Set up a publicly owned energy company
The Scottish Government should set up a publicly-owned energy company with a broad remit, including generation, and support municipal energy generation projects, potentially combining both of these.
In the Energy Strategy consultation, the Scottish Government makes clear, reiterating again, that it will not be proceeding with a publicly-owned energy company, despite the fact this was once Scottish Government policy and Green Party policy, and the September 2021 SNP conference voted for it. It claims that a company involved in major energy generation would only be possible in an independent Scotland, but Wales is proceeding with an energy company131 and the Labour Party is proposing to create GB Energy, which would supply 100% ‘clean’ power by 2030.132
The first Scottish Just Transition Commission called in March 2021 for the Scottish Government to deliver the public energy company they had promised “at pace” and with a broad remit.
The think tank Common Weal said that the failure to create a state-owned Scottish energy company that could have been involved in developing and deploying new offshore wind farms was “arguably the greatest economic failure of the last decade.” The Herald reported in January 2022 that such a company could have sold the new ScotWind offshore electricity to the grid and retained the operating profits, with concerns that the failure would cost Scotland between £3.5 billion and £5.5 billion every year – about a tenth of the Scottish budget.133
Unions criticised the Scottish Government plan for being only a ‘white label’ supplier role. SCCS strongly supports a publicly-owned energy company which is involved in generation. SCCS agrees that a publicly-owned energy company, potentially working with local authorities on energy generation, has a key role to play including in how Scotland continues to tackle fuel poverty and the cost of living crisis, all interlinked with the climate crisis.
Beyond a single national company, new specialist publicly-owned energy companies with a remit to co-invest into and develop new clean energy generation, and grow shorter supply chains and industrial capacity should be central to Scotland’s energy strategy. For larger scale projects, companies could initially begin life as a minority co-investor with private sector partners, to accumulate experience, skills and capacity. Offshore wind and tidal stream should be a priority for such investment.
The Scottish Government should also take ownership stakes in privately-owned ports and strategic maritime support infrastructure, where current owners are failing to upgrade or invest in line with the needs of the climate transition. By assessing existing ports and fabrication yards capable of renewable manufacturing, providing funding in return for an equity stake or bringing them into public control and providing guarantees of jobs in manufacturing, the Scottish Government will be able to ensure that communities with existing infrastructure will be able to take full advantage of the Just Transition.
Local authorities should be encouraged and supported to set up local and/or regional public energy companies, investing and building new renewable generation within and beyond their local geography.
This policy will create jobs, and help to tackle inequalities and support the Just Transition.
For further information:
- A Scottish public energy company for generation. Video of presentation to Just Transition Partnership ‘Reclaiming Our Energy’ conference. Mika Minio-Paluello, Transition Economics, February 2023, https://www.youtube.com/watch?v=SjzEABDu-Yg&list=PLqk-4e9lz2yNKNNUg93YlozX5 KvQ87UlD&index=6
- Reclaiming Our Energy conference, Just Transition Partnership, 2023, https://www.jtp.scot/ reclaiming-our-energy/
- Action for Jobs: STUC, 2021, https://stuc.org.uk/files/Election21/Action_for_Jobs.pdf
- STUC Response to the Economy, Energy and Tourism Committee call for views on a Publicly Owned Energy Company, 2018, https://www.parliament.scot/S5_EconomyJobsFairWork/Inquiries/EEFW-S5- 18-POEC-17-STUC.pdf
Wales to set up own public energy firm after Scots Gov blows plan, Herald, November 2022, https://www.heraldscotland.com/news/ homenews/23152165.wales-set-public-energy-firm-scots-gov-blows-plan/ & Wales launches publicly owned energy company with focus on community renewables, Edie, August 2023, https://www.edie.net/wales-launches-publicly-owned-energy-company-withfocus- on-community-renewables/
Labour’s plan for GB Energy, Labour Party, 2023, https://labour.org.uk/issue/clean-energy-by-2030/ (Labour include nuclear power in their definition of ‘clean’ power).
ScotWind: Scotland set to lose billions in windfarm profits, Herald, January 2022, https://www.heraldscotland.com/news/ homenews/19868171.scotwind-scotland-set-lose-billions-windfarm-profits/