Recently published figures from the 2024 Scottish House Condition Survey (SHCS) underline the deep inequity faced by households living in Scotland’s rural and island communities, most of which can’t gain access to the cheapest fuel, mains gas, which costs almost five times less than electricity. Those same communities are hosting most of the renewable energy projects, upon which the country now relies, receive too little compensatory benefit for so doing and continue to experience by far the highest levels of extreme fuel poverty found anywhere in Scotland.

The survey shows that 42% of households using electricity as their primary heating source are in fuel poverty, significantly higher than those using gas (27%) or oil (23%). The situation is even more severe when looking at extreme fuel poverty, with 33% of electrically heated households affected, compared with just 12% of gas-heated homes.

Despite being at the centre of Scotland’s renewable energy production, local households often see little direct financial benefit. Instead, they face some of the highest electricity costs in the country, driven by a national marginal cost pricing structure, where the cost of the most expensive generation method needed to meet demand, usually natural gas, sets the price for the entire market.

This means that even when cheaper, fixed price, renewable energy sources (wind, solar) are generating most of the power, the wholesale price often reflects the higher cost of running gas-fired power stations.

Recent instability in the Middle East has once again pushed global energy prices upward, feeding into electricity costs for consumers. While customers will be protected in the short term by the energy price cap there are fears about the impact on future costs. It should also be borne in mind that the recent energy price cap announced, at £1,641 per year for a home with access to mains gas, bears no resemblance to the cost incurred for a house with no access to mains gas and is reliant on electric heating. Those costs will be almost double that announced by Ofgem, regularly exceeding £3,000 per year.

Much of Scotland’s electricity is generated domestically from renewable sources whose operating costs are largely unaffected by global fossil fuel price shocks, but the increase in gas wholesale prices will inevitably lead to disproportionately higher electricity prices due to the marginal cost pricing arrangements.

This disparity is even more perverse for rural and island communities hosting renewable infrastructure. The contrast is stark: while significant profits are generated from clean energy projects in their areas, many local residents, particularly those reliant on electric heating, continue to struggle to afford the electricity produced around them.

The latest SHCS survey results highlight the urgent need to address the structural imbalance in the energy system so that communities powering, not just Scotland’s, but the UK’s renewable transition is not left paying the highest price for it.