A PUBLICLY owned energy company as proposed by the Scottish Government presents significant opportunities to show leadership in developing renewable and low-carbon energy supplies, as well as tackling climate change and other environmental issues, according to a new report.

Powering Our Ambitions, from the Common Weal think tank, also suggested the new company could address the need to provide low-cost, low or zero-carbon energy to Scotland’s fuel poor and other vulnerable householders.

Their report looks at the role of a Scottish National Energy Company (NEC) and sets out the case for a Scottish Energy Development Agency (SEDA).

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Report authors – Dr Keith Baker, Gordon Morgan, Dr Ron Mould and Iain Wright – warn that it would be a “serious missed opportunity” if the NEC was simply seen as a publicly owned energy supply company, which would have “limited opportunities” to tackle such problems and only a “slight effect” in lowering retail fuel costs.

The National:

They also want a SEDA to be set up as a commercial entity alongside the NEC, which would be regulated by Ofgem until a Scottish regulator was established.

“This dual approach should largely mirror the successful approach adopted by the Danish Energy Agency,” they said.

“The NEC should be established as both an energy supplier and, more importantly, as a developer and manager of energy generation, distribution and fuel supply assets.”

It would not replace Scottish Hydro-Electric Power Distribution (SHEPD) and Scottish Power Energy Networks (SPEN) as distribution network operators (DNOs), or distribution systems operators (DSOs), but the authors highlighted the benefits to be gained from the NEC “being directly involved in the development and management of new heat networks and microgrids”.

There was, however, potential for the NEC to become a single nationalised DNO/DSO as it developed, or until Scotland secured full devolution of energy powers or achieved independence.

The authors said research funding should be co-ordinated by the SEDA, along with funds associated with strategic planning and overcoming the rural-urban fuel divide. The company would also prioritise the training of technology experts in district heating technologies to enable wider social and economic value by identifying projects that may offer poor returns, “but would deliver indirect benefits (co-benefits) to the economy, society, and the environment”.

They said: “Therefore, the assessment and justification for public investment in the NEC should not be limited purely to measures of direct benefits and commercial success but should, as in the development of hydrogen and wave power projects in Orkney, be seen as a catalyst and test bed for future commercial projects.”

A fundamental aim of the NEC should be the strategic development and delivery of new zero or low-carbon energy supplies to the fuel-poor or otherwise vulnerable households, and to rural, remote and disadvantaged communities.

This would bring the development of local, sustainable fuel supply chains – which included solar, wind, solar thermal, geothermal, suitable biomass and hydro – into the NEC’s remit.

The authors suggested that the new company should seek to enable, “rather than compete with”, other non-profit and community-controlled energy companies. They added: “But the Scottish Government should, with urgency, look at the assets and infrastructure of the recently closed down Our Power business to see if these might be purchased or acquired to form some of the necessary infrastructure of the NEC.”

Founding the NEC would also open up an avenue for developing a public National Energy Service similar to – and integrated with – the NHS and other public services, to allow data sharing and to enable all bodies to better meet the support needs of fuel-poor or vulnerable householders.

It would also allow the ramping up of the development of community and household-scale renewable and low-carbon technologies which have so far been significantly under-utilised as part of the Scottish Government’s strategies.

The National:

Craig Dalzell, Common Weal head of policy, said: “Scotland stands on the brink of a renewables revolution that will dwarf anything that could be gained from the remaining extractable oil assets. Scotland is well placed to lead the world to a carbon neutral future. But to do this it must harness its own energy potential and begin the transformations required. This cannot be left to ‘the market’.

“Common Weal’s new policy paper ... shows how a national energy company and an energy development agency can transform the energy sector from root to branch in order to secure that future as well ensuring that the words ‘fuel poverty’ are forever banished from Scotland.”