13:06 Alan Brown (Kilmarnock and Loudoun) (SNP)

That leave be given to bring in a Bill to require the Government and Ofgem to conduct and act on a review of the electricity transmission grid and associated charges, to include consideration of abolishing charge differentials based on geographic location, incentivising renewable energy generation to maximise energy output, and minimising the passing on of charge fluctuation risk to consumers in the form of higher prices; and for connected purposes.

The driver behind this Bill is that Scotland currently has the highest grid charges in Europe. The Tory Government shrug their shoulders and say, “It’s nothing to do with us—it’s a matter for Ofgem.” However, they are the ones who set the rules for Ofgem to implement. What is the point of the Government bragging about a net zero target for 2050 and a plan to decarbonise the electricity grid by 2035 when they do not seem capable of seeing the bigger picture? While they probably do not care about Scotland having the highest grid charges—it fits their perception that Scotland is remote, so additional cost makes sense, and that anyway it is just us Scots whingeing again—the reality is that continuing as is jeopardises their own net zero plans as well as Scotland’s own targets. It makes a mockery of their levelling up agenda—which is, in reality, just about targeting the red wall seats of north England and the midlands. That agenda was confirmed last week by the disgraceful decision to class the Scottish carbon capture and storage cluster as a reserve.

The current grid charges system was introduced in 1992 following privatisation of the electricity market. Back then, it was based on the concept that electricity is generated from coal, gas, oil or large nuclear stations. With this embedded concept, the charging system is now still geared at incentivising power generation sites close to the centres of population—or, more accurately, the closer to London the better. It is utterly absurd that the UK Government have taken the welcome step to phase out coal-fired electricity generation but are retaining a grid charges system that is based on where to build coal-fired power stations. It is completely bonkers. The obvious strategy would be to consider what a future grid will look like, where are the best locations for the generation of clean renewable energy and what grid upgrades will be required to facilitate that, and then analyse the long-term costs of the grid upgrades and devise a fair system of charging to facilitate that. That is exactly what this Bill seeks to do.

Scottish offshore windfarms are now 20% more expensive than those in English waters. When the lowest price is winner takes all in the contracts for difference auctions, that becomes a major issue and puts investment in offshore renewable energy in Scotland at risk. It means less direct jobs and less supply chain work, and it potentially hampers a just transition for the oil and gas industry.

In terms of the best use of billpayers’ money when considering the future energy mix, we should not be spending billions of pounds on new nuclear. At £23 billion, Hinkley Point C is the most expensive power station in the world. Despite complete market failure in the nuclear sector, the UK Government still want to spend £20 billion- plus on Sizewell. Worse, these nuclear sites will get paid under the current regime to connect to the grid—more hidden subsidies for nuclear. Instead, investment should be committed to pumped storage hydro such as SSE’s Coire Glas and the Cruachan dam extension being planned by Drax. That creates renewable energy ready to be dispatched when required and at a fraction of the cost of nuclear. An Imperial College report suggests the system could save £700 million a year.

It is clear that change is required, with a rounded energy policy that maps out a route to net zero, a policy that incentivises renewable energy production where it is best suited, an end to Scotland having the highest locational grid charges in Europe and an end to the volatility of the system operational charges. This Bill seeks to do that. I hope that the UK Government see sense, but there is an alternative: Scotland having full control of its destiny.

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