EXCLUSIVE: Scottish energy industry back’s Scot-Govt plans for ‘Sturgeon Power’

Nicola Sturgeon’s ‘big policy idea’ for a Scot-Govt-owned Scottish Energy Company was announced in a fanfare of publicity at her party’s conference last month.

But while the Scottish First Minister’s plan was criticised by a largely hostile mainstream consumer media, the Scottish energy sector is supportive of the plan – as revealed in the detailed analysis of the consultation.

And Sturgeon only presented the idea as if it was her (or the SNP’s own work) after it was first given the thumbs-up by the Scottish energy industry in a consultation on the Scottish Energy Strategy: – 

Q: What are your views on the idea of a Government-owned energy company (GOEC, aka ‘Sturgeon Power’) to support the development of local energy?

Summary of main answers:

  • Many respondents identified a need for some form of public agency to support an energy transition.
  • A number of these supported a Government owned energy company (GOEC) for the development of local energy, although some others queried the need for a GOEC or suggested alternatives to a GOEC.
  • A small number of respondents queried the need for a GOEC and several suggested that a GOEC would detract from the existing range of initiatives and activities undertaken by other organisations.
  • A number of roles were identified for a GOEC; these included, the provision of finance to support community-ownership, shared ownership or the development of energy systems projects; as a supplier of last resort; or information provider.
  • The added value that a GOEC would bring includes the facilitation of community energy development on a long term basis, and with the use of Power Purchase Agreements (PPAs) to ensure long term planning as well as being of use in more remote locations.
  • It was suggested that a GOEC would operate efficiently, on a not-for-profit basis and allow for innovative energy systems. This would help to overcome some market barriers.
  • Some suggestions were made for alternative mechanisms; these included Energy Service Companies (ESCos), Government and Community-Owned Energy Companies (GCOECs) and Municipal Energy Companies (MECs).
Nicola Sturgeon. MSP
Nicola Sturgeon. MSP

There were some suggestions for a centralised energy agency along the lines of Denmark’s state Energy Agency.

Other benefits of ‘Sturgeon Power’:

A small number of respondents felt that a Scot-govt owned energy company would operate efficiently, keep energy prices down, and help to alleviate fuel poverty and help to increase consumer confidence.

Another benefit was that the ‘Sturgeon Power’ would operate on a not-for-profit basis and offer support at a social level, which is preferable to privately owned companies that exist primarily to make profits for external shareholders.

Some respondents also commented that this business model would mean that trust is built between communities and the Scottish Government, and where the focus can be on social and ecological benefits.

It was also felt that a GOEC would allow for innovative energy systems and projects, and act as a catalyst for new developments and accelerate the development of renewable heat technologies. It was suggested that a GOEC could support renewable energy by sourcing power from local energy providers.

The Scottish energy industry also supports plans for a Scottish renewable energy bond – although this is not surprising given that this is a request already articulated by the eponymous industry trade body.

“Many respondents, across all respondent groups, noted support for a Scottish Government Renewable Energy Bond, although some noted that the Bond should focus on a wider range of energy sectors and not just wind-power.

“Only a small number of respondents noted any opposition to the establishment of this Bond and these were mostly Individuals, with some scepticism over likely rates of return or a dislike of government bonds.”

There were 252 responses to the Scottish Energy Strategy consultation – 200 from organisations and 52 from individuals.

16 Nov 2017

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