK, we need a framework that fully delivers all that Scotland can offer. That means better regulation and an end to the current inbuilt discrimination against Scotland in transmission charging.

"The proposed changes have implications for our powers to support renewables, provide financial support for carbon capture and storage (CCS) and control emissions. We have used the levers available to us to create a strong and innovative framework with the best levels of support in the UK for wind, wave and tidal energy development.

"Against that successful track record, change could unnecessarily risk investor confidence and could have significant ramifications for our energy industry. Scotland's powers to target support to our unique Scottish opportunities has been key and must be maintained or enhanced.

"The UK Government's complete u-turn in its proposals to subsidise the bottomless pit that is new nuclear power is deeply unwelcome.

"Not only are we still paying billions to decommission power stations switched off years ago, we could now face upfront costs to build new stations. Our clear position against new nuclear power is supported by Parliament and by the people and we will resist in the strongest possible terms any change that would see subsidies for new nuclear power in England and Wales at the expense of renewable and CCS electricity generation in Scotland.

"We are at a crossroads. There are questions over how these new reforms could work, their effect on Scotland and on existing and future investment plans. But we will work with UK Government to ensure Scottish Ministers' powers are respected and be fully involved in agreeing and delivering any new mechanisms - recognising the major contribution that we already make to UK and EU renewable energy targets. That is the bottom line."

The Scottish Government will work closely with key interests and the UK Government as the reform process progresses.