Not the price of Net Zero - the cost of the Union
On the 1st of April, the energy cap on domestic energy bills rose by 6.4%. Right-wing commentators like to argue that the push for Net Zero is putting up energy bills. They have got that wrong - it is the privatisation of energy which is to blame for the fact our energy bills are sky high.
Renewable energy is cheap to produce but the cost of making it does not have anything to do with what Scots pay to heat their homes and cook their food.
Westminster governments, which Scotland didn’t vote for, privatised the energy network in the 1990s. Research carried out for the End Fuel Poverty Coalition shows private energy companies across the UK have pocketed over £420bn in profits.
The companies that were handed control of Scotland’s energy networks oversee a natural monopoly industry. They’ve reported higher profit margins than any other sector of the economy.
The UK is the only European country to have privatised its energy network bar one. Portugal is the only other European country that did that, not for ideological reasons but in the grip of a financial crisis. They have the second-highest fuel poverty rates in Europe.
Scotland has the highest energy poverty rate in Europe - at 31% it is much higher England (13%). Scottish businesses pay the highest energy tariffs in the world.
That has Scots scratching their heads - because Scotland produces more wind power for its size than almost any other country - and that is one of the cheapest energy sources in the world.
The profits that the energy companies make are directly from the pockets of Scots families and businesses. It is the price Scotland pay for letting another country take decisions about our natural resources against the political will of the Scottish people. We never supported that at the ballot box. Never.
The so-called average energy bill is not a Scottish average
The domestic tariff per unit of electricity used is the same across the UK. No doubt you will hear on many media outlets that this will means the cost of energy for a typical household will be £1,849. “If you use more, you pay more” they assert.
But they almost never mention that most of Scotland outside the central belt pays at least double this on average.
More than 8 in 10 households in the Western Isles are in energy poverty. Bills there are an average of £4,000 a year. These unaffordable bills are contributing to a new Highland clearance in the heartland of Gaelic culture.
It is a similar story throughout rural Scotland, particularly in the islands where it is harder to source timber off cuts, and other alternative sources of heating.
These bills are because the tariff is kept artifically high for electricity in these areas. These households don’t have access to the gas network which is what most people use to heat their homes. It is much more expensive to use electricity on this UK-wide tariff - even for homes that are within sight of wind turbines making energy for pennies.
Billions squandered in turning off wind turbines
Rather than charge a lower electricity tariff for homes with no access to the gas network, the UK government pays the energy firms the top price for turning them off.
Almost £2 billion of public money is now being paid every year to turn off turbines when the UK’s weak national grid is full. Most of that is in Scotland. This money could support Scottish households and businesses that are closest to the turbines with lower prices.
Some energy bosses - like Greg Jackson of Octopus Energy say it is time to make energy tariffs in Scotland cheaper.
“Prices in Scotland would become some of the cheapest in Europe, allowing Scottish businesses to thrive.”
Jackson said: “Under our current system, struggling Scottish households and businesses pay some of the highest energy prices in Europe.
“Under zonal pricing, the whole country would save £55 billion on bills. Prices in Scotland would become some of the cheapest in Europe, allowing Scottish businesses to thrive.”
The majority of Scottish businesses support changing to zonal pricing. If energy prices dropped significantly, businesses would increase staffing levels (64%), invest more (74%), and lower prices for customers (70%).
It’s no surprise that energy firms benefiting from payments to turn off turbines and their industry bodies oppose zonal pricing. The current arrangement is lucrative.
SSE’s network division is called SSEN Transmission. Its annual report stated, “SSEN Transmission continues to deliver strong operational performance in 2023/24, achieving 95% of the available reward through the ‘Energy Not Supplied’ (ENS) incentive, equating to £730k additional income.”
It’s clear that private firms, focused on shareholder profits, will oppose zonal pricing. It will take longer to develop new businesses in areas where energy is cheap.
It will be better for Scotland’s economy in the long run, and it will be much much better for families and businesses in those areas - but that is not something private businesses are necessarily interested in. However even introducing zonal pricing will take years to lower prices in these rural areas.
If Scotland were independent, it would be in a very different position
Scotland did not vote for the UK governments that privatised energy in the 1990s. This has proved a disaster for Scotland.
- Our businesses pay the highest tariffs in the world
- Scots face the highest energy poverty rates in Europe
- In areas like the Western Isles the unaffordable energy bills are making it almost impossible for ordinary families to afford to live there
- Scotland’s economy, wellbeing, and culture are suffering from these unfair energy bills.
- The drive to end child poverty is hit.
- Businesses are being pushed to the wall and jobs are being lost.
If an independent Scotland renationalised energy, it could earn billions from exporting power to rUK and beyond. We could charge less for Scots to use the energy made from resources that belong to us all - the wind, the tides, the sun.
Creating Scotland in Dundee
Following our first two hugely successful ‘Creating Scotland’ events in Perth and Glasgow, we are thrilled to announce Creating Scotland is coming to Dundee.
Join us for an afternoon of celebrating traditional and contemporary Scottish culture, featuring music, singing, poetry, readings, humour and creative thinking about independence. The event will take place at the Bonar Hall on Sunday, May 11th at 1pm.
Click here to book your tickets now. Tickets are £10 each.
