Craig Dalzell 23rd September 2021
I was really hoping that this week’s column would have been an ecstatic story of public democracy winning out over policy-by-diktat. I can’t tell you how disappointed I am that it won’t be.
The story of a Scottish National Energy Company is one that is deeply intertwined with the story of Common Weal. Before Common Weal was even an independent think tank, when it was still a policy unit within the Jimmy Reid Foundation, it published a call to renationalise energy in Scotland, how doing so would allow Scotland to develop our renewable energy resources to the full, bring energy to consumers in a way that benefited the society over profits and how it would help us reconfigure our energy infrastructure to meet the challenges of transition to a decarbonised sector.
We have kept up our work in this area ever since, to the point of forming a dedicated Energy Working Group within Common Weal composed of some of Scotland’s top experts in the sector. We have created a detailed blueprint called Powering Our Ambitions which laid out what a nationally owned energy company (NEC) should be, should do and how it should be run. In short, the company must be more than just an energy supplier but must own and develop its own energy assets. We said this long before the current volatile energy crisis laid bare the vulnerabilities of the “energy market” imposed on energy companies that don’t own anything and merely supply customers.
Keith Baker from the CW Energy Working Group and co-author of Powering Our Ambitions explained it to me well, saying:
“Asset owning companies are protected against this volatility by the simple virtue of owning infrastructure and generation assets that can be used to leverage capital in times of need – be that when profits are squeezed by energy price spikes, when they are obliged to offer lower tariffs for fuel poor customers, or when they are needing to expand their capacity to meet increasing demand. Furthermore, an asset owning public energy company would be under government direction to serve the people of Scotland and would pay all its taxes back into the public purse.
“This also means it would be mandated to be a renewable energy company and to play a vital role in the alleviation of fuel poverty through offering fair tariffs to low income and vulnerable householders, and to use the qualified employees who would work for it to target support directly, and on the ground, to those most in need.”
We know that national energy companies can work because we see them in almost every country in Europe. We even see them in Scotland – albeit that they are owned by those same European countries. It was reported yesterday that Scotland now hosts the world’s largest floating wind farm and that 100% of its output has been bought in advance by the Norwegian national energy company Statkraft. Given that most of the energy generated by this wind farm will actually be consumed by Scottish energy users (we don’t have a direct transmission link to Norway) this means that your energy bills will soon be subsidising Norwegian public services. If we had a national energy company to do this job ourselves, that money would be reinvested into our own public services including bootstrapping our own energy transition.
I remember the headlines that were generated by the SNP’s announcement in 2017 that they had accepted the case for public ownership though it became clear very quickly that their heart wasn’t in it. Despite the evidence, they seemed intent on the company only being a supplier, not a generator. Then after the 2019 demise of Our Power they got spooked and shelved the plans – finally scrapping them as quietly as they possibly could.
Except the members of the SNP conference the week after the cancellation evidently objected and nearly unanimously passed a motion in favour of a public energy company. This was followed up yesterday by Monica Lennon’s amendment to the Net Zero Nation debate motion to reintroduce an NEC along the lines proposed by Powering Our Ambitions and to add an actual policy to a motion which otherwise wasn’t much more than an afternoon dedicated to saying “Parliament agrees with things that the Government is already doing”.
Unfortunately, despite the clear mandate from members, the SNP chose to vote against the amendment. Perhaps worse, the Greens also chose to vote against citing today their objection to a national company in favour of local companies and cooperatives. This appears to me to be little more than retro-active face-saving given the confusion and backlash from members and the wider body politic. For the record, the Powering Our Ambitions plan explicitly bakes in the kind of national framework/local control that the Greens are calling for. Their objection also doesn’t address the problem that large-scale infrastructure requires national planning. A local cooperative or municipal project won’t be building something like the aforementioned floating wind farm.
A further concern that limited devolved power over electricity means that an NEC should focus on decarbonised heating was also addressed by me in a recent article in the Herald. I agree with that analysis and indeed point out that this is the reason that we need to build our heat strategy on heat delivery via district heating systems . Going down the path that the Scottish Government currently favours – air source heat pumps – will result in placing even more burden on an electrical grid that we couldn’t reform until we’re independent.
Yesterday’s objection to the NEC policy was a disappointing failure that should have been an easy win for all three progressive parties. From the SNP’s point of view, I understand the political price of a U-turn but that should have been washed away by embracing internal party democracy. If the Greens objected for the reasons stated, then they’ve misread a paper that is calling for everything they’ve asked for.
Make no mistake though. The failure to take public control of Scotland’s energy will mean that we will almost certainly fail to meet our Green New Deal targets (whilst simultaneously funding the state of Norway and any other country whose public energy company sets up shop in Scotland). In the 1980s, Thatcher made sure that everyone was encouraged to “Tell Sid” to help privatise the UK’s energy and other public assets. Many ordinary folk did but many of those sold off their shares quite quickly afterwards.
In the last few weeks before COP26, do the SNP and the Greens really want to be the ones telling Sid to go to the institutions and hedge funds who now largely own those assets not to worry, that their shareholders are safe?
There is a way out of this. If any interested MSPs from any party would like to meet our Energy Group to get a full briefing of what the NEC would actually do for Scotland then we would be more than willing to make the necessary arrangements. We’d even be willing to facilitate a roundtable discussion with a cross-party group – in line with the First Minister’s own call for a less tribal and more collegiate Parliament. Scotland needs to move quickly to ensure that we meet our climate targets. We’ve already wasted five years dithering with and dropping plans for a National Energy Company. It’s time to take up the challenge and bring Scotland up to the standard that our neighbouring peer countries simply consider normal.