Scottish Government drops national energy company plans

By Peter A Walker

The Scottish Government has dropped plans to set up a state-owned energy company.

Four years after promising a state-backed company delivering low cost power, ministers are now focusing efforts on a “new dedicated national public energy agency” which is likely to be more of an advisory body.

Nicola Sturgeon told the Scottish National Party's 2017 conference that she would create a not-for-profit company which would buy its energy on the wholesale market or generate it in Scotland from renewable sources.

Earlier this summer, Scottish Green Party co-leader and now government minister Lorna Slater, criticised Sturgeon for not moving fast enough on the plan.

The First Minister admitted to MSPs in June that her government had “not done well enough” in generating energy and harnessing the economic benefits.

Net Zero Secretary Michael Matheson has confirmed in an answer to a parliamentary question from Ms Lennon that “work on a planned public energy company was halted during the pandemic”, adding that “ministers will now focus government efforts” on the new public energy agency.

He added: “This will coordinate and accelerate delivery of heat and energy efficiency work, inform and educate the public on the changes required, provide expert advice to national and local government, and work with public, private and third sector partners to deliver this transformative national project.”

The switch of plan emerged at the same time as yesterday's Programme for Government, which included several climate and energy-related policies.

Among them, the SNP committed to providing £1.8bn to make homes easier and greener to heat, investing an additional £500m to support green jobs of the future, and creating a £500m Just Transition Fund for the North East and Moray.

However, rather than a national energy company, a national public energy agency will “harness the potential of decarbonisation at scale and provide leadership”.

The programme states: “We will work to have a virtual agency established within the coming year and a dedicated physical agency by September 2025, with a remit to accelerate transformational change in how we heat and use energy in homes and buildings, aid public understanding and awareness, and coordinate delivery of investment.”

Scottish Labour’s Net Zero, Energy and Transport spokesperson Monica Lennon said: “This embarrassing downgrade lays bare the complete lack of ambition at the heart of this government.

“There is always a gulf between what the SNP promise and what they deliver, but even by their standards this is galling.

“A real public energy company has the potential to transform energy production in Scotland and drive forward the renewable revolution we urgently need - instead it seems we’re about to be landed with yet another toothless government body.

“The Greens and the SNP must drop these watered-down plans and commit to delivering the promised national energy company in full,” she added.

Net Zero Secretary Michael Matheson confirmed in an answer to a parliamentary question from Lennon that “work on a planned public energy company was halted during the pandemic”, adding that ministers will now focus their efforts on the new public energy agency.

He added: “This will coordinate and accelerate delivery of heat and energy efficiency work, inform and educate the public on the changes required, provide expert advice to national and local government, and work with public, private and third sector partners to deliver this transformative national project.”

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