A report from Ernst and Young on the proposals to launch an Energy Company owned by the Scottish Government gives little hope that the Company will give a substantial boost to renewable energy. The report was issued by the Scottish Government in advance of consultations on the Energy Company being started. At the time of the SNP’s Conference last October (2017) Nicola Sturgeon announced the intention to start a Scottish Government owned energy company and that: “Energy would be bought wholesale or generated here in Scotland – renewable, of course – and sold to customers as close to cost price as possible,” she told the Scottish National party conference in Glasgow on Tuesday. “No shareholders to worry about. No corporate bonuses to consider.” Hopes that such a company would be able to open the doors to the many possibilities for cheap onshore wind and solar farms in Scotland are likely to be dashed if the company is formed following the priorities set down in the report. The idea of ‘increasing the proportion of energy from renewable sources’ is relegated to ‘phase two’ of the agenda for the Company (see page 16). In political terms this means that whilst there may be a lot of advertising focus on how the company gets its energy from renewable energy sources, in reality little or no new energy will be sourced from new renewable energy projects – that is unless they would have been started anyway as a result of programmes funded by Westminster.
Dave Toke’s Blog 9th April 2018 read more »
Publicly Owned Energy Company: Strategic Outline Case (SOC).
Scottish Government 29th March 2018 read more »
Nicola Sturgeon has been warned that a potential Scottish state-run energy company would face significant challenges trying to compete with established players in the market. EY, the international consultancy company, studied the first minister’s proposal to create the new enterprise. While analysts said it was possible for the Scottish government to set up such a company and help consumers, the energy landscape was very crowded. It would be difficult for the new state entity to compete effectively and deliver the low prices Ms Sturgeon has promised, EY said. Set-up costs alone would be about £3.5 million, and up to £9 million a year would be needed to run it. They also forecast that the company could be forced to operate at a loss for several years and that state aid rules would prevent the government from subsidising energy bills to lower prices. The report set out several options, including taking over an existing socially motivated supplier; creating a central supply company and using councils to deliver energy; and the creation of a fully-fledged Scottish government company to supply and deliver energy. They said a new energy company could be well positioned to attract customers if it could provide competitive pricing. If successful, it could also encourage greater energy efficiency and support sustainable economic growth.
Times 10th April 2018 read more »
Scotsman 10th April 2018 read more »
A SCOTTISH state-owned power firm could help boost the economy and alleviate fuel poverty, new analysis suggests. A report by consultants EY for ministers sets out the options for the kind of company Nicola Sturgeon aims to set up to cut fuel poverty by the end of this parliament in 2021. If successfully implemented, the report says this could encourage greater energy efficiency and support sustainable economic growth. However it warns the financial landscape could present “significant challenges” to setting up a new energy firm in a “highly complex and competitive market”. Of the 42 domestic energy suppliers offering services in Scotland, the report says around half recorded losses in their most recent financial statements, including two of the so-called “Big Six” companies.
The National 10th April 2018 read more »