Kevin Keane
BBC Scotland Environment correspondent
Bbc
Greg Jackson, the owner of Octopus Energy, says that invoices must be calculated regionally
The boss of one of the largest energy suppliers in the United Kingdom says that people living in Scotland could have the cheapest electricity in Europe.
Greg Jackson, who founded Octopus Energy, wants the electricity market to be reformed to introduce zonal prices.
It argues that if prices were based on local production, high renewable energy levels produced in Scotland would maintain low bills.
However, rival electricity companies say that zonal prices would create a postal code lottery and could lead to major infrastructure projects currently planned for Scotland which has gone to other parts of the United Kingdom.
Seagreen, off the coast of Angus, is now the largest offshore Scottish wind farm
The British government is currently exploring major reform options on the electricity market.
These options include regional or zonal prices, which is used in some other parts of the world, including Australia, Italy and Sweden.
Currently, the wholesale price of electricity applies to the entire United Kingdom-and is based on the cost of the most expensive unit generated anywhere in Great Britain at the time.
The dependence of the National Grid towards gas, the most expensive power source, maintains high invoices – even if there is also a large -scale production from cheaper renewable sources, such as wind energy.
As part of a zonal pricing system, invoices would rather be linked to the most expensive unit generated in a specific area.
Since Scotland is already a net exporter of renewable electricity, the argument is that the country’s invoices would be much cheaper.
Mr. Jackson, whose company is now the largest interior energy supplier in the United Kingdom, described the existing system as “crazy”.
He said that it did nothing to lower invoices and that billions are wasted in payments to extinguish wind farms when the demand is low.
He told BBC Scotland News that under zonal prices, Bills in Scotland – where there is “a lot of renewable generation” – would be “very considerably reduced by where they are now”.
He said that the amount would vary from Scotland, but some invoices would drop hundreds of pounds per year.
Scottish Power Manager Keith Anderson said the regional prices would endanger the investment
However, other energy companies – including Scottish energy and Scottish and South electricity (SSE) – are opposed to the idea.
Last month, they were one of the 55 companies that wrote a six -page letter to the British government raising “serious concerns” around zonal prices and saying that it would do nothing to reduce bills.
SSE said that those in favor of the program had used the “defective logic” and that it would create a “postal code lottery” for energy bills.
Scottish Power Managing Director Keith Anderson told BBC Scotland News that this would also create an uncertainty of around 75 billion pounds in investment.
This initiative to “reclassify the country”, the largest in the history of the United Kingdom’s electrical system, would see major transmission pylons installed to increase the amount of new renewable energies in the country.
However, he warned that such projects could be diverted to other parts of the United Kingdom to bring down invoices in these areas by making each region less dependent on the expensive production of fossil fuels.
“What we say is that, build it, get all the economic growth of the United Kingdom, distant gas from the electricity system, drop people’s bills and examine if we need a zonal pricing system,” he said.
Dozens of billions of pounds are intended for investment in the generation of new wind turbs and changes in the transmission infrastructure
Mr. Anderson insists that the objective should be to lower the invoices of the entire United Kingdom, rather than in certain regions where renewable energies are in abundance.
He says that zonal prices aim to encourage investment in particular parts of the country – but does not recognize that wind farms must be built in places where it is windy.
The pattern of Octopus, Mr. Jackson, believes that a greater renewable energy capacity could still be built in Scotland.
He also says that cheaper prices would encourage operators in the data center, who use large amounts of energy, to build their sites north of the border.
Mr. Jackson says that this would reduce the quantity of network upgrades necessary to move electricity from where it is generated where it is consumed and make the global system more effective.
But this has been rejected by Scottish Power, who indicates that the data centers must be built near the largest populations to maximize their response times for connectivity.
Mr. Anderson and Mr. Jackson both cite separate research that supports their arguments.
But it will not put their reputation either that the British government is likely to decide when it publishes its examination of the electricity market, especially probably during the summer.
