With 88% of businesses in Scotland citing the impact of rising energy costs, a new report has suggested that zonal pricing – a system where energy costs align with regional energy production levels – could have a marked effect on the economy.
According to the survey, which was conducted by Diffley Partnership and Stratcom UK for Octopus Energy, 72% of Scottish firms say that high energy prices affect their ability to invest, while 66% state it has influenced hiring decisions and 77% report it has led to price hikes for customers.
Energy price reform
Zonal pricing, which would take into account the comprehensive wind energy network in Scotland, would lead to lower prices, according to the report – with some 64% of respondents calling for energy price reform, most notably in the manufacturing and IT sectors.
If energy prices fell, 64% of Scottish businesses say they would increase staffing, 74% would invest more, and 70% would reduce prices for consumers, according to the report.
Thriving businesses
“Under our current system, hard-up Scottish households and businesses are exposed to some of the highest energy prices in Europe, while wind farm owners are paid nearly £2 billion annually to turn off cheap green energy in Scotland that could be helping out local consumers,” commented Greg Jackson, founder of Octopus Energy Group.
“Under zonal pricing, the whole country would save £55bn on bills, prices in Scotland would be amongst the cheapest in Europe and Scottish businesses would thrive.”
The research follows a report by FTI Consulting, commissioned by Octopus Energy, which found that introducing zonal pricing could save UK households and businesses £55 billion over the coming decades.
A number of Scottish business owners were questioned as part of the survey, with one saying that “[high energy prices] have affected pay increases and the number of new positions we hire”, and another noting “Scottish businesses must benefit directly from renewable energy generated onshore and offshore in Scotland.”
Octopus Energy operates a £7 billion renewable energy portfolio and serves 9 million households across 32 countries. Read more here.
