Energy is a big issue for many who will vote in the Scottish Parliament election this Thursday – even though Holyrood has no power over energy. Many will use this election to send a message to Westminster.
Scotland produces huge amounts of renewable energy – often more than we actually use. And yet, more than a third of households here are in energy poverty.
Energy poverty means having to spend more than ten per cent of your income to heat your home and cook your food. In Scotland, this affects 34% of households. In England, it is just 11%.
No EU country has a fuel poverty rate anything like Scotland’s – the average is 9%. In Sweden, it is 3%.
So what’s going on?
It starts with a decision made decades ago. In the 1980s and 90s, UK Conservative governments sold off the energy system – including Scotland’s electricity grid – to private companies.
Scotland didn’t elect these governments, but we’ve been living with the consequences of their choices ever since.
Today, nearly a quarter of every energy bill goes to profits. Not into lowering costs or improving the system, but out to shareholders – many of them overseas.
The promise of privatisation was more investment, but the multinational owners of the grid concentrated on extracting profits instead.
For many years, the strategic system operator for the whole UK belonged to the same multinational that owned the grid in England. The grid was configured around coal-fired power stations in the north of England and it stayed that way, even as they closed down.
Scotland’s grid was left particularly weak and unfit to support the transition to renewables.
Upgrade cost was piled onto electricity bills
When the UK government finally had to force a grid upgrade, instead of treating that like a national investment paid for out of taxation, or forcing the private companies to return some of their profits, the cost was loaded onto electricity bills.
That decision has pushed the price of electricity up and up.
It’s now around four times more expensive per unit than gas – not because it costs more to produce per se, but because of how the grid upgrade is being funded.
Many Scottish homes don’t have access to gas
Around one in five Scottish homes can’t connect to the gas network. They rely on electricity to heat their homes,
So when electricity is four times the price of gas, Scottish energy bills are much higher than the UK average. Families who live within sight of powerful energy turbines often can’t afford to turn on the heating.
Scottish homes excluded from the UK’s smart network contract
Rural homes in Scotland are also excluded from the smart meter network – so they can’t even take advantage of cheaper energy tariffs available to others in the UK. If you get an electric car in the rural Highlands, you can’t get the cheaper overnight tariff, for example.
The smart meter system relies on using a particular phone network. The way it was set up means it excludes 2% of the population of the UK – but a much larger percentage of the population of Scotland.
Scots are also charged more in standing charges – which are the highest in the UK except North Wales.
These costs all affect businesses like hotels and hairdressers as well as homes.
Energy Producers charged more to connect to the grid
Even though Scotland produces so much electricity, we don’t get it any cheaper. The tariff to buy is set across the whole of Great Britain. The UK government decided not to make renewable energy cheaper where it is created, in the way countries like Sweden have, in a system known as zonal pricing.
To put the tin lid on it, small energy producers in Scotland are charged TEN times as much to connect to the electricity grid as producers in England and sometimes thre is even greater diparity. Many Scottish producers are getting refused permission to connect to the grid at all.
Calum MacPherson, chief executive of the Inverness and Cromarty Firth Green Freeport, told the Press and Journal: “The current regime for developers in the south of England is absolutely fantasy. They are being paid to connect rather than charged to connect. For every month’s delay on projects in Scottish waters, it has serious implications in terms of investor confidence. Imagine this were reversed. Imagine there were a mechanism penalising projects in the south of England.”
Other countries have a postage-stamp-style system that means that producers pay the same for grid connection across the country to share the cost.
The UK government says it would not be fair for Scottish households to pay less to buy electricity – but it is fair for producers in Scotland to pay more to supply it. Hmm. Who exactly is that ‘fair’ for?
We don’t even own the grid we are forced to pay for in Scotland. Instead, shareholders brag that SSE’s Scottish grid subsidiary is now one of the fastest-growing in the world, with asset value increasing by 30 per cent a year.
The UK energy system is designed to extract profits from Scotland
It doesn’t have to be like this. In most countries, the grid is treated as national infrastructure. It is publicly owned. It is not a means of extracting value from citizens and businesses.
Read about the way independent countries do it here.
There isn’t anything inevitable about the current setup. With full control over its energy system, Scotland could choose a different path. The focus could be on producing affordable power, promoting the well-being of citizens, boosting local businesses and creating a strong export economy
Other countries have already shown what that can look like. The question is – when Scotland will have the power to do the same?
PS: Seafarers in peril
PS: The plight of seafarers in the Strait of Hormuz does not get enough attention. We all depend on these people, tens of thousands of whom are trapped in stranded vessels. This substack blog by Rose George features a powerful first-hand account from someone onboard a tanker, no pay wall.