Tuesday, 31 July 2018

New report: How Scotland’s new energy company could revive renewable energy in Scotland

New report:  How Scotland’s new energy company could revive renewable energy in Scotland
In a new report published by Nuclear Free Local Authorities, Dr David Toke of the University of Aberdeen argues that the best business strategy for the Scottish Government’s proposed Energy Company will be to enable new renewable energy schemes to be established. To do this, the Scottish Government needs to offer long term guarantees of minimum electricity prices for electricity from new renewable energy schemes.
Dr Toke said “The Scottish Government has a great opportunity to become the UK leader in the supply of green energy. It can achieve this if its proposed Energy Company is able to offer long term power purchase agreements for new onshore wind and solar projects. But if the SG’s new Energy Company relies on the common practice of electricity companies of sourcing renewable energy from projects that have already been established on the back of Westminster based incentives then it will fail to impress – and also miss out on a great opportunity to steal a march on its energy supply competitors. The Scottish Government needs to offer guaranteed long term pries for electricity generated from new renewable energy schemes”
Executive summary
The Scottish Government’s commitment to start an energy company could re-energise renewable energy in Scotland and deliver electricity at competitive prices for the consumer. The key objective for a new Scottish Energy Company (SEC) must be, in marketing terms, to demonstrate how it can offer a superior product compared to its competitors at a price that is no higher than that offered by its competitors. The SEC could out-sell rival competitors by giving long term power purchase agreements to new renewable energy schemes. This will achieve a ‘quality’ selling point that will be unmatched by other electricity suppliers. Although various electricity suppliers boast that their supplies come from renewable energy, usually they only offer PPAs to renewable energy schemes that have been given support on Westminster incentive schemes, the Renewables Obligation and feed-in tariff - and which thus already exist.  The Energy Company initiative should be backed by activities of the Scottish National Investment Bank to offer loans to new renewable energy projects. There are a number of potential renewable energy projects that can be implemented for prices at or below recent levels in wholesale power prices meaning that the Scottish Energy Company could give PPAs to such companies and deliver electricity to consumers at the same or lower prices than other electricity suppliers.


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