4 days ago
Open letter to First Minister on the future for our energy needs
The UK is running away from the hard choices on energy. Its dismissal of ideas like zonal pricing – currently the only scheme yet presented that would allow the UK to maximise renewable energy generation, minimise infrastructure costs like pylons and to reduce fuel poverty while giving communities more incentive to take control of their own local energy generation – has been rightly criticised by you last week in a statement where you called out the UK for not doing enough on energy policy.
It was concerning to note, though, that your critique wasn't backed up by much on what you want the UK to actually do instead. Even as you complained about the UK 'ruling out all options to bring down energy bills' by abandoning zonal pricing, I'm not clear if you support it or would bring it in if you had the power to do so.
We all know that Scotland's devolved powers in energy are limited and that, right now, you couldn't do something like this, but also missing from your critique was what you plan to do with the powers you do have.
Scotland's own devolved energy strategy has been woefully lacking in recent years – from the sell-off of ScotWind at bargain basement prices, through dropping climate targets that were designed to push action ever forwards, to flogging off (sorry, 'encouraging foreign direct investment in') every piece of our renewable energy sector to multinational companies and foreign public energy companies to ensure that everyone in the world can profit from Scotland's energy except us.
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We can take another path, though. Scotland must ensure that we own our own renewable energy future and the way to do that is by bringing it into public ownership. Here are several ways that you could do it.
1) A National Energy Company
This is what most of us think of when we think about 'Scottish public energy', and it's the model that the Welsh Government adopted under the name Ynni Cymru. This is a single national company, owned by the Scottish Government or by Scottish ministers (similar to Scottish Water), that would own, generate and sell energy to consumers.
There is a snag to this plan in that the Scotland Act currently prohibits the Scottish Government from 'owning, generating, transmitting or storing' electricity, so if we want the National Energy Company to be based around supplying electricity, then the first thing that the Scottish Government could be doing is mounting a pressure campaign to amend the Act – it puts Scotland in the ridiculous position that it's legal for the Welsh Government to own a wind turbine in Scotland but not the Scottish Government.
Until that campaign is successful, there is something you can do.
The Act quite specifically bans your Government from owning electricity generators. It does not ban other forms of energy. A National Heat Company based around deploying district heat networks could supply all but the most remote of Scottish households.
While this would be a large infrastructure project, it wouldn't be larger than the one required to build the electricity pylons we need if we're going to electrify heat instead and the pipes would have the advantage of being underground and out of sight while ultimately providing heat to homes in a cheap, more efficient and ultimately more future-proof way that the current setup of asking people to buy heat pumps and just hoping that the grid can cope with the demand.
2) Local Electricity Companies
So, First Minister, let's say that you're not a fan of campaigning for the devolution of more powers and really want Scotland to be generating electricity. You can't create a National Electricity Company but you can encourage local authorities to set up their own Local Electricity Company.
Conceivably, the 32 councils could even jointly own one National Electricity Company – the Scotland Act merely bans the Scottish Government from owning the company.
In many ways, this would be an even better idea than the Scottish Government doing it. Government borrowing powers are far too limited and you'd need to campaign for more borrowing powers to get the scale of action required to build the infrastructure we need – but councils have a trick up their sleeves.
They are allowed to borrow basically as much money as they like so long as the investment the borrowing allows brings in enough of a return to pay back the loan. This is very likely how Shetland Council will finance its plan to connect the islands via tunnels – the construction would be paid for via tolls on traffic.
Energy, as we know, is very profitable indeed so there should be absolutely no issue with councils being able to pay back their loans and then to use the revenue from their energy generation to subsidise local households against fuel poverty and to support public services.
If we want to go even more local than this, then councils and perhaps the Scottish National Investment Bank could support communities to own their own energy.
We've seen multiple times that community ownership generates many times as much local wealth building – as well as skills and jobs - than the current model of private ownership plus paltry 'community benefit funds'.
3) A National Mutual Energy Company
This is another national-scale energy company that the Scottish Government could launch but in this case wouldn't own or control. Instead, the 'National Mutual' would be owned by the people of Scotland.
In this model, every adult resident of Scotland would be issued one share in the company. They wouldn't be able to sell it and they'd have to surrender it if they ever stop living in Scotland, but other than this, it would be much like owning a share in companies like Co-op.
The company would be run as any other commercial company and would be beholden not to the Government but to its shareholders – us. We'd jointly decide future energy strategy and even potentially have a say in how much of the company's operating surpluses are invested in future developments or distributed to shareholders (again, us) as a dividend.
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This model would be particularly suited to very large energy developments that cut across local authority or even national borders or to help develop offshore assets. Imagine ScotWind had been owned by the people of Scotland, instead of being flogged off to multinational companies in an auction that had a maximum bidding price attached.
Conclusion
First Minister, I applaud you for keeping up some sense of pressure on the UK Government on energy.
As we make the necessary transitions required of us under our obligations to end the climate emergency, this is one of the sectors of Scotland that will change the most. It's vital that we get this transition right, or not only will Scotland see yet another generation of energy potential squandered in the same way that the coal and oil eras were, we'll see Scottish households bear the weight of others profiting from that transition while we still experience crushing levels of poverty and economic vulnerability.
The UK Government may be ruling out all of their options on energy but that doesn't mean that you need to do the same. We don't need to wait until independence – as vital as it is – or to wait until Westminster gets its act together – which may or may not happen. We – you – have options too. It's time to take them.
Yours, expectantly …
