Rising energy prices have long been a political hot potato. But it’s still bizarre to watch Theresa May and Nicola Sturgeon grab the issue as a lifebelt to keep their political fortunes afloat. The first minister was, of course, pandering to the SNP’s left-wing party faithful with her promise to establish a non-profit, publicly owned energy supplier. But her idea makes a lot more sense than the prime minister’s ill-conceived plan to impose what will now be a temporary cap on energy prices. The problem is neither offers a solution to high energy bills. You won’t be surprised to learn there isn’t any detail about Sturgeon Energy. As ever with the SNP, the headline comes first, delivery a distant second. The problem with Sturgeon Energy is that it will cripple choice and distort the market as much as May’s price cap. A new entrant, backed by taxpayers’ cash — and through the government enjoying easier access to capital — could destroy small private-sector challengers that are providing improved deals for those who can be bothered to switch.
Times 15th Oct 2017 read more »
For hard-pressed Scottish families who have seen energy bills double over the past decade, it’s not hard to see why Nicola Sturgeon’s plan to establish a new state-owned energy firm was met with some enthusiasm. The First Minister’s announcement last week that her government was to become a player in the increasingly crowded energy supply market was certainly radical and went some way further than Prime Minister Theresa May’s move to impose a price cap on bills. The politics of this are a marked shift to the left by both leaders to meet the seeming appetite among sections of the electorate, particularly in Scotland, for the politics of Jeremy Corbyn. The Labour leader has already proposed a network of public energy companies. But as energy generation shifts towards a de-carbonised, green network, can a state operator reall y do much more than other providers to keep down prices? The prospect of such a company breaching EU state-aid rules, aimed at preventing governments from distorting the market place, has been raised by industry figures. But Scottish ministers point to the example of the arm’s-length company David MacBrayne, wholly owned by ministers, which runs the CalMac ferry brand and has operated effectively for decades with some delicate manoeuvring to navigate EU procurement rules. Similarly Scottish Water, another publicly owned Scottish utility, seems to get along without a problem from Brussels. The French government is also an active player in the energy market with its majority stake in the power giant EDF, although this is a profit-making enterprise unlike Sturgeon’s proposed body. EDF is also a player in the energy generation market and operates a number of major nuclear plants around Europe – including the two remaining in Scotland at Hunterston and Torness.
Scotland on Sunday 15th Oct 2017 read more »