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The Herald Scotland
01-05-2025
- Business
- The Herald Scotland
There's no need for energy bills to be so high. We need zonal pricing
In Scotland where most of the electricity is generated by renewables there is no need for us to be charged at the cost of using gas, especially when our energy requirements can be over 50% more because of the cold weather. The constant reference to constraint payments is a red herring as it is assessed as being likely to be 'only' £1.8bn in 2025 according to the National Energy System Operator (NESO) and the vast majority of constraint costs (76%) relate to gas generators, which are typically paid to increase output at certain times and replace constrained generation from other sources to ensure demand is met. The biggest driver of constraint cost variation is the wholesale price of electricity – not because wind farms are paid more to turn down, but because gas generators are paid more to turn up when prices are high. Because the wind-generated electricity is governed by the strike price there will be no loss of income for the wind turbine operators and even if the strike price is increased by £20 per MWh at the next round of government auctions for new wind farms as suggested, wind-generated electricity will still be half the cost of gas-generated electricity. The suggestion that the South of England will need to pay more is also misleading as they like other areas already pay for their electricity at gas generation costs and any change should be minimal and certainly nowhere near the 66% more currently paid in the North of Scotland for their higher energy use. Scotland should be paying a more realistic price for electricity and this would lead to more energy-intensive companies locating here, more households changing to air-sourced heat pumps because they would be cheaper than gas to run and more people changing to electric vehicles, all of which would use a lot of the excess electricity generated in Scotland until the national grid is upgraded. The only section which would lose out would be the wholesale energy companies, no doubt comprising most of the 55 energy companies, which would lose some of their excess unearned profit and the UK Government which would lose tax from the windfall profits which it doesn't use to help those in Scotland who use more energy. Europe's association of power grid operators (ENTSO-E) has recommended that Germany, which has a single large power market zone with a unified price including Luxembourg, should be split into at least two zones to stop high prices in one region bleeding across the entire country. Iain McIntyre, Sauchie. Read more letters Buy back the National Grid Norman McNab's letter (April 28) gave a very good summary of the present sad state of our electricity industry resulting from privatisation in 1990. The government (both UK and Scottish) targets to reduce CO2 emissions in the energy sector are failing and the long-term aims are unlikely to be achieved. This is in spite of the fact that oil and gas are heavily taxed and electricity is taxed at 21% which amounts to approximately £21 billion being paid to the Treasury each year. All these taxes are paid by consumers and with energy prices increasing each year the tax take by the Treasury will increase. The electricity grid is a key part of the electricity supply industry and Mr McNab suggests it is 'very unlikely we could ever afford to buy it back again". This a reasonable assessment but I believe that where there is a will there is a way. One way would be to use the approximate £21 billion tax, or part of it over say five years, to buy back the electricity part of the National Grid Co. This is a way to use consumers' money to buy back what they should own in the first place. A further step could be taken by the Government to build and own all new generating plants using government borrowing. This infrastructure investment should be ring-fenced in the Treasury and the borrowing repaid from a proportion of the price of electricity, not from taxation. These issues could be resolved satisfactorily if government were open to new ideas and not locked in to rigid policies. Charles Scott, Edinburgh. Rethink the River City axe Steve Barnet (Letters, April 30) is perfectly correct in his comments regarding news reporting on the BBC, but I would suggest that he is scraping the top of the iceberg regarding the BBC's saturation coverage about what is happening in England, sometimes including items of trivia, while all too often ignoring or distorting what is happening in the other nations of the UK. On Tuesday I watched an episode of River City and thought the acting of all the cast throughout a distressing and harrowing episode, especially the performances of the young actors and actresses, was superb. All credit to them, and all shame on the BBC for wielding the axe on River City. Scotland cannot afford to lose such talent; the BBC should think again. Ruth Marr, Stirling. A scene from River City (Image: BBC Scotland) Sorry, what did you say? I once said to my wife: "Your hearing is getting very dull." She replied: "I know: I'm going to the jeweller to get it seen to." The jeweller will fix your hearing ?" "Not my hearing, my earring, you deaf old bat." But it's not just us oldies. My son asked his wife to pick up some artesian water. On her return she said: "I couldn't find any Cartesian water." Just think: if old Descartes had been a supplier of water he might famously have said "I drink, therefore I am", though I had a boozy old relative who would just as famously have said "I am, therefore I drink." These mishearings are terribly widespread. During one lively debate about doctors one lady said: "OK, doctors can make mistakes like the rest of us – but can't do wrong deliberately. They have to swear that they will 'First do no harm'. I think it's called the Hypocritical Oath." Well, there's a comfort. Donald M Manson, Prestwick.
