- Two main policies — the SNP has two flagship policies; first to hold a referendum on Scotland seceding from the UK; and second for Scotland to aggressively develop
renewable energy to drive an industrial renaissance and deliver 130,000 jobs.
- Policy 1 - Referendum — the Scottish Government plans to hold a referendum in
2013 or 2014. If a yes vote is the outcome then this would mandate the Scottish Government to negotiate terms for Scotland to secede from the UK. Secession could
take place as early as 2016/17, although the timetable is naturally unclear given the lack of precedents.
- Policy 2 - Renewable energy — the Scottish Government is targeting a massive increase in renewable power generation from the current 10TWh to around 50TWh by
2020. To achieve this, generation capacity in Scotland needs to double from 13GW to
circa 26GW with the increase being achieved through building on-shore and off-shore
wind. This would cost approx. £46bn.
- Conclusion - in our view utilities and other investors should exercise extreme caution in committing further capital to Scotland. This particularly applies to SSE and ScottishPower (Iberdrola) who may already be over exposed to these risks.