Energy crisis cost Scottish economy £11bn, study finds

New figures show nan caller spike successful power prices costs Scotland’s system £11 billion, starring to renewed calls for nan state to extremity its “dependence connected world fossil fuels”.

A caller study by nan Energy & Climate Intelligence Unit (ECIU) calculated nan nonstop further costs faced by businesses, households and different “energy consumers” betwixt 2021 and 2024 arsenic a consequence of nan power crisis.

This saw wholesale state prices soar successful nan aftermath of Russia’s penetration of Ukraine, while nan value of roadworthy substance roseate owed to a spike successful lipid prices.

The study shows nan situation costs Scottish households an further £5.8 cardinal successful excess power costs, which nan ECIU said equates to astir £2,260 per household, aliases 70% of a emblematic Scot’s yearly walk connected nutrient and non-alcoholic drinks.

Those successful areas pinch nan lowest mean family incomes were besides recovered to person spent a greater proportionality of their income connected power connected excess power costs than group successful richer areas.

Industry faced further costs of £1.8 billion, pinch Glasgow (£800 million), Edinburgh (£740 million), nan Highlands and Islands (£560 million) and Aberdeen (£390 million) seeing nan biggest spikes.

Meanwhile nan commercial, cultivation and nationalist assemblage organisations had to sorb an other £2.6 billion.

The remaining £0.8 cardinal related to non-domestic roadworthy fuels.

The ECIU said nan findings expose Scotland’s “deep vulnerability to world lipid and state markets”, adding that galore energy-intensive industries proceed to look precocious business power costs.

It pointed to a caller study showing nan UK has immoderate of nan highest power costs successful Europe, mostly because of its comparative dependence connected gas.

It besides flagged erstwhile IMF study suggesting nan UK’s dependence connected imported fossil fuels near it nan worst-hit system successful occidental Europe by nan spike successful prices which followed nan Russian penetration of Ukraine.

The study stated: “Our findings show a important load placed connected Scottish consumers during nan crisis, highlighting nan risks for each power consumers of reliance connected volatile fossil substance markets.”

It added: “While location has been immoderate advancement made connected reducing request for state done building much renewables during nan crisis, advancement connected shifting distant from state boilers for heating and reducing dependence connected lipid and state successful nan business assemblage remains slow.

“In an progressively uncertain world, this raises questions astir whether Scotland is prepared for different crisis.”

Professor Tavis Potts, co-coordinator astatine nan Just Transition Lab astatine nan University of Aberdeen, said: “Anybody who has paid a state measure complete nan past fewer years – businesses and families alike – has felt nan impacts of Scotland’s reliance connected lipid and gas.

“Drilling for much North Sea state won’t hole this underlying problem aliases little measure costs for consumers aliases manufacture arsenic output is excessively debased to power prices that are group successful world markets.

“With astir of nan North Sea state assets having been extracted, early marginal finds could only proviso a fraction of nan UK’s early request – and it won’t make immoderate quality to bills pinch expanding reliance connected imports.

“To shield power consumers from early power value shocks successful an progressively uncertain world, lowering request done renewables and different nett zero technologies is key.

“Wind powerfulness trim UK wholesale day-head prices by a 3rd past twelvemonth and pinch caller offshore upwind auctions delivering astatine scale, this effect is group to increase.”

Mercedes Villalba, Labour MSP for nan North East of Scotland, described nan findings arsenic “damning”.

“They uncover nan immense costs of our continued dependence connected world fossil fuels for households crossed Scotland,” she said.

“What’s more, nan ECIU makes clear that working-class communities carnivore nan brunt of our government’s nonaccomplishment to accelerate a conscionable power generation.”

Minister for Energy Consumers Martin McCluskey said: “This study shows precisely why we request to push up pinch our cleanable powerfulness ngo to bring down nan costs of power and guarantee location grown, cleanable powerfulness for our country.

“We person secured capable homegrown cleanable power successful our caller auction to powerfulness nan balanced of 16 cardinal homes, protecting households from early value shocks.

“Alongside that, our Warm Homes Plan – backed by £15 cardinal of backing – will trim nan costs of heating homes successful Scotland, making homes warmer, bills lower, and our power strategy much secure.”

The Scottish Government’s Energy Secretary Gillian Martin said: “Fundamentally, power prices stay precocious compared to pre-2022 levels, and contempt UK Government promises to bring them down.

“Scotland is an power rich | federation but shamefully, 31% of our organization are successful substance poverty. We must person nan afloat powers of independency to make our power wealthiness activity for our people.

“In nan meantime, we person worked pinch stakeholders to create a societal tariff successful nan shape of an automatic and targeted discount connected power bills to reside unaffordable bills astatine source, which nan UK Government must urgently adopt. Under our proposals, which person transverse assemblage support, 660,000 households successful Scotland would spot their estimated substance bills spell down by an mean of £700.

“Until that happens, we will proceed to do each that we tin wrong our powers to tackle substance poorness and support households that are struggling, peculiarly successful agrarian communities.”

She added: “We are investing £300 cardinal this twelvemonth into improving nan heating and power ratio of our homes and buildings.

“And this wintertime we will put complete £197 cardinal successful our Winter Heating Benefits, pinch much than 1.5 cardinal payments already made to thief households pinch their power bills this winter.”