The Herald Scotland
28-04-2025
- Business
- The Herald Scotland
We will pay a heavy price for messing up the national grid
The result: a bewildering confusion of complex regulatory measures, inter-business contractual arrangements, short and long-term energy bidding, Contracts for Difference and system planning by politicians instead of independent engineering experts. All create Byzantine complexity, plus rich pickings for lawyers, accountants and speculative investors. It is very bad for consumers. It has also resulted in the death of the UK's electrical engineering industry employment, as the new owners procure plant from outside the UK. With the necessary requirement to eliminate CO2 emissions and rely on remote, weak, intermittent generation resources and energy storage, all financed by private capital, the system complexity and supply insecurity has increased, as have costs for consumers. All three will continue increasing. Not only will the populace have to endure increasing energy costs, they will have to suffer the psychological consequences of the associated landscape destruction and the increased chance of blackouts, rolling load-shedding and/or voltage reduction. Sadly, the UK national grid "silver tea set" was sold and it is very unlikely we could ever afford to buy it back again. Norman McNab, Killearn. Read more letters Go local with our democracy I note with interest your front page lead story on Friday ("Angry, anxious Scots say no to 'strong man' politics", The Herald, April 25) and thank you and the Electoral Reform Society for summarising and quantifying what many Scots feel. Every year our council leader, senior members of their team and the supporting civil servants do a round of the six wards that make up North Ayrshire Council. The objective is to share good news from the past year and plans for the future. That it is a good thing. The bigger objective is to highlight the inevitable large funding gap for the next year's council budget. Apart from agreeing how tough it must be, the ward audience can offer no meaningful suggestions on how to manage this six-ward council budget. What better way to 'bringing power closer to our communities' than by identifying the council budget at the ward level, by population to start with? Show local people how money is being spent in their name, in their ward, as a first step. Then create structures that empower them to decide how 'local' priorities are set and money spent to deliver them. Arran is the only one-ward island in Scotland and an excellent place to start this experiment. We have a locally developed and managed Island Plan, supported by the local and national government. Participatory budgeting and an active community council: all the ingredients to create a ward or island assembly are there. This would establish local priorities and the budget to deliver them. This goes a long way to making sure that as your report says, 'what comes next must ensure decisions are made closer to the people they affect'. It does not have to happen all at once, but "Scotland in Miniature" could offer a model to engage the 'unheard and disempowered'. In any event, it is worth a try. Tom Tracey, Brodick. • I note with interest the Electoral Reform Society survey. Consider the last nine months since the new Labour Government came to power with promise of change and all the pledges from the party north of the Border that it would defend Scotland at Westminster. To date there is no evidence of that to report; however it can be noted that Scottish Labour MPs have fallen into line behind the PM and Chancellor who are going after the vulnerable and pensioners. A new Labour Government continuing the cost of living crisis with increases in energy costs, increases in employers, National Insurance and austerity cuts; is it any wonder the general public are disillusioned and angry? Catriona C Clark, Falkirk. Why does even Iceland do better? In questioning why support for Scottish independence has remained high (and in fact is now apparently growing again), Michael Sheridan (Letters, April 23) conveniently ignores the fact that since 2014 Scotland has been taken out of the European Union by Westminster and, in spite of claims to the contrary, our oil and gas resources have not run out (in fact we now have considerably greater access to our vast energy resources, although regrettably this is not reflected in the UK pricing mechanism). In the meantime, the United Kingdom has become increasingly broken – democratically, economically and socially. In addressing Mr Sheridan's rhetorical questions I would pose some questions of my own that would dispose entirely of his arguments that Vladimir Putin would wish for Scotland to achieve independence in a new constitutional referendum. Would Mr Putin wish the UK to remain isolated from Europe or prefer an independent Scotland to further strengthen and possibly embolden the European Union? The United Kingdom did not substantially honour its commitment to Ukraine under the Budapest Memorandum (1994) when Russia invaded Crimea (2014) and in failing, along with the United States, to take significant action proved not to be a 'last bastion' of support. Would Mr Putin have real cause to think that the UK would act differently in future, unless the United Kingdom itself was to fundamentally change? Flying kites is a diversionary pastime but if we wish to seriously debate Scotland's constitutional future we should perhaps first consider why other small countries, and even relatively tiny Iceland, can make better progress in advancing the wishes and aspirations of their peoples than a country manipulated for the benefit of the British Establishment by a Westminster Parliament out of touch with the wishes and aspirations of the people of Scotland. Stan Grodynski, Longniddry. This is not independence Why do those who write in support of Scotland leaving the UK and joining instead the EU persist in trying to pull the wool over our eyes by misidentifying that as gaining 'independence"? In reality it would involve our sovereignty passing from Westminster to Brussels, so where is the independence in that? To clarify its intentions, a step in the right direction for the SNP would be for it to rename itself as the STP (Sovereignty Transfer Party), but I won't be holding my breath. I was an enthusiastic supporter of the original concept of the European Common Market, but not the ever-closer political union which some empire builders seem determined it must become. Alan Fitzpatrick, Dunlop. Jamie Greene (Image: Scottish Parliament) A task for Jamie Greene Jamie Greene's recent defection to the Lib Dems, while retaining his role as the deputy convener of the Public Audit Committee, will perhaps help to focus the parliament on some of the bread and butter matters fixable without major legislative changes. To mention but two of these matters: public money paying for paracetamol prescriptions is not value for money and is fixable, and burdening small businesses in Business Improvement Districts (BID) with taxes above 4% of their non-domestic rate is fixable. Lib Dem compatriots south of the Border will be aware of English BID guideline limits, resulting in most levies being 1%-2.5% of non-domestic rate. In Scotland it is limitless. And levies can go wild. In Alloa town centre, the majority of businesses pay the highest BID levies in Scotland. There is no opt-out, so a tiny unit can be charged as much as 300%. And as a local tax it has to be paid. With oversight of the Public Audit Committee, as well as influence on the Government's programme, there is a glimmer of hope that this political switch by Jamie Greene will help to resolve some real bread and butter issues. Daphne Hamilton, Alloa.
