Whitelee Windfarm

How to Nationalise Energy For Free

Craig Dalzell – 4th November 2021

Regular readers will know of my long-standing bugbear that Scotland has simultaneously some of the greatest potential for renewable energy assets in Europe but some of the least interest in actually owning and harnessing those assets. Almost every week, we see another story of a bright, young Scottish energy tech company being bought out by a multinational, or the Scottish Government auctioning off assets to whomever bids for them or, as is the case this week, a foreign state-owned company buying up Scottish renewables. Italian energy company Eni has just announced that it has bought £70 million worth of offshore wind from Perth-based company SSE. As the Italian state owns more than 30% of Eni, this means that a portion of your energy bills may now go towards funding Italian public services.

The Scottish National Party has been instructed by its members twice now to set up a Scottish National Energy Company but has repeatedly backed away from the idea. If we had one, it could conceivably have put in a bid for these privately owned assets to bring them into Scottish public ownership. Over the course of several such bids it could progressively build up its stock of Scottish public-owned energy and ensure that the returns on those investments are recycled into Scotland’s public services rather than shipped abroad.

This would, of course, be the expensive way to nationalise energy – something that Jeremy Corbyn found to his political cost when fumbling his way through a similar UK-wide idea a few years ago. What would you think if I told you there was a way to do it for free?

The Scottish Government recently announced a proposal to boost onshore wind in Scotland. We’ll have a more detailed analysis from an expert in the Scottish energy sector next week but the short version of this plan is that it recognises that many of the wind turbines built in Scotland in the late 90s and early 2000s are reaching the end of their lives. The need to replace them is an opportunity to exploit advances in technology since then, to “repower” the sites with larger and more efficient turbines. The aim, between this repowering strategy and the construction of new wind sites, is to double Scotland’s onshore wind capacity.

However, almost all of these wind turbine sites operate on a time-limited licence (usually 25 years) granted by their planning permission (something ultimately controlled by the Scottish Government). As these licences hit their end it would be perfectly possible for the Scottish Government to not simply renew the licence but to take it over and hand it to a community energy company or (especially in the case of the larger sites) to a National Energy Company. There is another trick here though – acknowledged implicitly in the re-powering proposal. The planning permissions for these sites were granted on the basis of the turbines having a certain maximum output. If the new repowered site exceeds that capacity (which in most cases it will) then new planning permission must be issued. This again creates a break-point in the licence during which the National Energy Company could take over the running of the site. For only the capital cost of building the new turbines (which we, as energy users, will be paying for through our energy bills regardless), Scotland could nationalise its entire onshore wind portfolio over the course of the next 20 years or so.

But should we be going so deeply into wind power? I’d argue that we shouldn’t. The limits of devolution mean that while Scotland has substantial indirect power over these assets it has much less control over the National Grid itself. Most of us will be aware of the lopsided pricing system that significantly limits the ability to connect renewables to the Grid in Scotland but fewer will be aware of the severe challenges facing the stability of the Grid as we move towards a decarbonised future. In short, Scotland currently produces nearly 100% of our electricity via renewables but this only makes up about 25% of our total energy budget. If we want to electrify all of our cars and home heating and don’t significantly reduce demand (e.g. we push for Net Zero instead of a Green New Deal) then we’ll need to quadruple our electricity generation. Frankly, the Grid can’t cope with that.

As Scotland has little to no control over the National Grid then – at least before we become independent – we have two choices. Either A) work within the constraints of the UK’s Net Zero plan and expand our renewables only as fast as they will let us or B) we work around them.

By far the largest challenge to a renewable future is the demand for heating. If we continue to push for the “Net Zero” future of electric heat pumps then we’ll be working to plan A. I’ve spoken before about district heat networks as a solution to heating from a resilience and an effectiveness point of view but they also have the advantage of fitting nicely into strategy B. Because heat networks transport heat directly to customers rather than transporting electricity to be turned into heat, and because the ability to construct these heat networks is firmly a devolved issue, we don’t need to wait for the UK Government and National Grid to catch up to or throttle our ambitions. The more effort we put into building these alternative networks, the faster we can decarbonise our energy demands.

We can also tie this strategy into the wind energy nationalisation plans I mentioned above. One of the ways that Scotland could charge its heat networks is via solar power. Solar thermal panels are more efficient than solar PV electricity generators (thermal panels capture more solar heat energy per square metre than a PV panel can capture and convert into electricity – never mind the losses involved when turning that electricity back into heat in your home) and are well suited to being placed in large arrays (you use so much more heat in your house than you do electricity that they are less effective as rooftop panels than PV is, though many places do use such systems too). Additionally solar “co-locates” well with wind as they can sit around the base of the wind turbines, take advantage of the clear space that many turbines require around them and work at their best during those still, sunny days where the wind isn’t blowing. A combined solar and wind and thermal storage site could be the ideal core for a heat network. The solar panels heat the system when it’s sunny, the wind turbines connect to industrial-scale heat pumps to provide heat when its windy and the thermal store allows heat from our long summer days to be used in the winter when we need it. Denmark is leading the way with this kind of forward planning. Why isn’t Scotland?

