The Great British Rip-off

Scotland Subsidises the UK's Energy 

Unionists always tell us that we are better together, not least  because they claim Scotland could not manage without  generous  subsidies  from  England. This myth is widely believed, including by some Scots.  This paper highlights just one example of how we are disadvantaged by being under London control.

Scottish generators (e.g., SSE, but many other companies too) pay the highest rates to connect to their 'national’ grid than anywhere in Europe as new figures from the National Grid show how reliant the UK Government is on Scottish fees. Figures provided from the House of Commons library last year showed that the electricity network in Scotland accounts for almost 52% of the total network in the UK with 9300 kilometres in Scotland and 8700km in England and Wales.

However, for an energy company to connect to the grid, it will cost:

         £7.36 per megawatt-hour (MWh) in the north of Scotland

         £4.70 per MWh in the south of Scotland transmission area.

The same action in England and Wales costs £0.49, and in southern England generators are actually paid to connect to the grid.

The system for these charges was devised for England and Wales in 1992 following the privatisation of the National Grid and extended to Scotland in 2005. The charges were designed to encourage generators to build close to consumers as the fee rises when less energy is consumed close to generation, meaning that renewable energy projects like onshore and offshore windfarms in Scotland built miles from any residents will have to pay more to connect their energy to the grid.

This system penalises the generators currently connected in the north of Scotland and is contrary to UK government policy encouraging and supporting renewable energy growth.

Energy is a reserved matter, meaning that the Scottish Government has no power to make any changes and must rely on decisions made by the UK Government. The antiquated methodology indicates that by 2026/27, annual charges on the two Scottish networks* will amount to more than £465m while those on the National Grid in England and Wales will receive a subsidy of more than £30m.

In January 2022 when this issue was raised in the House of Commons, Tory Energy Minister Greg Hands refused to take action to deliver fairness in the system because revenues from Scottish generators are too valuable to Westminster as they subsidise England and the entire National Grid.

Andrew Fraser
20/01/23

*Scottish Power Energy Networks in the south;  SSEN Transmissions in the north.

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