The harm in losing a National Energy Company

by | 10 Sep 2021

The Scottish Government has dropped plans for a publicly-owned National Energy Company. What does this mean for Scotland?

Quietly, just before the Programme for Government was announced, the Scottish Government made known that its promise to create a National Energy Company had been dropped. This had none of the fanfare of the announcement of its creation.

This appears to bring to an end the long, sorry story of a publicly-owned, public-good energy company in Scotland and the implications of this are grave for Scotland.

The origins of the SNP’s commitment to this policy are unclear. It was a policy Common Weal developed during the independence referendum but it was explicitly rejected by the SNP. It was therefore something of a surprise when it appeared in the 2016 manifesto and no-one seemed to be clear on how it got there.

There was no further mention of this until the 2017 SNP conference. At this a National Energy Company resurfaced again as a keynote part of Nicola Sturgeon’s speech. It was believed at the time that this had been a very late addition to the speech when aides felt it had no news line. Either way, it was announced mainly as a retail energy company.

This may have been influenced by the development of Our Power, a mutually-owned, public-good energy supplier which had grown over a number of years. Indeed Common Weal had suggested that Our Power should become the seed of a National Energy Company and something like this seemed to be the basis of the plans.

However, sadly, Our Power went into administration within weeks of the conference speech which seemed to put an end to this model. More than that, this seemed to put an end to the entire policy – there was no further mention of a public energy company from the Scottish Government after that (although they seem to have spent £500,000 on consultants).

In fact it wasn’t mentioned again until the First Minister was questioned about it in Parliament by the Scottish Greens, when she blamed Covid despite work ceasing long before the pandemic. Even a few weeks ago she indicated under further questioning that she ‘hoped’ it would be in the final agreement with the Scottish Greens.

Scotland now seems locked into a quite stupendous degree of failure of economic policy in relation to renewable energy

But it wasn’t, and now a policy which seems never to have been properly understood or fleshed out is finally dead].

The implications of this are deeply embarrassing; the proposal is actually on the agenda to be debated at the weekend’s SNP party conference (which has strongly supported the proposal in the past) and the Scottish Greens are now complicit in a failure they were previously highly critical about.

But the real implication is for Scotland. The National Energy Company would have had three roles. In fact supplying retail energy was probably the least significant of them because it is unlikely that, trapped inside the UK energy market, it would have been able to do much about reducing prices (though could have increased energy security for poorer customers).

Much more significant is that the energy company would have been the vehicle to enable Scotland to take public ownership of new energy generation infrastructure or, better still, to have outright owned new developments. This was supposed to prevent the repeat of the experience of oil where failure to own any of the infrastructure did enormous economic harm to Scotland (in comparison to somewhere like Norway which developed its oil in public ownership).

Finally, a National Energy Company would have been the mechanism which would have allowed Scotland to capture the technology manufacturing jobs which it has so visibly failed to capture since the renewable energy boom started. In fact, Scotland’s only manufacturer of wind turbines actually went bankrupt this week.

This is a quite spectacular failure by the Scottish Government and will do little to persuade anyone it is not heavily influenced by the interests of the big energy companies in Scotland.

But what is much worse is that this is likely now to entrench a sequence of systemic failures which will see Scotland fail to either own or make any real economic gain out of its burgeoning renewable energy resources.

Scotland now seems locked into a quite stupendous degree of failure of economic policy in relation to renewable energy, destined to have its energy resources owned almost exclusively by foreign multinationals corporations and the infrastructure and technologies manufactured almost anywhere except Scotland.

Pin It on Pinterest

Share This