A RESEARCH analyst for one of the world’s biggest financial institutions who warned about the dangers of investing in renewable-energy projects in Scotland is expected to explain his concerns to MSPs tomorrow.
Peter Atherton, of Citigroup, is giving evidence to Holyrood’s economy, energy and trade committee, and is likely to be asked why he called the SNP’s two flagship policies into question by telling investors to exercise “extreme caution” because of the nation’s uncertain constitutional future.
An investors’ report published last month said the debate over Scottish independence was likely to deter investment in renewable energy, which the SNP hopes will generate 100% of the nation’s electricity within nine years.
Mr Atherton said £46billion of infrastructure was needed to generate 26 gigawatts of power from windfarms, wave and tidal schemes.
The London-based expert said it was “questionable” if an independent Scotland could afford to pay an annual subsidy of £4billion to deliver that amount of power.
Mr Atherton’s analysis was dismissed by the Scottish Government but he has now updated the report.
He rejected a claim by First Minister Alex Salmond that the lights would go out in England if the country did not buy renewables from Scotland as “highly unlikely”.
Mr Atherton said three commitments were needed from the UK Government to fully address the risk.
All assets built before any independence referendum must be underwritten by all UK consumers, new assets built post-independence would still receive the UK subsidy and ministers in London must agree not to change legislation or policies that would have an impact on renewable-energy projects in Scotland.
Mr Atherton said: “We would expect the UK Government to grandfather pre-referendum assets but not those developed after Scotland has chosen to leave the UK.
“Until legally binding commitments on the future of the subsidy regime for renewables in Scotland are available, investors should remain cautious about buying shares in the companies exposed.”
Committee convener Murdo Fraser said the updated report “utterly discredits” the politically motivated SNP attacks on Citigroup.
“I look forward to hearing Peter Atherton set out why the SNP have not got a leg to stand on when it comes to the financial consequences of independence,” he added.
A Scottish Government spokesman said: “”Citigroup’s first report was strongly criticised by industry experts – including the leading city investment analysts Altium Securities.
“Since that report was published EDP Renewables and Sea Energy have announced plans for Europe’s largest offshore windfarm in the Moray Firth.”
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