02-06-2025
- Business
- The Herald Scotland
Energy can make or break the 2026 Holyrood elections
The Scottish Government has no influence over energy prices but can lay the blame at Westminster's door. Scottish Labour candidates will face the same nervousness as Labour candidates did in England's recent local elections. They may argue that the investment and new infrastructure will bring down bills eventually, but Ed Miliband's promise of cutting bills by £300 last summer will be a rod for every Labour candidate's back when knocking on doors.
Could zonal pricing and energy market reform, with Scottish bill payers positioned as major benefactors be a potential gamechanger? This is a big political decision for Mr Miliband as he looks at possibly the single biggest reform in energy policy, due in the coming weeks. However, the sector's opinion is divided, with most generators concerned about what it would mean for their investments.
The Scottish Government can – and is – sitting on the fence, backing market reform but maintaining it's not "yet" convinced that zonal pricing is right for investors. This is an easy position to take, knowing it's not its call and that whatever decision is taken, there will be no immediate impact on bills or jobs prior to the election.
We can't discount the potential success of Reform UK with its "end net zero" mantra, including the pledge to use newly-gained local planning powers across England to wage a "war" on developers. This will be appealing to those Scottish communities campaigning against the energy infrastructure that both the UK and Scottish governments agree is required to modernise our electricity grid and transition to renewables.
While Scotland remains less tempted by Reform, recent polls hint at 10-20 MSPs as the party gets an almost-guaranteed platform on the regional lists. This is not least thanks to defections from the Scottish Conservatives – also drifting towards an anti-net zero position – but also due to Labour's struggles. Reform's success could challenge the net zero consensus in Scotland more vociferously than ever before, with climate and energy at the fault line of division. But the jury is out on whether "net stupid zero" can convince the electorate and compete with the widespread recognition of the importance and investment potential of the renewables sector to the Scottish economy and future jobs.
With less than a year to the election, all but one thing is certain: energy policy will be a central point of contention and has the potential to flip the switch on the race by Bute House.
Matt Revett is Director (PA) at Grayling Communications
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