AN SNP minister has justified pulling the plug on his party’s flagship plans to set up a public energy company despite party activists last week demanding the policy is resurrected.

The Scottish Government’s Programme for Government last week made no mention of the policy, first announced at the 2017 SNP conference, and instead an energy agency will be set up after public energy company plans were “halted”.

Four years ago, Nicola Sturgeon revealed plans for a public energy company which would see energy brought wholesale or generated in Scotland and sold to customers “as close to cost price a possible”.

SNP members at this year’s party conference last week voted overwhelmingly for the public energy company plans to be put back on the agenda.

The Scottish Government’s Net Zero, Energy and Transport Secretary, Michael Matheson, told MSPs that “the scale and nature of our priorities have had to change” in lights of emissions reduction targets, which he said were not in place when the policy was announced in 2017.

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Conservative net zero, energy and transport spokesperson, Liam Kerr, asked the Cabinet Secretary why plans have been dropped despite £500,000 being spent on it.

Speaking at Holyrood’s Net Zero, Energy and Transport Committee, Mr Matheson said the £500,000 “was spent on a business case and analysis around the business case” to set up a public energy company.

He said: “The reason there’s been a change in our approach here, at this stage, is because the priority is the scale of the transition that we now need to see in the decarbonisation of domestic premises.

“Four year ago, we weren’t looking at the need to decarbonise 1 million homes and domestic heating systems between now and 2030. The scale and nature of our priorities have had to change.“

He added that the priority is now “not so much the supply of the service”, but instead “the coordination of the action that will be necessary to deliver on the decarbonisation”.

The plans for an energy agency will initially just be virtual, and will help coordinate decarbonisation measures. Mr Matheson confirmed that it will have no dedicated staff and will be made up from existing Scottish Government staff. 

Mr Kerr asked the Cabinet Secretary if the call for a public energy company at this weekend’s SNP conference will “impact your thinking” about the policy.

Mr Matheson said: “The scope for a public energy company at some point in the future is still there. However, the immediate action we need to take is the coordinated plan around this mammoth task.

“There may still be, at some point going forward, a role for a public energy company that can assist us around meeting some of the challenges we have within the existing energy market.

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“Our key priority at the moment has got to be about trying to achieve what is a very stretching target between now and 2030 that has been set down in a statutory basis by parliament.”

Labour’s net zero, energy and transport spokesperson, Monica Lennon, said there was “lots of political consensus” between SNP, Green and Labour politicians on bringing forward a public energy company.

She added: “A public energy company has the potential to be transformative and to be really progressive.”

Ms Lennon claimed that SNP delegates voting 527 to six in favour of a public energy company being set up was “a very strong mandate”, adding that it was down to people being “very concerned about fuel poverty as well as the environmental issues”.

Speaking after the meeting, Mr Kerr said: "The SNP’s promise of a public energy company was hollow and utterly insincere. Now in typical SNP style this has been reduced further to a website and a ‘virtual agency’.

“To go from planning a full scale company to not even providing dedicated staffing shows that the SNP-Green Government is not taking this issue seriously.

“In yet another embarrassing development, SNP diehard members are clearly fed up with their party’s political games. At the party conference, they embarrassed the government by overwhelmingly backing to reinstate a public energy company .

“Once again, the SNP’s rhetoric hasn’t lived up to reality, and once again the nationalists have failed in a key devolved area.”