Expert Commission Established on Energy Regulation in Independent Scotland

Energy Minister Fergus Ewing yesterday announced the establishment of an Expert Commission on Energy Regulation in an independent Scotland.

The Commission will be chaired by Robert Armour OBE, an energy lawyer working in the power sector in Scotland for the last 30 years, and will include a broad membership from across the public and private sector, including Simon Bucknall, former of Director of Regulation at Scottish Power; Tom Delay, Chief Executive of the Carbon Trust; Audrey Gallacher, Director of Energy at Consumer Focus; Dr Robert Gross of Imperial College London; Gordon MacDougall from Renewable Energy Systems; Dr Fiona Riddoch, Managing Director of Cogen Europe; John Scott, former Director of Engineering at National Grid and former Technical Director at Ofgem; David Sigsworth, Chairman of SEPA and Chair of the Scottish Fuel Poverty Forum; and Graeme Sweeney, Special Adviser on CO2 to Royal Dutch Shell.

The Commission will produce a full report by the end of this year and will provide interim findings to inform the Scottish Government’s White Paper on independence in Autumn 2013.

Central to the Scottish Government’s proposals for the energy sector post-independence is the continuation of a GB-wide market for electricity and gas, a position already announced publicly by Ministers, where Scotland has control over a broader range of regulatory, fiscal and legislative levers. An independent Scottish Government would also seek a new strategic partnership on energy with the rest of the UK, providing a framework for cooperation.

The work of the Expert Commission will build on the proposals for regulation set out in the Scottish Government’s document ‘Economic and Competition Regulation in an Independent Scotland’ published in February 2013. It will consider a number of issues, including:

• The role of a Scottish Regulator
• The role of market mechanisms in ensuring an independent Scotland can participate efficiently in an integrated GB-market
• How a new strategic energy partnership with the UK will operate
• Options for an optimal policy and regulatory environment to support renewables, innovation and the supply chain
• Options for the enhancing the promotion of fairer energy prices to address fuel poverty and improve energy efficiency

The announcement comes just over a week after Ofgem published new estimates showing that the GB capacity margin – the gap between available capacity and peak demand – could fall to as low as 2% in the years ahead, highlighting the continuing importance of Scottish generation to the GB electricity market.

Announcing the Expert Commission, Mr Ewing said:

“I am delighted that Robert Armour and the other members have agreed to participate in this expert commission to look at the very important matter of effective stewardship in the field of electricity and gas and the options that an independent Scotland should consider to ensure the best model for operation. Their breadth of experience and knowledge will be invaluable to the commission’s work.

“Scotland’s contribution to the UK’s energy requirements is already considerable. And as we have witnessed by the figures released by Ofgem last week which show that projections for spare capacity in the GB system are now more critical than ever, Scotland’s energy will be even more important in the future.

“Our position of a continued GB-wide market is therefore based on sound reasoning and is a model that will be in all parties’ interests. It is important that we are in possession of all available detail, including independent advice, as the constitutional debate develops and the work of this commission will be a welcome contribution to that process. I look forward to its report.”

Robert Armour, Chair of the Expert Commission, said:

“Ofgem’s recent report on the challenges that face the power sector only serve to remind us how important it is to create the right regulatory framework and commercial environment. Investment in low carbon generation and a modern grid, delivering meaningful advances in energy efficiency and tackling the growing problem of fuel poverty all depend on a clear, coherent and consistent policy environment.

“The Energy Expert Commission will draw on the extensive expertise of its diverse membership and the lessons from models in other jurisdictions in giving independent and considered views on what will deliver most for Scotland in the coming decades.

“The Commission welcomes evidence and submissions from parties interested in delivering the best outcomes for Scotland’s energy future.” 

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Press release, July 8, 2013; Image: Scottish Government