The UK broke Scotland’s energy system - independent countries enjoy their power

Almost a quarter of every Scottish energy bill paid goes straight to company profits rather than on investment in our energy infrastructure.  In contrast, bill payers in independent, energy-rich countries enjoy affordable bills. Their systems benefit citizens, wellbeing and the economy.

For forty years, Scots have lived under an energy regime privatised and fragmented by consecutive Westminster governments that prioritised the needs of London and the south east and not Scotland. We were given a system designed not to provide affordable energy to Scotland but to extract value from Scotland. 

This is holding Scotland back, reducing the size of our economy and imposing energy poverty and misery on many Scottish families with high costs driving the highest energy poverty levels in Europe. 

Isn’t it time that Scotland had a say in how its energy is regulated, planned and managed? The UK doesn’t care about what works for Scotland. Scotland is an energy-rich country with fuel poverty levels far above England’s or any EU country. 

We take a look at the very different picture enjoyed in other smaller northern European (but crucially) independent countries below.  Only with independence can Scotland get the power to change this broken system. 

The situation in Scotland

Privatisation was sold in the 1980s as the route to competition, efficiency, and lower bills. Instead, it has created an elaborate web of shareholder returns and foreign ownership that now costs Scottish households and businesses a fortune. The profits flow outward: the higher bills and the economic consequences stay here. 

The grid has not been funded as a national infrastructure project. In recent years, the cost of upgrading the neglected, privatised grid has been loaded onto electricity bills, which has left the UK heavily dependent on imported gas. 

A Citizens Advice report used Ofgem’s own data to calculate the UK's energy network operators have benefited from £4 billion in excess profits over the last four years, leveraged from customers’ bills. 

Since 2010, UK energy companies have paid out £70 billion in dividends and shareholder payouts. A big chunk of that wealth has been driven by Scotland’s resources. 

Scotland’s main electricity networks - SP Distribution and SP Transmission in the south and central belt, both owned by the Spanish energy giant Iberdrola, and SHEPD in the north, owned by SSE plc - paid out more than £200 million in dividends in 2024, most of it leaving Scotland entirely.

A lot of that money came directly from the Scottish consumers and businesses in Scotland’s tragic irony of creating a surplus of renewable energy while paying some of the highest bills in the world. 

On the Scotsman’s paid “partner content’ pages, Eric Knight of Knight Vinke, one of SSE’s major shareholders wrote in January: “SSE has generated a total shareholder return of more than 60 per cent…Its Scottish transmission business is now one of the fastest-growing in the world, with regulated asset value increasing by 30 per cent a year.” 

Scotland’s potential is being held back

While energy-rich countries such as Norway or Denmark are leveraging their resources to power strong, low-cost, export-driven economies, Scotland’s potential is being throttled by a privatised market structure it never chose.

The UK government has turned its back on zonal pricing for consumers - insisting on the same tariff for buying energy across Great Britain. That means the only way Scotland’s renewable energy can be utilised is if enormous sums are spent on creating huge electricity superhighways to move it south. 

The UK government’s new grid reform has explicitly deprioritised Scottish onshore wind. They have chucked 13 gigawatts of Scottish onshore wind projects off the priority queue for grid connection because the way the UK structures its energy market disadvantages Scotland. 

In a podcast called “Is UK Grid Reform Really Working?” energy policy expert Ed Birkett explains that the queue for grid connection has been reshuffled into two piles, one for priority applicants and one for the rest, who have been told to try again after 2035. When asked to name the winners and the losers from this process, Birkett said:

“There has been 13.4 gigawatts of onshore wind secured that has been kicked out. And we estimate that between six and eight gigawatts of that has already submitted planning applications, and 100% of that is in Scotland that’s been kicked out….Why are we doing that? It is a bit hard to understand, to be honest.”

The UK does operate zonal pricing for energy producers because they are made to pay the cost of building the infrastructure to move power south. Most counties have a postage stamp-style system where everyone pays the same and the cost is shared. 

But small producers in the north of Scotland are being charged more and more to connect to the grid. A major wind farm off Orkney has just been paused due to this. 

Calum MacPh­er­son, chief exec­ut­ive of the Inverness and Cro­marty Firth Green Free­port, said trans­mis­sion char­ging was already dis­tort­ing where renew­able invest­ment is flow­ing across Bri­tain.

He warned that a grow­ing share of projects secur­ing gov­ern­ment fund­ing were loc­ated out­side Scot­land, cre­at­ing knock-on effects for ports, man­u­fac­tur­ers and inter­na­tional investors assess­ing where to base sup­ply chains. 

