Information on proposal to establish a publicly owned energy company: FOI release

Information requested

You asked for information on how much the proposal to establish a publicly owned energy company has cost the taxpayer, including the fees to consultants, time spent by ScotGov staff and Scottish parliamentarians.

Response

The public energy company is an ambitious long-term project that is intended to deliver good public outcomes such as tackling fuel poverty; delivering Scotland’s climate change targets as well as looking towards economic development opportunities.

Paul Wheelhouse, Minister for Energy, Connectivity and the Islands, invited local authorities to work in partnership with the Scottish Government to develop this ambition. In this we proposed a phased approach, as recommended by the independent Strategic Outline Case we published in April 2018, https://www.gov.scot/publications/public-energy-company-strategic-outline-case/pages/11/. As part of the first phase we are investigating the scope for a white label, or franchise, arrangement. In later phases the public energy company is likely to move from this initial focus to direct energy supply and generation.

To ensure the energy company’s development is evidence-based we commissioned an outline business case, to look in detail at the commercial, financial and economic case for the company. As part of this we have held engagement events to gain input from local authority representatives and interested parties from various sectors. The outline business case was completed at the turn of the year and we will publish this once we have considered the consultants final report along with local authorities.

The Strategic Outline Case and Outline Business Case were both completed by independent consultants on behalf of the Scottish Government, and the total cost of consultancy fees for the public energy company to date stands at £483,076.10 inc VAT. Time spent on the project falls within general policy work of Scottish Government officials, mainly within the Energy Company Services Team.

The Coronavirus (Covid-19) pandemic has understandably interrupted progressing discussions with our local authority partners as we contend with the pressure of other work required in response to the crisis. Specifically since March our respective focus and resources have shifted to Scotland’s Coronavirus response. Our intention was, and still is, to discuss the outcomes of the final report with interested local authorities and agree next steps.

We remain committed to the public energy company ambition and would wish to have this assist in the economic recovery and our updated climate change plans once developed further. Updates on energy company progress will continue to appear on our website, https://www.gov.scot/policies/homeenergy-and-fuel-poverty/public-energy-company/.

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