Ovo job losses should prompt review of Scottish energy sector – Brian Wilson

News of Ovo Energy cutting hundreds of jobs in Perth and Dunfermline should not go unchallenged – not only because it throws light on the company’s business practices but also calls into question the role of Scottish and Southern Energy.

Ovo Energy's offices in Perth, Edinburgh, Cumbernauld and Dunfermline are to close (Picture: Jeremy O'Donnell/Getty Images)
Ovo Energy's offices in Perth, Edinburgh, Cumbernauld and Dunfermline are to close (Picture: Jeremy O'Donnell/Getty Images)

Two years ago, SSE raked in £500 million by selling its retail business to Ovo, based in Bristol. As I pointed out then, this single action should have called into question the company’s thoroughly unhealthy power within the Scottish energy sector.

When electricity was privatised, Scotland was treated differently from the rest of the UK. Because the two state-owned Scottish companies, Scottish Power and Hydro, were popular with the public, Scottish ministers argued successfully for them to retain vertical integration – generation, distribution and retail.

A lot has changed since then. Critically, the advent of renewables has given these two companies incredible power in the market place. It requires a child-like belief in the strength of Chinese walls not to conclude that their multiple roles should, long ago, have been separated completely.

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The significance of the Ovo sale was that SSE had voluntarily surrendered (for money) the precise case for having been treated differently in the first place – ie they are no longer vertically integrated and Ovo’s actions this week in relation to Perth were entirely predictable.

It is long overdue for some Holyrood committee to take a hard look at whether the Scottish Power/SSE monopoly serves Scottish interests – an obvious question which the lobbying power of these two organisations has so far successfully resisted.

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