Scotland has a wealth of potential energy and potential benefit from the renewables revolution but so far we have not done well to capture it, retain it or to develop that potential as well as we could and should. If we continue with the current trends, then we’ll very likely become one of Europe’s premier renewable powerhouses but it’ll be countries like Italy and Norway who benefit from it rather than us here. Let’s not make the same mistakes we did with previous energy revolutions. With proper planning, strategy and sufficient political will, we could create a Green New Scotland that takes advantage of public and community ownership to recycle investment and build an energy sector fit for the 21st century. Or we can continue to sell off every last asset in Scotland and let folk in cold houses who are already in fuel poverty fund the Green New Deals of every other country we invite to “inwardly invest” here.

Craig Dalzell is Common Weal’s Head of Policy and Research

6 thoughts on “How to Nationalise Energy For Free”

  1. I despair at the lack of forward planning in this area.

    A question on the national energy company – am I correct in understanding is that it was to be a not-for-profit company to sell energy, but not generate it or maintain infrastructure? In which case it is not so much of a loss.

    1. Hi Craig

      You’re correct. The plan put forward by the Scottish Government in 2017 after we won the first vote for an NEC was indeed just an energy supplier and not the owner of assets that we called for (see: /policies/powering-our-ambitions/)

      It’s debatable whether such a limited ambition would have survived the current energy crisis that has knocked out so many small energy companies across the UK. Which is precisely why we called for it to be an asset owner as well as energy supplier.

  2. I’m puzzled by your plan to co-locate onshore wind farms and thermal solar farms. Surely, since the wind farms are out in the country and often far from where the energy demand is, that would mean transporting the heat output from the thermal solar units very long distances? Which would mean not only expensive pipelines but potential heat losses en route? Is there something I’m missing here?

  3. Hi Lyn

    There are a couple of aspects to your thinking here. The first is that some of the best places for district heating are what’s known as “compact rural” areas. i.e. a village or small town surrounded by a large amount of country. These areas can be quite close to the thermal sources and don’t need a lot of infrastructure to surround with a heat network.

    The second is that the technology to move heat long distances is pretty mature now. The longest district heating systems can involve main trunks that are 100km long (By that measure, heat could hypothetically be delivered to Glasgow by a thermal plant in Dumfries) though something between 40-80km seems to be a region where under current economic factors it is cheaper to move heat than it is to move electricity and then convert it to heat. See this paper for an academic study of those factors: https://www.sciencedirect.com/science/article/pii/S0306261918302058

    Even 40km still puts Glasgow within range of the large windfarms of Whitelee and Kype Muir that I had in mind when writing this (as I can see them from where I live).

    With heat networks at the upper end of this length range, you need pumping stations to keep the pressure up in the system but you can also recover the heat from the pump and inject that into the network. This heat recovery is itself very effective. I’ve seen examples where the working fluid exits the trunk at a higher temperature than it went in.

    Finally, these networks should, of course, be built according to local energy potential. Just because, say, Glasgow /could/ get heat from a wind/solar cogenerator in Dumfries doesn’t mean it might not be cheaper to supply Glasgow via water source heat pumps in the Clyde and thermal pumps extracting heat from flooded mines under the city (both are in the process of being investigated).

    We believe that one of the first things Scotland’s Green New Deal should involve is a whole country survey of energy demand and potential so that we can start planning where the best solutions are for a given area. This is something that we think that the Scottish Energy Development Agency should have as a core mission. (The concept of a SEDA is something the SNP and Greens both agreed to forming but have thus far not /quite/ committed to in practice – the Energy Agency currently being planned doesn’t seem to have this in its remit yet, though we’ll keep campaigning for it)

    I hope this helps.

  4. Jon Southerington.

    For those of us living in the Isles or northern mainland, it is especially galling that we pay the highest prices for electricity whilst surrounded by current renewable production plus the huge as yet untapped marine renewable potential. Our domestic electricity deal has just gone up by 50%, which is small beer compared to the increases that those on pre-payed meters are facing. This year the Westminster Scottish affairs committee took evidence from Orkney on the renewables sector and grid access. In short they didn’t need to bother as the evidence submitted was exactly what they got in 2017, basically that the BEIS department and OfGem are destroying our ability to produce energy cheaper than the fossil fuel industry.

  5. There is another aspect to this issue, the privatised power distribution monopolies, separate from the national grid and energy providers. In our area, (SSEPD) we were quoted £20k to connect our (19th century) house to distribution poles just 70 metres away. Actually, not even to the house – it was to get the power to the boundary of our garden. When challenged at this outrageous cost, they reply that the terms of their monopoly limit their percentage mark-up. But it seems no-one checks on the mark-up of an imagined figure. While we are aware of the impact on us, and therefore our choice to remain off-grid, they must be making a killing off new housing initiatives etc.

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