Possible referendum on Scotland’s future
Any referendum on Scotland’s future is a matter for the Scottish and UK parliaments and, ultimately, for voters. SSE will not take a view on whether there should be a referendum, when any referendum should take place or what the result of any referendum should be.
In itself, a referendum would present no immediate risk to how SSE serves its customers or to the investments that it continues to make in order to fulfil its core purpose. As its Annual Report 2016 made clear, SSE already recognises politics, regulation and compliance as one of its principal risks. An updated assessment of its principal risks and the issues relating to them will be set out in its Annual Report 2017, in light of developments. The level of risk relating to politics, regulation and compliance may increase if, following a referendum, there was a prolonged period of constitutional change resulting in uncertainty about the legislative, regulatory or compliance framework within which SSE operates. Nevertheless, SSE’s balanced business model is designed, amongst other things, to provide underlying resilience in the management of this and other risks.
As stated in its submission to the Scottish energy strategy in December 2016, SSE believes that managing the electricity and gas networks and operating the market on a GB-wide basis ensures that the affordability, reliability and sustainability of energy can be maximised by providing energy, and securing the required investment in it, over a much wider population base. This arrangement benefits all consumers in GB. The benefits from harmonised markets are demonstrated in Ireland, where wholesale electricity trading in Ireland and Northern Ireland has operated under a Single Electricity Market since 2007.
In summary, SSE already recognises political and regulatory change as one of its principal risks and prolonged uncertainty following any major constitutional change would add to that risk. At the same time, SSE will not take a view on whether there should be a referendum, when any referendum should take place or what the result of any referendum should be, believing it to be a matter for the Scottish and UK parliaments and, ultimately, for voters.