Have a Scotland Supply and Generation Company

Have a Scotland supply company organised in a similar way to Scottish Water - i.e. a private company owned solely by the Scottish Government.

Unlike private suppliers this could be run for the benefit of the customers and any profits reinvested into insulation or cheaper rates.

Ideally a Scotland Supply Company should own generation capacity as well to maximise profits to be reinvested.

Why the contribution is important

I understand that this is a complex decision and has lots of issues but it is not impossible to do. There are lots of reasons why this is a good idea - and I am sure there are more.

This was an SNP policy for some time and was dropped.

I think the recent crisis demonstrates the advantages of having government owned supply and generation - looking at European price rises vs the UK. (Especially France.)

Although supply companies are not directly responsible for the increase in costs as this is linked to the cost of gas etc. suppliers do make a profit (albeit capped at about 2%). This would be better invested in Scotland and not going into the pockets of shareholders. At the moment a 2% drop in bills would be more than welcome.

Scottish water has lower bills than English water companies and spends 35% more on infrastructure than English companies.

Having power generation in the hands of large companies means that they are interested only in profit, the profit of generation companies is currently obscene.

Most tend to go for the maximum CfD rates they can rather than those that will make a fair profit.
There have been cases where large schemes have been too greedy and lost out while community schemes in the same area haven't been greedy and won.

Perhaps as part of licencing of new developments the Scottish government can take a percentage of each new scheme and sell the power produced here.

by Tony on August 26, 2022 at 09:09AM

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Comments

  • Posted by IdeLW August 27, 2022 at 15:53

    I strongly support this important suggestion which would bring more control to Scotland.

  • Posted by IainW September 05, 2022 at 10:38

    It would make little sense to set up an energy company that only did supply. As the text of this idea makes clear, supply margins are very slender so there is little value to give away. Electricity market prices are high because the market clears around the marginal price of the most expensive unit required to meet demand (even in a bilateral market such as that in GB). This approach to pricing reflects 20th century technology and is unhelpful in a largely renewable system as is increasingly the case in Scotland. By owning generation, a ScotGov owned energy company would directly capture the excess inframarginal rent from high market prices and offer genuine savings on customer tariffs. The energy company should also have a social clause as was the case for the old North of Scotland Hydro-Electric Board, which required it to carry out its remit in a manner that benefitted the community it served.

  • Posted by Tony September 05, 2022 at 17:54

    IainW - do you have any more information on the social clause? It would appear to be that this is something that should be resurrected.
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