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Energy - Taking forward our National Conversation

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Foreword by the Cabinet Secretary for Finance & Sustainable Growth

For many years, Scotland has been an energy rich country. The development of the North Sea industry into a significant world leading industry has allowed the development of Scottish based skills, technology and companies which have made a significant contribution to our economy.

We are now seeing the growth of another energy sector through the advancement of our vast renewable resources. Our potential to utilise these natural resources is considerable. We are an energy-rich country with the resources, skills, technology and ambition to be a world leader in sustainable energy. Looking ahead, Scotland is well placed to provide the low carbon electricity which will increasingly be required in order to meet future targets and commitments

There are a number of aspects of energy policy which are currently devolved. These include planning, promotion of renewable energy, energy efficiency and emergency planning. Despite restrictions on the ability of Scotland to operate at the European level, Scotland is taking a significant lead on a number of issues including Carbon Capture and Storage ( CCS) and the development of a North Sea Grid. And we can point to real and substantial progress in a number of other areas in recent years, such as improved services for advice in energy efficiency.

Although we have some powers, there are a number of areas such as energy market regulation and pricing and the development and production of North Sea oil and gas, which are formally reserved to the UK government. In our view this places a number of barriers in the development of the Scottish energy sector, and Scottish interests are often not best represented. For example, Scottish-based electricity generators pay a much higher transmission charge than those in the south of England, and the schemes run by energy suppliers to promote energy efficiency are designed for English not Scottish conditions

This paper sets out how gaining greater constitutional powers would allow us to make decisions which are more appropriate for Scotland's interests. It highlights a number of areas where, given the opportunity, we could bring about significant change and ensure that energy is a real economic opportunity for Scotland. This includes a greater voice at the EU table; the ability to develop a North Sea tax and regulatory framework to reflect the challenges experienced by operators in developing new fields while ensuring that extraction levels are maximised and investing a share of oil and gas monies into an oil fund, an approach adopted by many other countries, which would see the benefits of oil and gas taxation turning into a long-term source of wealth.

This paper considers what the Scottish energy market could look like with increased Scottish responsibility under the possibilities of either devolution max, where Scotland stays within the United Kingdom with increasing rights and responsibilities falling to the Scottish Parliament and Scottish Government, and also under full independence. This Government believes that independence, with full responsibility for all international representation, is the best option to enable Scotland and the Scottish people to fulfil their potential.

We invite views on the information contained in this paper and look forward to a continued debate as part of the ongoing National Conversation.

John Swinney MSP
Cabinet Secretary for Finance and Sustainable Growth