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Powering Our Ambitions

Overview —

A blueprint for a National Energy Company that would own Scotland’s energy infrastructure and a Scottish Energy Development Agency to determine where future infrastructure should be built.

Credits—

Dr Keith Baker, Gordon Morgan

Dr Ron Mould, Iain Wright

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Common Weal calls for the Scottish Government to launch a National Energy Company and a Scottish Energy Development Agency.

These bodies would work together to rapidly and strategically decarbonise Scotland’s energy network whilst also supporting community energy projects and developing the new skills and technologies Scotland – and the world – will need to face the challenges of climate change and fuel poverty.

This paper has been produced by Common Weal’s Energy Policy Working Group

KEY POINTS

― The Scottish Government’s aim of establishing a publicly owned energy company (NEC) presents a number of significant and substantial opportunities to demonstrate leadership in developing renewable and low carbon energy supplies, tackling climate change and other environmental issues, and addressing the need to provide low cost, low or zero carbon energy to Scotland’s fuel poor and otherwise vulnerable householders.

― It would be a serious missed opportunity if the NEC was viewed simply as a publicly-owned energy supply company. This has limited opportunities to tackle the above problems and would have only a slight effect in lowering retail fuel costs.

― A Scottish Government Energy Development Agency (SEDA) should be established alongside the NEC as a commercial company. The NEC would, until the establishment of a Scottish energy regulator, be ultimately regulated by Ofgem for relevant parts of its activities. This dual approach should largely mirror the successful approach adopted by the Danish Energy Agency.

― The NEC should be established as both an energy supplier and, more importantly, as a developer and manager of energy generation, distribution and fuel supply assets. Although we are not of the view that the NEC should seek to replace Scottish Hydro-Electric Power Distribution (SHEPD) and Scottish Power Energy Networks (SPEN) as distribution network operators (DNOs) or distribution systems operators (DSOs), there are clear benefits and co-benefits to be gained from the NEC being directly involved in the development and management of new heat networks and microgrids. The potential for the NEC to become a single nationalised DNO/DSO is an issue that would merit reconsideration as the company develops, and / or after Scotland secures full devolution of all energy powers or gains independence.

― The SEDA should coordinate the distribution of R&D funding and any funds associated with strategic planning and overcoming the rural / urban fuel divide, coordinate and prioritise the training of technology experts in district heating type technologies and enable wider social and economic value through identifying projects that may offer poor commercial returns but would deliver indirect benefits (co-benefits) to the economy, society, and the environment. These projects could then be managed and delivered by the NEC where no other suitable delivery vehicle exists. Therefore, the assessment and justification for public investment in the NEC should not be limited purely to measures of direct benefits and commercial success, but should as in the development of hydrogen and wave power projects in Orkney, be seen as a catalyst and test bed for future commercial projects.

― A fundamental aim of the NEC should be the strategic development and delivery of new zero / low carbon energy supplies to fuel-poor and otherwise vulnerable householders and to rural, remote, and otherwise disadvantaged communities. The most important, and generally most appropriate, technologies here are community and building-scale electricity generation technologies (solar photovoltaics, community-scale wind, micro-hydro, etc) and either building-mounted solar thermal or multi-technology district heating systems that combine sustainable energy supplies, for example large-scale solar thermal, geothermal, suitable biomass, or hydro, with inter-seasonal heat storage, and heat recovery systems. The scope of the NEC’s operations should also, therefore, include the development of local, sustainable, fuel supply chains.

― The NEC should, through guidance from its board and in accordance with the aims of the SEDA, seek to enable, rather than compete with, the growth of other non-profit and community-controlled energy companies. But the Scottish Government should, with urgency, look at the assets and infrastructure of the recently closed down Our Power business to see if these might be purchased or acquired to form some of the necessary infrastructure of the NEC.

― The establishment of the NEC also opens up an avenue for the development of a public National Energy Service along the lines of, and integrated with, the NHS and other public services for the purposes of sharing data to enable all bodies to better meet the support needs of fuel poor and otherwise vulnerable householders.

― Where upgrading the insulation of or substantial alteration to buildings is not allowed as part of decarbonising new and existing buildings the NEC and SEDA, backed by simple and appropriate legislation, should act as a vehicle for ensuring such solutions (e.g. new off-site renewables) are retained within or close to local communities.

― The establishment of the NEC will enable the ramping up of the development and deployment of a number of community and household scale renewable and low carbon technologies which have so far been significantly under-utilised as part of the Scottish Government’s strategies for reducing emissions, tackling fuel poverty, and enabling community empowerment. Particularly, small and large-scale solar thermal, inter-seasonal thermal storage, anaerobic digestion, and biomass using local, sustainable fuel sources that would provide additional co-benefits to local communities, the economy, and the environment. In Island communities, the role of hydrogen as a fuel may be part of this mix particularly as regards ferry transport, energy storage, and the production of syngas. In these latter cases the roles of the NEC should include enabling the development and, where appropriate, management of the supply chains.

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