Published on Sunday 6 November 2011 18:23
The Scottish Government has seized on a report which supports its renewable energy policies, following claims they may be over-ambitious and pose a risk to investors.
The SNP administration highlighted the findings by international investment bank Altium Securities.
Analysts at the bank dismissed a warning issued by financial services company Citigroup that a "precautionary approach" should be taken by investors because of uncertainty over Scotland's constitutional future.
That warning was followed last week by a report by the Institution of Mechanical Engineers which criticised the Government plan to meet 100% of electricity demand from green sources by 2020, saying such a move "may increase fuel poverty and turn Scotland from a net exporter to a net importer of energy".
Altium Securities' report states: "We do not share recent competitor analysis that utilities developing renewable energy assets are exposed to stranded asset risk from an independent Scotland."
The bank says Scotland has the potential to be the lowest cost generator of wind energy in Europe due its "unique wind characteristics".
The report adds: "England has a low wind speed regime combined with high urban density and as such the cost of meeting UK Government emission reduction target would be more expensive without Scottish based renewables. We therefore view Scottish independence an irrelevant factor in meeting UK wide reduction commitments as the lowest cost supplier will always be sought first."
Energy Minister Fergus Ewing welcomed the Altium report, adding: "This report makes it clear that investment will continue whatever Scotland's constitutional status, including under independence - that is the view in the international markets, and a common view among those who actually buy the energy."
A Scotland Office spokesman said: "The renewables issue is just another aspect of the uncertainty being caused by the Scottish Government. Organisations are bound to speculate as long as questions remain unanswered and their independence proposals are not defined.
"Instead of simply shrugging and saying so what, it would be far more responsible to address the issues behind a major global bank warning investors off Scotland. The people of Scotland need answers and so do the markets - the Scottish Government needs to start providing them."
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