Three Reasons Westminster's Energy Strategy Doesn’t Work for Scotland
The UK Government announced a new energy strategy this week. This concentrates investment in nuclear power. Scots householders will have to pay for that - but Scotland doesn’t need it. The country has more than enough renewables for all its electricity needs and more.
Instead, Scotland urgently needs a transformation of the UK's electricity transmission system which does not serve Scotland's needs. It also needs more investment in energy efficiency and demand reduction
Here are the three key reasons Westminsters energy strategy doesn't work for Scotland.
1 The UK’s privatised national grid system does not serve Scotland well
Many people assume that the UK’s energy grid is a publicly-owned asset, managed by the UK Government. It is not. It was privatised in 1980, under Margaret Thatcher.
National Grid Transco PLC is a London-based company that operates in the UK and US. It is enormously profitable. It employees 12,000 people worldwide and made £15 billion in revenue last year. It recently sold a majority stake in the UK's gas transmission and metering business for £2 billion to a consortium led by Macquarie Group. National Grid said this move was part of its transition to low-carbon and that it would:
"Enable National Grid to maintain a strong balance sheet with its strong investment grade credit rating, supporting its sustainable dividend policy".
Last week, the UK Government announced plans to buy back the part of National Grid Transco PLC that oversees the UK’s electricity systems which it also builds and operates. The Government is not disclosing how much it is paying for this partial renationalisation, which attracted little news coverage.
National Grid Transco PLC owns and manages the grid infrastructure in England and Wales. It also manages the transmission system in Scotland - although the ownership lies with Scottish Power and SSE, a situation which appears to make investment in the Scottish grid less attractive. Scottish energy companies are charged ten times what English companies have to pay to connect to the grid.
Shortly after the Scottish Government licensed a huge amount of offshore wind earlier this year, National Grid said it had no plans to connect most of this to the grid for at least a decade.
SEC’s energy briefing reported:
“The recent ScotWind auction of 25GW of Scottish offshore wind potential - enough wind energy to power the equivalent of 23 million homes per year - demonstrates the risk (from the grid). Within weeks of the auction being announced, National Grid/ESO declared it did not plan to connect more than 10GW of the successful projects. This left billions of pounds of investment and clean energy potential hanging in the wind.”
National Grid also makes profit from building and managing connectors that link the UK network to Europe. The way the UK mitigates against demand surges or supply shortfalls is to buy electricity at the spot price on the open market.
SSE commissioned independent research which found storing renewable energy in hydro facilities for when it is needed, could save UK bill-payers £690 million a year by 2050. But, like the other facilities that have been granted planning permission by the Scottish Government, it is unlikely to be built because of the lack of a market framework. SSE stated:
“The study, by Imperial’s researchers, found that 75% of the savings to the energy system from projects like Coire Glas would be from the avoided capital expenditure in higher cost electricity generation technologies that would otherwise be needed to meet the UK’s target of carbon neutrality by 2050 whilst meeting security of supply. “Importantly, the report highlighted that despite all of the benefits which new pumped hydro storage projects would bring, the current policy and market framework is unlikely to bring forward investment in many new projects because the long duration and low carbon capability of pumped hydro storage is not sufficiently valued.”
2 The strategy pours billions into nuclear power - while making unrealistic claims about what that will achieve.
The money that is invested in nuclear will come from energy consumers. It is predicted that consumers across the UK including Scotland will have to shell out £80 a year through their bills for this. The strategy document says the UK has: “committed to provide up to £1.7 billion of direct government funding to enable one nuclear project to FID (final investment decision) this Parliament.” It proposes up to 8 new nuclear reactors - which will cost a total of £13 billion.
Unlike renewables, the cost of nuclear power is rising. When completed, Hinkley Point C will be one of the most expensive power stations in the world. The fuel it generates will cost £90 per MWh. The UK’s existing nuclear power costs £45 per MWh.
Writing in Advanced Science News recently, global expert Professor MV Ramanda wrote: “Although often blamed on public opposition, especially resulting from the devastating accidents at Chernobyl and Fukushima, the main cause for the drop in nuclear power’s importance has been the steadily rising cost of nuclear reactors and the almost invariable tendency for project construction costs and time to escalate dramatically.”
The UK Government also plans to invest £120 million on smaller reactors. Professor Ramana wrote:
“Private industry is not going to take the risk of paying for production lines and buying large numbers of reactors that could well prove uneconomic. So, it will be public money, as it nearly always has been the case with nuclear power, that will be risked.”
The UK Gov strategy, however, ignores current science and harks back to a 1950s vision of nuclear power. However, It does not mention that in 1957, a fire at Windscale nuclear plant spread radioactive material throughout Europe. The UK Government still spends £3 billion a year keeping this site, now known as Sellafield, safe.
3 There is no well-funded commitment to improving energy efficiency and insulating homes in the strategy
A large-scale energy efficiently drive would benefit consumers struggling with energy and cost of living crises. But instead of new measures, the strategy repackages existing schemes. It also relies on householders borrowing money to insulate their homes.
The strategy voices the UK Government's faith in the free market:
“This is not being imposed on people and is a gradual transition following the grain of behaviour. The British people are no-nonsense pragmatists who can make decisions based on the information.”
The SEC Energy Strategy Briefing concluded:
“The UK’s net-zero 2050 target as already looking under pressure. Without more incentives to consumers and business to reduce demand for energy…that target looks further away than ever.”
Like the UK, Scotland has some of the least energy-efficient homes in Europe. Much of rural Scotland doesn’t have access to the gas network - and electricity is priced in a way that makes their bills far higher than the average. They also have to pay higher standing charges than most of England.
Scotland does not share the UK Government’s nuclear vision. But Scots will still have to pay for it - and the Scottish Government is deprived of the decision-making power to invest in the energy priorities that the Scottish people choose. In short, energy bills will be cheaper in an independent Scotland and the energy sector far more environmentally friendly.