Scotland is an energy-rich nation – the total amount of electricity exported from Scotland in 2022 was worth £4 bn. This was enough to power all Scottish households for more than two years. Yet more than 980,000 Scottish households (39%) are currently in fuel poverty. This is because one in five Scottish dwellings were built pre-1919 and more than 50% of rural homes are off the gas grid and forced to use more expensive heating fuels, such as oil or Liquified Petroleum Gas (LPG).
Scottish households also pay some of the highest electricity standing charges in the whole of the UK. The standing charges in northern and southern Scotland are 59.38p and 62.08p per day, respectively, compared with a standing charge of just 38.5p per day, in London. This means that Scottish consumers must pay up to £86 per year more than their London counterparts, even if they use little or no electricity at all. These charges will increase in April. They are set by Ofgem, which claims to “protect energy consumers, especially vulnerable people, by ensuring they are treated fairly”.
Generation and supply of energy are reserved
Many people ask why the Scottish government can’t do more to reduce energy bills. The answer is that the most important aspects of energy policy – the generation and supply of electricity, oil and gas, remain reserved to the Westminster Government. Only the promotion of renewable energy and energy efficiency in the housing sector is devolved to the Scottish government. This has allowed Scotland to forge ahead of England in legislating for all domestic private rented properties to have an energy rating of at least D, rising to C next year. However, Scottish politicians’ hands are tied when it comes to reducing energy costs through public ownership of utility companies or by a re-configuration of the electricity grid, for example.
Furthermore, both onshore electricity transmission and distribution operators in Scotland have already been privatised; Scottish and Southern Electricity (SSE) transmits and distributes electricity in the north of Scotland, while SP Energy conducts the same operation in the south. They transmit electricity that is generated by Scottish offshore wind turbines, directly to the National Grid plc, from where it is distributed, mainly to London and the most industrialised parts of England and Wales.
One-way power supply to England
Two new undersea electricity ‘superhighways’ are being built by the National Grid to extract 4GW high voltage direct current (HVDC) electricity from offshore wind farms in the east of Scotland: East Lothian to Durham and Peterhead to Drax in North Yorkshire. This electricity will be supplied to four million homes in England.
Some of Scotland’s surplus electricity is being exported to France, Belgium, the Netherlands and Denmark, via undersea cables or interconnectors. There are currently eight under-sea interconnectors linking England with neighbouring EU countries, including the latest Viking Link, which stretches 764 km from Lincolnshire to Southern Jutland in Denmark and took five years to construct. An interconnector links Western Scotland with Northern Ireland. Construction of Scotland’s first undersea, 2-way interconnector (NorthConnect) which would have stretched 665 km to mainland Europe, linking Peterhead with Simadalen in Norway, was approved by Ofgem in 2016. The EU had promised €10 mn towards the project, however it was ultimately rejected by the Norwegian Government in 2023. This is said to have been contrary to the EU’s Green Deal plans for a transcontinental ‘Supergrid’ but may have been influenced by Brexit.
SSE has recently announced that it is spending £1.5 bn on building a massive ‘water battery’ in the Highlands to store surplus energy from electricity that has been produced by Scottish wind turbines. At the flick of a switch, Coire Glas would begin generating enough renewable energy to power three million UK homes in just under five minutes. This is unlikely to lead to lower prices, however, as the UK Government has promised to operate a ‘cap and floor’ scheme that will guarantee SSE and other private investors a continual profit.
Will profits from renewable energy benefit Scotland?
Many Scots are calling for independence so that financial and other benefits being gained from our surplus renewable energy are not squandered by the UK government, in the same way that Margaret Thatcher blew the windfall profits from North Sea oil. With independence and EU membership, Scotland could obtain Green Deal investments to set up a public energy company, adapt the electricity grid so that it serves local domestic and industrial needs and help construct interconnectors to link with the EU’s North Sea offshore grid. According to the Scottish Government’s paper: ‘An independent Scotland in the EU’, “We have a potential pipeline of over 40 GW of offshore wind generation projects. At the same time as enabling Scotland to meet its ambitious renewable energy targets, that potential could help the EU deliver its sustainable green growth strategy.”
In June 2023, Sir Keir Starmer pledged to create Great British Energy (GBE), a publicly-owned, clean energy generation company, based in Scotland, to reduce energy costs, if it wins power at the next general election. But we may be disappointed because since then, Labour has slashed its £28 bn green investment pledge.
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