International finance firm joins growing backlash against Citigroup renewables report

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By G.A.Ponsonby

The backlash against a report urging firms not to invest in Scotland’s renewables industry increased today as yet another influential body poured scorn on the report’s conclusions.

Altium Securities has become the latest organisation to dismiss claims made by Citigroup’s London based analyst Peter Atherton, after he claimed that an independent Scotland would be unable to sustain its renewable industry.

Mr Atherton claimed that England would refuse to purchase an independent Scotland’s renewable generated electricity and that this would result in Scots having to pay an annual subsidy of £4 billion to the generating firms.

However a report published by the international investment firm Altium Securities, rubbished the research behind Mr Atherton’s claims.  The organisation, which has offices in eight different countries and experience in business deals worth billions, says that Scotland is the best placed nation in Europe to capitalise on the green-energy revolution.

The new report also backs Scottish government assertions that England will need Scottish renewable energy in order to meet its climate change obligations.

The report’s author, David Cunningham, savaged Citigroup claims that an independence referendum meant that investors risked being ‘stranded’ should they invest in the Scottish green-energy sector.

Speaking in the Sunday Herald Mr Cunningham said: “The energy market is resolutely agnostic towards politics.  Companies may take notice if they are operating in a country where there’s a volatile situation, but otherwise it’s immaterial if a country like Scotland is independent of the rest of the UK.”

The report also concluded that Scotland’s natural resources offer the opportunity for the country to provide the lowest cost wind energy in Europe.

The new report was welcomed by the Scottish government’s Energy Minister Fergus Ewing who insisted that the whole of the UK would need electricity generated by Scottish renewables if the lights were to stay on, regardless of whether Scotland was independent or not.

Mr Ewing said: “The report demolishes nonsensical claims made recently.  The fact is there will be a continuing need for Scottish renewable electricity to be exported to help keep the lights on in the UK.

“International corporations and domestic firms are investing for the future in Scotland’s world leading renewables industry.  For as long as the wind blows and the tides turn, that investment will continue.”

The Citigroup report has been seized on by Unionist politicians in Scotland.  Labour’s Iain Gray claimed that it was evidence that the SNP is damaging the Scottish economy.

Mr Gray was joined by Tory PM David Cameron who claimed that Scotland’s green-energy potential could only be realised within the Union.  Mr Cameron also said that it would be ‘dangerous’ for firms to invest in Scotland’s renewables sector whilst the independence referendum was looming.

On the Politics show today the Lib Dem Scottish Secretary Michael Moore claimed that the Citigroup report was evidence that the independence referendum was causing uncertainty within the business community over the question of renewables.

However these claims were undermined by figures and statements that indicate a surging confidence in Scotland’s renewable potential from investors.

Last week Roy McGregor – whose firm Global Energy is bringing 2000 jobs to Easter Ross through the company’s purchase of the Nigg fabrication plant – said:

“Investment is happening in full knowledge of the Scottish Government’s planned referendum – and renewables are being deployed in part thanks to the First Minister, who has demonstrated the vision and ambition that investors want to see.”

Mr McGregor’s statement followed figures released by green-energy firm Scottish Renewables who said that £750 million had already been invested in the sector which had the potential to generate £46 billion for the Scottish economy.

A survey by the Sunday Herald revealed that few firms believe that the referendum will damage the renewable industry.

Barclays Corporate Scotland: Jan Love, director of project finance:
“Clearly in any sector there will be external factors which impact on performance and with renewables there continues to be fluidity with the regulatory regime, skills requirements and infrastructure demands.  However, it is a key growth industry for Scotland which is expanding rapidly and offers a wealth of opportunities both to developers and investors.”

ScottishPower:
“Scotland has some of the best renewable resources in Europe and we continue to have ambitious plans for the UK and Scotland.  ScottishPower expects to invest £3bn in the UK during the period 2010 to 2012 – with 70% in Scotland, primarily in transmission networks and renewable energy projects”.

Last year the Offshore Valuation Group concluded that renewable from the North Sea alone would generate the same level of revenue as oil and gas and could power the whole of the UK by 2050.  The Scottish government believe that by 2020 there will be 40,000 people employed in Scottish renewables and that it will generate £30 billion worth of investment.

 

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