Scotland ‘already self-rationing its energy use’ says leading academic
SCOTLAND and the UK as a whole are already embarking on energy rationing, according to a leading expert.
Alexander Kemp, professor of petroleum economics at Aberdeen University, told The Herald on Sunday both individual households and businesses were reducing their use of electricity and gas amid a steep climb in prices.
Prime Minister Liz Truss said during the Tory leadership contest she would “rule out” energy rationing amid concerns over supplies after Russian president Vladimir Putin halted the export of Russian gas to Europe.
The Herald on Sunday asked the Scottish Government if it was drawing up plans for energy rationing over the winter months.
In response, a spokesman said the National Grid was confident supplies would be maintained over winter, appearing to suggest no back-up rationing measures are currently under consideration.
“The Scottish Government is in regular contact with the National Grid, who are responsible for managing and maintaining our energy supply across the UK, to monitor the situation,” he said.
“As would be expected, the National Grid, alongside the UK Government, have undertaken a range of modelling to analyse our anticipated energy needs over the winter months and are confident the UK’s requirements will be met in full.”
However, Prof Kemp told The Herald on Sunday the stances being taken by both governments did not convey the full picture of what was happening.
“The phase rationing should be explained,” he said. “We are already having self-rationing by individual consumers and by businesses. Self-rationing means responding to the high price of gas and electricity by, for example, reducing the temperature of your heating, turning off lights more often. There will be more of that in the winter.”
Hours cut
PROF Kemp pointed to businesses, for example in the hospitality sector, reducing opening hours and restricting the services they offer in response to high energy costs.
“With respect to businesses there have been plenty of announcements by businesses about reducing supplies, such as in the service sector over reducing their opening hours,” he said.
“There’s a hotel in Aberdeen which has just announced it will no longer be providing bedrooms nor meals because of the high energy costs. It will just be keeping the bar open.”
He also pointed to the announcement last week that the historic Stoneywood paper mill in Aberdeen has gone into administration with the loss of more than 300 jobs.
Blair Nimmo, chief executive of Interpath Advisory and joint administrator, cited “skyrocketing” energy costs as among the reasons for the business going into administration.
“Unfortunately, and following on from the severe challenges posed by the pandemic, the significant economic headwinds which have been impacting industrial manufacturing businesses up and down the country, including skyrocketing energy costs and spiralling input prices, have proved to be overwhelming for the group,” Mr Nimmo said.
Prof Kemp added: “So selfimposed rationing is already taking place.”
He went on to say that governments would be doing all they could to avoid blackouts and in its modelling for energy supplies and usage over the coming winter, the National Grid would have taken into account the reduction in energy use by households and businesses because of high costs.
Prof Kemp said the National Grid would also have examined usage in the worst-case scenario if Scotland and the UK were hit by a very cold winter.
Firm support
LAST week, the UK Government announced that energy bills for businesses will be cut by around half their expected level this winter under a support package. The scheme will fix wholesale gas and electricity prices for firms for six months from October 1, shielding businesses from crippling costs. Hospitals, schools and charities will also get help, it said.
The move followed a separate multi-billion-pound plan to help households with bills for two years. Under the domestic users scheme, bills for a typical household would be limited to £2,500 annually until 2024. Analysts suggest the help for firms and households combined could cost up to £150 billion.
Russia supplies about 35 per cent of the continent’s gas and around 3% of the UK’s. Around half of the UK’s supplies come from the North Sea, about one-third from Norway.
The rest is made up of imports of liquefied natural gas (LNG) transported to the UK by sea from countries such as Qatar and the US. The Russian gas that the UK receives also comes in LNG form.
There have been announcements on reducing supplies, like the service sector reducing opening hours