Independent Scotland May Face Higher Energy Bills: Davey

Citizens of an independent Scotland face higher power bills to pay renewables subsidies to local generators, according to U.K. Energy Secretary Ed Davey.

Scotland has less than a 10th of U.K. households and gets a quarter of its renewable power subsidies, Davey said in a copy of a speech he will give later today.

“The size of the U.K. protects Scottish consumers from the full costs of Scottish power generation,” the minister said in the speech. “Maintaining this level of support would take up a greater proportion of national finances, meaning either higher taxes, higher energy bills or cuts in other areas.”

Two of the U.K.’s so-called Big Six utilities are based in Scotland: SSE Plc in Perth and Iberdrola SA’s Scottish Power unit in Glasgow. The U.K. in December cut green levies paid for renewable generation to help pare increases in the cost of living by an annual average of 50 pounds ($83) per household. Scots will vote in a referendum on independence on Sept. 18.

The Scottish government blueprint for independence said in November it would protect energy consumers’ interests. Clean power generated in the nation, and the current system of shared support, would continue to represent the cheapest way for the rest of the U.K. to meet its emissions targets, it said.

“If Scotland were to choose to go it alone, maintaining this level of support would take up a greater proportion of national finances,” Davey will tell a conference of the Scottish Renewables industry group in Edinburgh.

Negative Effects

Davey, a Liberal Democrat, joins Conservative Party cabinet colleagues Chancellor of the Exchequer George Osborne, Home Secretary Theresa May and Defense Secretary Philip Hammond in portraying independence as having negative effects for voters. The three main U.K. political parties all oppose Scottish First Minister Alex Salmond’s campaign to end the 307-year-old union.

Osborne on Feb. 13 ruled out a currency union for Scotland. Hammond said on March 15 separatists were “deluded” if they thought Scotland would keep warship building in local shipyards, and May said passport checks may be needed to cross the border.

The cost of energy has become a political focal point in recent months after Ed Miliband, leader of the opposition Labour Party in the U.K., vowed to freeze energy prices if elected.

To contact the reporter on this story: Alex Morales in London at amorales2@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net Tony Barrett, Randall Hackley

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