Scotland Needs a Public Energy Sector

A contentious issue within Scottish society, and indeed the greater world, that affects millions of people across this country, is energy. Right now Scottish energy supply is maintained in large by the 'big six' energy companies: British Gas, N Power, EON, EDF Energy, Scottish Power, and Scottish Hydro. The British media and political establishment devotes much gesticulation towards explaining how well these big six companies are benefiting the economy, and are the only way forward for the energy sector. The reality however, could not be further from the truth.

Anyone who has first hand experience with these companies will know they are nothing but profiteers that want nothing but to squeeze every penny out of the ordinary family they can. Within the past six years, energy prices have doubled. This is whilst one million families across Scotland are now living in fuel poverty. The Westminster government has valiantly attempted to fix fuel poverty; their method however is not what you would think. They essentially redefined what it is to be in fuel poverty, therefore lifting 800'000 people across Britain out of fuel poverty overnight; what a result eh! In real terms though, many people across Scotland are still living in fuel poverty and struggling to make ends meet with the average yearly bill being £1'315; 10% of some people's wages.It does not have to be like this at all. 

Scotland has an abundance of renewable energy potential.

Scotland is one of the most energy-rich nations in Europe. We have 90% of the UK's oil and gas reserves. The wholesale value of these North Sea reserves stands at an estimated £1.5 trillion. 25% of Europe's wind and tidal energy potential, and 10% of Europe's wave power potential. Currently, Scotland meets 40.3% of its energy needs from renewables, and is currently on track to meet 100% of its energy needs from renewables by 2020. It will be bewildering to many that a million families across Scotland are living in fuel poverty amidst swathes of abundance and potential in energy.

The problem lies not in our ability to produce the energy, it lies in how it is maintained, owned, and distributed. Studying economics myself, it is fact that sectors such as energy, which is vital infrastructure, are best run as a monopoly. This is due to the nature of the industry, it would be inefficient for the sector to consist of hundreds of small firms competing, it would lead to much duplication of resources leading to waste as many firms operate different networks that wouldn't link up efficiently. This would mean the traditional model of supply/demand in a free market would be offset as the equilibrium price for consumers would be much higher due to firms wasting capital and labour on unnecessary duplications in the market.

Since the free-market approach doesn't work. The next step would be to establish monopolistic competition, i.e. a few firms competing and offering slightly different services in order to attract customers. From how the current British energy market operates, it can clearly be seen that that approach too, does not work. Having just a few firms competing leads again to artificially inflated prices. Due to the inelasticity of demand of energy (it is an essential good, therefore people are not as flexible about how much they would be willing to pay for it), this lets the huge companies in control set high prices for no good reason.

Fuel poverty in modern Scotland. Affecting even our most vulnerable.

Right now, major energy companies are making record profits yet keep artificially inflating prices for no good reason. Although the British government is boasting tens of billions of investment in UK energy, don't expect the prices to come down anytime soon. Just like the rail industry, energy companies are being subsidised with billions in the hope that it will bring down prices. The exact opposite is happening however. Energy companies are pushing up prices year on year despite 'billions' in worth of investment, and no one is stopping them due to a toothless Ofgem offering no real opposition to their profiteering. It's subsidised corporate socialism for the big energy companies, and monopolistic price taking for the rest of us.

This is why Scotland, following independence, needs its own publicly-owned energy sector. With a publicly-owned energy sector, the government can operate the energy sector efficiently as a state monopoly, setting a price-ceiling on energy prices to make sure that we are paying the amount the energy costs to produce; not artificially inflated prices born out of greed.

 This would also allow the government to effectively invest in the sector. As instead of investment being dictated by how much money can be squeezed out of the ordinary family, it will be dictated instead by how much supply the country needs. Also, since a publicly-owned sector will not be driven by making a profit, it will be motivated to efficiently run in all ways. This will ensure maximum investment in the sector that will drive down costs for both the government and consumer.

Therefore in conclusion, it can be seen that Scotland would hugely benefit from a publicly owned energy sector. It would ensure families across Scotland would be protected from artificial energy price-hikes, driven by nothing but greed. It would ensure an efficiently run energy sector which would be driven to provide equitable energy distribution to the nation, instead of for profit. It would also ensure the much-needed investment into our energy sector. All this however cannot come about unless we in Scotland vote Yes in this year's referendum, to put control over our affairs into our hands.