Good evening! This week's edition of the In Common newsletter comes from Gordon Morgan, a member of the Common Weal Energy Working Group. To receive the newsletter direct to your inbox every week click here.

THIS week, Keir Starmer promised to deliver 100 per cent clean power across Great Britain by 2030. Whilst such ambition may be welcome, it will be practically impossible without massive intervention and a major shift in political thinking.

The existing target of decarbonising electricity by 2035 is proving extremely difficult – with more than £200 billion of clean energy projects awaiting grid connection and connection dates often five to 10 years in the future.

The electricity grid has had little investment for 30 years and requires rebuilding to meet the requirements of renewable generation – and an initial tripling of electricity generation for the needs of transport and heat. This is essential to reach net zero. Renewable electricity from new generators cannot reach customers without the grid connection.

The new electricity grid must be built almost from scratch. A detailed plan shows this taking seven years and costing around £60bn.

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The key design, the Strategic Spatial Energy Plan, must be agreed by both Scottish and UK Governments by the middle of next year. Planning consents are required and legislation to amend Scottish planning laws to streamline the process is needed. An expanded electricity grid workforce needs trained and the actual construction is expected to start in around four years. The Scottish Government must ensure it is represented on the key decision-making bodies.

Scotland supplied England with 15,900 GWh of mostly clean energy in 2023, around 5% of England and Wales total electricity consumption. This was roughly equivalent to the electricity produced by our operational off-shore wind-farms, which produce 3GW per hour.

Scotland’s future off-shore wind in construction or early planning is a further 32GW per hour. Much of this is destined for export to England once a new National Grid is completely built in the early 2030s. However, the electricity supply in Scotland will be carbon-free well in advance of this. Until the cables are laid, England will still require gas much of the time.

How will electricity be charged across the UK?

At present a single “spot price” is set each hour for all electricity traded through the National Grid.

Even when most electricity is generated from wind or solar, if this is insufficient for total demand, gas power stations must be switched on.

If gas costs more, all electricity is bought at its higher price for that hour. So, the price of gas sets the “spot price” for the whole UK.

However, the electricity produced in Scotland, which is almost all renewable energy, will generally cost less than this “spot price”. Scottish customers are nevertheless charged the higher UK-wide price!

Scotland also pays higher standing charges than the rest of Great Britain. These charges supposedly cover the cost of connecting to the grid. Between January and March 2024, whilst a price cap was in place, Scottish households paid £43 per annum more than London.

Both the “spot price” and connection charges disadvantage Scotland and ignore the fact we produce more electricity than we need for industry and household consumption.

The UK Government has consulted on an alternative approach whereby the “spot price” is set more locally in zones, which would correspond to the regional network operators. Scotland would be split into north and south, equivalent to the old Hydro and Southern Scottish boards.

Setting the price more locally would mean each of the 14 zones across Great Britain would set the price based on their local generator cost.

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As renewables, whether from wind or solar, are now cheaper than gas, we would expect the “spot price” in Scotland to be consistently lower than in most other zones. This lower cost would be passed to customers.

Electricity surplus to the needs in the local zone would be sold to other zones throughout Britain. On occasions when wind didn’t blow, Scotland could import electricity, paying the relevant higher price.

Analysis indicates every zone in Britain would benefit from lower prices if zonal pricing were introduced. London, however, would gain least, estimated around £10 per household per annum. Scotland would be amongst the higher gainers.

Estimates show North Scotland gaining £140 and South Scotland over £50 per household per annum.

The suggestion is that this change could be implemented long before 2035, possibly by 2027. It is one of the few methods to stop the price of gas dictating the price of electricity.

It seems to have favour from Ofgem and Scottish civil servants – and presumably the Scottish Government.

The only people who may oppose the change are London-based MPs who may dislike Scotland getting cheaper electricity than London.

This is a key question for Scottish Labour in the election. Will they back the move to zonal pricing and cheaper electricity in Scotland?