Ministers spent £500,000 of public money on broken pledge over cheap state-owned energy for Scots poorest

It was due to be established by this year.

But it has emerged that almost £483,076 has been spent commissioning an outline business case, to look in detail at the commercial, financial and economic case for the company.

A Strategic Outline Case and Outline Business Case were both completed by independent consultants on behalf of the Scottish Government.

In November, ministers said: "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."

The move to drop the plan has been slammed by the think tank Common Weal's energy group which helped champion the firm.

Scottish Green co-leader Lorna Slater urged the First Minister to push ahead with the creation of a national energy company earlier this year - before the party joined the SNP in a government partnership.

But it has emerged the plan has not formed part of the partnership agreement and there is anger after Scottish Government sources confirmed the project has now been dropped.

Ms Sturgeon outlined her vision at a Scottish National Party conference in Glasgow four years ago saying: “Energy would be bought wholesale or generated here in Scotland – renewable, of course – and sold to customers as close to cost price as possible,” she told the Scottish National party conference in Glasgow on Tuesday. “No shareholders to worry about. No corporate bonuses to consider.”

Its only job would be to secure the lowest price for consumers, she said.

She said it would give people - particularly those on low incomes - more choice of which supplier to use.

Her speech implied that some commercial firms were making unfair or unreasonable profits.

Speaking at First Minister’s Questions in June Ms Slater cited TUC analysis showing the UK’s investment lagging behind Europe’s other G7 nations and said “failure to invest in a green recovery would be a disaster for our planet and for our economy”.

The Scottish Government confirmed that the plans have been dropped in favour of a new advisory agency rather than an active company.

The think tank Common Weal's energy group accused the Scottish Government of "smoke and mirrors" in relation to the project.

"No serious work even appears to have been done on this beyond press releases and now it has been officially dropped as government policy," it said.

"The purpose of a National Energy Company was to own energy resources, to provide secure, reliable retail energy to households and to finally capture renewable energy supply chain and manufacturing jobs for Scotland.

"All of these will prove crucial as we begin in earnest the massive and costly tasks of expanding renewable electricity generation, building grid-level energy storage and getting Scotland to stop burning gas for heating. Yet again Scotland is being very badly let down on achieving public good from its vast energy resources.

"This is a government that simply never seems to learn lessons from past failures but seems determined to repeat them. Scotland’s energy will again be owned and sold by largely foreign multinationals who will buy the technologies abroad. Future generations will look back and wonder how Scotland managed to squander the potential of its renewable energy in almost exactly the same way it squandered its oil resources.”

Scottish Labour’s net zero, energy and transport spokesman Monica Lennon said: “This embarrassing downgrade lays bare the complete lack of ambition at the heart of this government.

“There is always a gulf between what the SNP promise and what they deliver, but even by their standards this is galling.

“This confirms once and for all how little influence the Greens really have in government – and how quickly they’ve abandoned their principles.

“A real public energy company has the potential to transform energy production in Scotland and drive forward the renewable revolution we urgently need. Instead it seems we’re about to be landed with yet another toothless government body.

“This is just not good enough. The Greens and the SNP must drop these watered-down plans and commit to delivering the promised national energy company in full.”

A Scottish Government spokesman said: "Work on a planned public energy company was halted during the pandemic. As announced by the Cabinet Secretary for Net Zero, Energy and Transport in June ministers will now focus government efforts on a new dedicated national public energy agency.

"This will coordinate and accelerate delivery of heat and energy efficiency work, inform and educate the public on the changes required, provide expert advice to national and local government, and work with public, private and third sector partners to deliver this transformative national project. Further details will be set out to Parliament in due course.”