He told the Press and Journal: “If industry believes far more projects will be in the south of Eng­land, they will base infra­struc­ture there instead…“The cur­rent regime for developers in the south of Eng­land is abso­lutely fant­asy. They are being paid to con­nect rather than charged to con­nect.For every month’s delay on projects in Scot­tish waters it has ser­i­ous implic­a­tions in terms of investor con­fid­ence. Ima­gine this were reversed.Ima­gine there were a mech­an­ism pen­al­ising projects in the south of Eng­land.”

The fragmented, privatised energy system is broken - Westminster broke it.  It is particularly egregious for Scotland. Only with independence can Scotland build a system more like those of other small, independent countries. 

A better model is possible

Across Europe, countries that kept their energy systems in public or majority public hands are thriving. These nations treat energy as a strategic national asset, not a commodity to be traded for private profit. Here are some examples: 

• Norway 

Norway Statkraft, the state energy company, is Europe’s largest renewable power producer. Statkraft’s profits - more than £3 billion in 2023 - go straight into Norway’s public finances, helping to fund infrastructure, education and one of the world’s largest sovereign wealth funds. Norwegians enjoy some of Europe’s lowest energy prices, while the grid is among the most reliable anywhere. 

• Denmark

Its state-backed company Ørsted, still majority-owned by the Danish government, has become the world leader in offshore wind. The Danish grid remains publicly coordinated, and thousands of local cooperatives own shares in community wind and solar projects. This partnership between state and citizen ownership has kept Danish energy stable and affordable while creating a global export industry in clean technology. Denmark has two electricity zones. 

• France

The government moved in the opposite direction to the UK by re-nationalising EDF in 2022, recognising that energy security and economic competitiveness are too important to be left to market forces. EDF’s integrated, publicly owned model allows coordinated investment from nuclear to renewables, and French households continue to pay around 25–30 per cent less for electricity than the European average. The grid is owned by RTE, which is majority owned by EDF. 

• Sweden

 Since 2011, Sweden has had four electricity pricing zones reflecting the geographic reality that it has abundant renewables in the north. Sweden’s reform was possible because the transmission backbone is publicly owned and operated by Svenska kraftnät. The state controls the grid. The state decides how congestion is managed. Sweden has accepted that businesses should be encouraged to set up closer to the sources of cheap energy with pricing signals. This process has not been without its challenges but Sweden is using cheap and sometimes negative energy prices to fuel its strong export economy. Sweden has some of the lowest energy poverty rates in the world at 3 percent. 

• Iceland

In Iceland, almost all electricity and heating are generated from geothermal and hydro - and the entire system is publicly owned, run by Landsvirkjun, the national power company. Profits flow to the state, not to shareholders, and Iceland’s cheap renewable power has underpinned its aluminium, tech and data-centre industries. Icelanders pay relatively low energy prices while the country remains a net exporter of clean energy expertise.

• Finland

Finland’s grid operator, Fingrid, is majority-owned by the Finnish state, and its major utilities are either municipally owned or publicly controlled. Finland’s control of its energy network has supported industrial competitiveness and innovation - Finland is now also a ‘heat pump superpower’ - 2.7 million homes in the country have them. Despite the very cold winter temperatures, household energy bills are below the EU average.

Regions and states in other countries have more control than Scotland!

• Australian states also have much more control over energy policy and pricing - that means they can try new approaches. The New Scientist reported last month that:

“South Australia is proving to the world that relying largely on wind and solar energy with battery back-up is incredibly cheap, with electricity prices tumbling by 30 per cent in a year and sometimes going negative”.

• US states also have much more control over energy than Scotland. The state of Texas gets about 25 per cent of its energy from wind power, more than any other US state. Listen to this podcast to see how they took a different approach to building the grid as infrastructure that enabled small energy developers to connect wind farms. 

Conclusion

It is tragic to see Scotland once again being held back by Westminster’s failed policies. While the UK has handed Scotland’s resources on a plate to international business bent on drawing a profit from the people, other countries are seizing the moment.

Scotland's hands are tied. Under the current devolution settlement, energy policy, investment and infrastructure are held in London. While the privatised model that was forced on Scotland leaks money outward through dividends, other countries reinvest inward, building stronger grids, cleaner generation and skilled domestic workforces.

An independent Scotland could do the same. A publicly-owned Scottish energy company - working alongside local authorities, cooperatives and community generators - could ensure that the profits from Scotland’s vast renewable wealth stay here. Instead of hundreds of millions leaving each year in dividends to other countries, that money could lower bills, fund innovation, and train the next generation of Scottish engineers.

Scotland needs independence to get the power it needs over its energy resources, to build strong, prosperous and resilient communities.