The Scotland energy crisis cost the country’s economy an estimated £11 billion between 2021 and 2024, according to new analysis, with households alone paying an extra £5.8 billion on energy bills.
The figures, published this week by the Energy & Climate Intelligence Unit, reveal the financial toll of soaring gas and oil prices following Russia’s invasion of Ukraine in 2022.
The report warns that Scotland’s reliance on international fossil fuels has left families, businesses, and public services exposed to global market shocks, and reignited debate over energy security, renewables, and fuel poverty.
What caused the Scottish energy crisis to cost £11bn?
According to the ECIU, between 2021 and 2024:
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Households paid £5.8bn in additional costs
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Industry absorbed £1.8bn
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Commercial, agricultural, and public sectors faced £2.6bn
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Non-domestic road fuels accounted for £0.8bn
That brings the total economic hit to £11 billion.
The report states: “Our findings show a significant burden placed on Scottish consumers during the crisis, highlighting the risks for all energy consumers of reliance on volatile fossil fuel markets.”
The think tank also cited previous International Monetary Fund analysis suggesting the UK was the worst-hit economy in Western Europe due to its dependence on imported fossil fuels.
How much did Scottish households pay during the energy crisis?
Scottish households paid an extra £5.8 billion over three years — an average of around £2,260 per household.
To put that into perspective, the report says this equals roughly 70% of a typical Scot’s annual spending on food and non-alcoholic drinks.
Lower-income areas were hit hardest. Households in poorer communities spent a larger share of their income on excess energy costs than those in wealthier areas.
This comes as official figures show 31% of Scotland’s population are in fuel poverty, meaning they struggle to afford adequate heating.
Which parts of Scotland were hit hardest?
Industrial and business costs were uneven across the country. The report highlights the following areas:
| Area | Additional Industry Costs (2021–24) |
|---|---|
| Glasgow | £800 million |
| Edinburgh | £740 million |
| Highlands & Islands | £560 million |
| Aberdeen | £390 million |
Energy-intensive sectors such as manufacturing, agriculture, and public services faced steep bills, adding pressure to already stretched budgets.
Does drilling more North Sea gas reduce bills?
Professor Tavis Potts from the University of Aberdeen’s Just Transition Lab argued that increasing North Sea drilling would not lower consumer bills.
He said: “Drilling for more North Sea gas won’t fix this underlying problem or lower bill costs for consumers or industry as output is too low to influence prices that are set in global markets.”
He added that wind power had already reduced UK wholesale electricity prices by around a third last year, suggesting renewable energy expansion could shield consumers from future price shocks.
What are politicians saying about the Scottish energy crisis?
The findings have sparked political debate across Holyrood and Westminster.
Mercedes Villalba, Scottish Labour MSP for the North East, described the figures as “damning”, arguing that working-class communities have borne the brunt of high bills.
UK Energy Consumers Minister Martin McCluskey said the report underlined the need to accelerate clean energy projects.
He pointed to a recent UK renewable energy auction that secured enough power to supply the equivalent of 16 million homes.
Meanwhile, Gillian Martin said energy prices remain higher than pre-2022 levels and renewed calls for greater powers over Scotland’s energy resources.
She said: “Scotland is an energy-rich nation, but shamefully, 31% of our population are in fuel poverty.”
She also outlined proposals for a social tariff, which would provide an automatic discount on energy bills. Under the plan, around 660,000 households could see bills fall by an average of £700.
The Scottish Government says it is investing:
- £300 million this year in heating and energy efficiency upgrades
- £197 million in Winter Heating Benefits
- £15 billion (UK-wide funding) through the Warm Homes Plan
Why does Scotland remain vulnerable to global energy shocks?
The UK has some of the highest industrial energy costs in Europe, largely because it relies on gas.
Even though Scotland produces energy from the North Sea, prices are still tied to international markets.
That means events overseas, such as war, sanctions, or supply disruptions, quickly affect bills in Scottish homes and businesses.
The ECIU warned that while renewable energy capacity has grown, progress in replacing gas boilers and cutting fossil fuel use in industry remains slow.
