Energy has always played a key role in the Scottish economy. In the 18th and 19th centuries it was coal; in the 1950s and 60s it was hydroelectricity and power from the glens; from the 1970s onwards North Sea oil has loomed large and made Aberdeen one of the world’s premier energy cities. Finally, in this century, Scotland has played a leading role in the low carbon revolution both in renewables and in carbon capture and storage.
With this rich heritage, it is no surprise that energy became one of the key discussion topics leading up to the September referendum. The energy issues raised have, however, not been really settled by the vote and this would have been the case regardless of the outcome.
There are two issues worthy of comment. Firstly, there is the debate over the level of recoverable reserves in the North Sea. I have seen figures ranging from 15bn barrels to 24bn. I suspect that even the bottom end will require really significant investment and technological advances but we have to get the regulatory and fiscal regimes right and stable to even get close to this range. There was momentum behind implementing the recommendations of the Wood Report earlier this year and I hope that momentum is regained now the big constitutional issue is behind us.
Secondly, the low carbon revolution I mentioned earlier is stuttering. There are many causes behind this but political uncertainty is certainly one of the biggest. The referendum created a large shadow over investment and innovation in the renewable industry in Scotland and I sincerely hope that good progress can be made before the UK general election creates its own shadow. We need to see projects, both large and smaller community-owned ones, reach financial close and we need to see the climate of innovation and entrepreneurship return to both the corporate and education sectors.
The Scottish referendum has opened the Pandora’s box that is the UK constitution and, as the debate about things like devo max and home rule continue, I am sure energy issues will emerge that have to be sorted. These need to be addressed quickly, clearly and rationally if we are to avoid further delay and disruption or, to use a good Scottish word, a guddle*, in the two halves of the energy industry that are so important to the Scottish economy.