Renewables are a boon to Scotland's energy sector and economy

Scotland can become the sustainable energy capital of Europe. The seas surrounding the country – not just the mainland, but its many islands – will provide us with wind, wave, tide, and hydrogen. All will be usable long after we have finally abandoned oil and gas.

Possessing such resources is only the starting point. We need to be able to manage them well. With any power supply system, there are three critical objectives.

The system should be sustainable. Coal, oil, and gas produce massive carbon emissions, and fail that test. Nuclear power is low carbon and seemed to be the future 50 years ago. Then there was a serious accident at Three Mile Island in Pennsylvania, and the near-disaster at Chornobyl – now in a warzone.

Our energy sources should also be secure. There is still plenty of gas in Russia, which Germany happily bought at relatively low prices for many years. Now, Western Europe is planning to end all use of Russian gas by the autumn of 2023.

Our renewable energy sources should pass this test as well, at least once we have spent enough on research and development for them to be fully secure. When nuclear was the future, only cranks and dreamers had any interest in renewable energy. But in Denmark, after the oil shock in 1973, the government and society came to realise that a good route to energy security would be through the development of wind power.

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The country’s focus on research and development has led it to be a world leader in the technology which has driven the cost of wind power down so that it is not only secure, but often the lowest cost option available to us.

We are left with the third property of a good system, resilience. When we flick a switch, we expect power to be available to us instantly. Being able to meet all our demands all the time means that we build our power systems so that there is plenty of redundancy. We always want to have some spare capacity so that it is never necessary to ration power.

Resilience is the weakest part of the renewables mix. Any power system needs a reliable base load. Nuclear and coal power stations generally take on that role and are designed to be always on, always producing at close to full load. But the wind can stop blowing, it is dark for 15 hours per day in winter, limiting the capability of solar energy to provide base load, and while tides are predictable years in advance, they will not run steadily. Fully sustainable hydrogen is only a concept.

But these are engineering problems. With imagination, funding, and persistent effort, we will be able to overcome them. There will then be related problems of system design – and in the UK, the political economy underlying power generation has led to a mess.

Thatcherites worship at the altar of efficiency. They believe that allowing organisations to make profits will ensure that they provide services efficiently – reliably and at low cost. They even claim that markets will signal to organisations how much value the public puts on resilience and sustainability.

With such faith in free markets, they argue that government should sub-contract the problems of managing large organisations to specialist regulators, and that competition among providers of a service will always be better than the oversight of a democratically elected government in ensuring that these large organisations meet the needs of the public.

We have spent 30 years testing the limitations of this approach. We saw the rise of a slew of small businesses, which bought energy in wholesale markets and sold it to retail customers. With almost no capital required to enter the business, as soon as energy prices started to rise unexpectedly quickly, these companies folded. Not much resilience there.

We have seen storage capacity being stripped out of the system. This further reduces resilience.

It seems obvious that a gas distributor should have an obligation to buy gas cheaply during the summer, and store it so that there is a strategic reserve available if it is needed in a sudden cold snap in the winter. Prior to privatisation,

British Gas had to be ready for once-in-a-century crises. We have lost that capacity.

Strip out resilience, and there are only two ways in which the system can respond to economic instability: cutting supply, and pushing up prices. So far, at least, we have avoided blackouts. Disruption in the energy supply system after Russia’s invasion of Ukraine has meant pushing up prices. Regulators are supposed to cap price rises. If they do that, then suppliers will go bankrupt.

Would that be so bad? Our government would then, finally, need to take responsibility for the situation. Seeing the glibness of the contenders to be our next prime minister, they seem likely to avoid doing that for as long as possible.

For Scotland, it should be different. Independence, freeing us from the delusions of Thatcherism, will allow us to build security and resilience back into our fully sustainable power system. Tidal energy will be part of the mix.