Energy bills: Why does Scotland pay more than England?

At last week’s PMQs, SNP Westminster leader Stephen Flynn called on Rishi Sunak to reduce the price of energy bills with profits for companies at record highs.

“What they’re saying is they intend to raid the pockets of ordinary Scots, while lining the pockets of Westminster," Flynn said.

Since then Ofgem has reduced the price cap but energy bills are still expected to rise. 

The National has spoken with Beth Howell from Eco Experts – a group which helps homeowners find environmentally-friendly solutions to soaring bills – on how Scotland gets its energy, why it pays more than it should and how Scottish independence can be the solution to the problem.

Why does Scotland pay more for its electricity?

“I don’t think there’s one specific reason, I think it boils down to multiple different ones. A key part of this though is the UK’s outdated energy market”, Howell explained.

The model is still determined by the most expensive generator -  electricity produced by burning gas.

This means that despite Scotland being an energy-rich nation, and holding huge potential in renewable, it is beholden to the UK’s energy model.

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Towards the end of 2022, it was revealed that Scotland had generated a record amount of renewable electricity.

A total of 7358 gigawatt-hours was produced in April, May and June of last year – a 36% increase from the same period in 2021.

Transmission charges

In spite of Scotland holding such extraordinary levels of renewable energy, the country still gets the raw end of the deal.

During the leadership race between Rishi Sunak and Liz Truss last year, the pair were told to fix the “rip-off” charges being foisted on the renewables sector.

For a Scots energy company to connect to the grid, it would cost £7.36 per megawatt-hour (MWh) in the north of Scotland and £4.70 per MWh in the south, in the Scottish Borders and Dumfries and Galloway. 

By contrast, connecting to the grid in England and Wales costs just £0.49 per MWh.

Figures provided by the House of Commons library in 2021 previously showed the electricity network in Scotland accounts for almost 52% of the total network across the UK. 

As Professor Paul de Leeuw from Robert Gordon University (RGU) told The National: “It’s worth pointing out the old world and the new. The old world is what we tend to do where power generation is based in areas of dense population.

“The further away you are, the more transmission and cost you have to get there. The new system is very different because we will have wind generation and lots of things away from the dense areas of population.

“Our network system is not yet designed for new energy.”

A UK Government review is currently underway on how to transform the energy market in a bid to “stop volatile gas prices” and to set the price of electricity based on renewables.

It says the plan is to deliver a “clean and secure electricity system by 2035.”

Does Scotland pay more than England?

Statistics regularly show that Scotland has higher average energy bills than those living in England despite being such an energy-rich nation.

Last June, amid the cost of living crisis, the average bill was £1651 per year compared to £1554 for people in England.

In Wales meanwhile, the average was £1525.

What are the key factors at play?

Howell explains that there are two key factors that make Scotland more vulnerable to soaring energy costs.

She said: “One of these is location. The number of customers an energy company has in any given area obviously varies.”

Howell added that some areas of the country, such as major cities, are cheaper compared to somewhere like Shetland.

“Because an area is more isolated or densely populated, then companies can ramp up the prices," she said. 

In August 2022, for example, a report warned Shetlanders that energy costs could rise as high as £10,000 per year by April.

Shetland is one area of the country which has to pay higher for its energy bills

Although energy bills have been exacerbated by the cost-of-living crisis and the war in Ukraine, it’s a problem that has been facing Scots, particularly those in rural areas, for some time.

For example, a report released by Scotland’s Rural Fuel Poverty Task Force in 2015 showed the average energy bill in Skye and Lochalsh was £2218 per year compared to £960 per year for the rest of Scotland.

One factor which Howell admits it is hard to control is weather, because, in regions where it gets much colder, customers tend to use more electricity to heat their homes.

Would Scotland being an independent country solve the issue?

Should Scotland gain its independence from Westminster, it would retain full control over its energy sector, something which Howell believes would go a long way in fixing rising costs.

“Scotland is leading the way in renewables. They’re the future, there’s only a certain amount of fossil fuels left and they’re getting more expensive because despite creating all this cheap energy, everything is still based on the price of gas”, she said.

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“If Scotland does step away from the UK, I think it would benefit but I’m obviously not sure how soon that will happen.

“It would allow them to create their own energy system and a way of working so that renewables can set the price.”