Scotland’s Public Energy Company

At the SNP party conference earlier this week in Glasgow First Minister Nicola Sturgeon announced plans to create a new state owned energy provider. The main aims of this new venture would be to promote renewable energy generation and help reduce rising energy costs for consumers.

Energy generated or resold by the new company would be available across Scotland as an alternative to privately owned providers such are Scottish Power, Scottish Gas, and Scottish and Southern Energy.

In her announcement Ms Sturgeon claimed that the company would be incorporated by 2021, supplying both electricity and gas and would give consumers in Scotland the option to switch to a supplier only concerned with securing the lowest price for customers.

Ms. Sturgeon also stated that the company would be fully operational by end of the current parliament and that more details will be set out in the government’s forthcoming energy strategy.

“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 said. “No shareholders to worry about. No corporate bonuses to consider. “It would give people – particularly those on low incomes – more choice and the option of a supplier whose only job is to secure the lowest price for consumers.”

Both the Labour and Conservative Parties have recently announced energy price cap policies with Labour also having recently suggested a not for profit energy provider. Scottish Labour interim leader Alex Rowley accused the SNP of “passing off” his party’s policies as her own and an attempt to address fears among senior SNP strategists of a Labour revival in Scotland. However the SNP had pledged to explore the option of a new publicly owned, not for profit energy company during the campaign for last year’s Holyrood election.

Responding to Ms Sturgeon’s speech, Mr Rowley said: “From a not-for-profit energy company to teacher training bursaries, action on period poverty and promises on public sector pay, this conference shows that it is Labour which is setting the policy agenda in Scotland.”

Emma Grant McColm, energy spokesperson for the Citizens Advice Scotland Consumer Futures Unit last night cautiously backed the announcement. “We would welcome any intervention that genuinely increases fairness for energy consumers,” she said.

Claire Mack, chief executive of Scottish Renewables, said a state-owned energy firm could provide a “one-stop-shop” or gateway to accessing public funds.

We at ILI Energy see both positives and negatives in this announcement however it also raises many questions which we believe have to be answered sufficiently prior to it becoming operational. As they plan to generate at least some of the energy it will be providing they will have to own energy generation installations.

Will it be developing these themselves or will they be looking to purchase them from developers? How does this affect planning for such developments especially since the Scottish Government is currently involved in the planning stages of large scale installations?

As they also plan to buy energy and effectively be a reseller much in the same way as Robin Hood Energy and Bristol Energy in England who will they be buying it from and will they have long term power purchase agreements? How will they decide who to buy it from?

Also how will these meet concerns with competition regulations? As stated we are not against this however we strongly believe that a lot has to be satisfied before it can become viable.

That said we are very much for affordable clean energy for all and if this is a mechanism which can achieve this in a way which is commercially fair then it could be beneficial for all of Scotland.