lets see how the scenario plays out,
1) Elections are boycotted .
BJP exactly wants this scenario, it help them to win seats in valley & other places where there will be no turnout. It would be a nightmare for the separatists or even for abdullahs/muftis to have BJP running the show. They will simply get marginalized if they are out of picture and might even fade into political oblivion.
2) Separatists participate in elections.
Separatists will put up proxy candidates in elections. Why would they? simply bcos they dont want BJP anywhere in the valley. If they win they will create bedlam in the assembly if they lose they will create disruption on the street. Given that police now comes under governor, they would better be on the right side of the law and there is no better protection than being an elected politician.
Just write off the valley for the next 2-3 years, focus of development will only be on jammu & ladakh. I dont think any one in the govt has any grand illusions that it will be milk & honey all the way in the valley.