First Minister Alex Salmond
'Scotland’s renewables revolution'
May 14, 2012
I am delighted to be here at this very prestigious conference and particularly pleased to be speaking here in the Grieghallen.
This auditorium, and the Grieg name, is emblematic of the strong ties of diplomacy, trade and friendship which have existed between Norway and Scotland for generations.
As many of you will know, Edvard Grieg’s great grandfather, Alexander Greig – as he was then known then – came to Bergen from Scotland in the 1770s, and founded a family business which traded lobster and dried fish across the North Sea.
He originally came from Cairnbulg – a village in the north-east of Scotland, in the constituency which I represented for almost a quarter of a century as a Member of Parliament in the Westminster Parliament in London.
I have to say, I see great similarities between the climate of Cairnbulg and the climate here in Bergen.
And perhaps we know why Alexander Grieg decided that he would seek his new home in this beautiful city in Norway.
The Grieg family name remained in Bergen. Edvard Grieg’s father - also called Alexander - was British Consul here.
So this is a very fitting location in which to talk about this wonderful subject of renewable energy – an industry which might be even more central to the economies of Scotland and Norway in the 21st century than fishing was in the 18th century - and one where, like the fishing industry, Norway and Scotland share so much as a common interest.
Of course, these common interests in energy are not new.
They go back as long ago as 1908, when the British Aluminium Company used the hydro-power expertise it had developed in Scotland to power the first Norwegian aluminium smelter at Sognfjord. Norway’s subsequent experience of hydro-electric was very influential in the formation of the North of Scotland Hydro-electricity board in the post-war period.
And it is entirely fitting that one of the companies who are engaged in the proposal to build an interconnector across the North Sea is Scottish and Southern Energy, whose foundation company was the hydro-electric company of Scotland.
Since then, both countries have learned from each other in relation to technical developments. Scotland’s pumped storage scheme at Ben Cruachan in the 1960s, for example, used technology which was revolutionary at the time, and was subsequently highly-influential in the more widespread adoption of pumped storage in Norway.
I am delighted to announce that this collaboration between our two nations is expanding into the area of heritage.
Historic Scotland is working with the Norwegian Museum of HydroPower to create a hydro-heritage website – making archive material from Scotland and Norway available online, and ensuring that people from around the world can see how Norway and the Scottish Highlands achieved their hydro-electricity revolutions.
Occasionally, when there are well-publicised spats about the development of renewable energy in Scotland – and my determination, and that of my government to pursue this to its logical conclusion, to mobilise this huge natural resource – I often think back to one of my predecessors, a gentleman called Tom Johnston, who was the Secretary of State for Scotland in the war period.
And Tom Johnston was the pioneer of hydro-electric power in Scotland.
At that time, the concept of hydro-electricity was hugely controversial in Scotland, with the most amazing battles and arguments, particularly involving landed and aristocratic interests.
And Tom Johnson, to help strengthen his hand with the Westminster Government, decided to form a ‘Council of State’, which would comprise all the previous Secretaries of State for Scotland from the various other parties. They were mostly Conservative politicians from an aristocratic background.
Tom Johnston’s problem was that, while this Council of State was an excellent idea, in his early political career as a radical Independent Labour Party Member of Parliament in the 1920s, he had written a book called ‘Our Scots Noble Families’, in which he had gone through all these aristocratic families of Scotland one-by-one and decried them in the most vehement language as having sold out their country for generations.
And so, there he was faced with the problem of needing to mobilise these self-same families into his Council of State to help him smooth the way towards hydro in Scotland.
He developed a technique which unfortunately is not available to politicians these days, in the age of the internet and the constant recording of everything that is said.
He sent his press secretary, as he travelled round Scotland, to every book shop and he bought up all the remaining copies of his own book, ‘Our Scots Noble Families’ in an effort to take it out of circulation!
Of course, nobody in Scotland today would seriously quarrel about the great hydro-electric schemes that were developed in the post-war period.
In fact, they are magnificent structures of engineering, and also attractions for the tourist industry.
Yet, at the time they were being developed, they were controversial; and it’s a reminder today that if you see a prize so overwhelming in its importance - in terms of the economy, in terms of the development of renewable energy, in terms of the environment and the energy security and safety of this continent - then you must keep driving towards that goal, while remaining aware that argument and debate is going to be necessary to convince people on to that side.
When I last visited Norway, in August 2010, I saw how our nations are now working together at the cutting edge of the latest renewable energy technologies. ANDRITZ HYDRO Hammerfest’s HS1000 tidal technology is to be used by ScottishPower Renewables in the world’s first consented tidal turbine array in the Sound of Islay off Scotland’s west coast.
Since 2010, good progress has been made on the project, with the device undergoing testing at the European Marine Energy Centre in Orkney.
Later this week, the project partners are due to announce the results of the initial testing – marking the conclusion of a major milestone in this pioneering project.
In talking about renewable energy this morning, one of the points I will make is that the ties between Scotland and Norway are likely to strengthen and deepen further in coming years, as we both have a huge role to play in the development of a low carbon economy which is of not only continental, but global significance.
But first I want to speak about Scotland’s renewables revolution, and how central it will be to the Scottish economy and to Scotland’s society in the coming decades.
It is a revolution that is underpinned by three key factors – resources; ambition and investment.
In terms of resource, Scotland has vast potential renewable energy resources.
We have around a quarter of the European Union’s offshore wind and tidal power resource and perhaps 10% of its wave power potential – that from a nation with one percent of Europe’s population.
And we also have resources of technical expertise and research capability which are perfectly suited to capitalising on those natural assets.
Our engineering and manufacturing history is world-renowned.
And, as a result of the last 40 years of North Sea Oil and Gas exploration, we now have particular expertise in engineering in hostile marine environments.
Indeed, between Scotland and Norway, our countries probably know more about the waters around our nations than any other country on the planet – from centuries of expertise in the fishing industry and half a century in oil & gas development.
Scottish companies such as BiFab, Wood Group and Global Energy, having developed their operations in oil and gas, are now increasingly moving into renewables.
There are parallels here with Norway, of course, where companies such as Kvaerner are moving into offshore wind.
Scottish universities are some of the best in the world- with 5 rated in the top 200.
And, crucially, all of our universities are committed to collaborating with each other on renewable energy research.
In January of this year I signed a co-operation agreement between Scotland’s universities and Masdar in Abu Dhabi – an agreement which demonstrates the international recognition Scotland’s energy research is now receiving.
The combination of resources – our renewable energy potential, our engineering expertise and our research base – gives Scotland the opportunity to become the best location in the world for a variety of offshore renewable energy developments.
Europe will need energy from the seas in the 21st century, as it meets the challenge of becoming a low carbon economy.
Scotland has a huge competitive advantage in this area.
We will be able to produce energy better and cheaper than anywhere else – and in deeper waters.
We see within that potential an opportunity that is potentially transformational – transformational for our economy; for the communities and individuals around Scotland who will benefit from the employment opportunities generated; and perhaps also transformational for the international community, as technologies and devices designed and tested in the waters around Scotland start to be used throughout the World.
In order to achieve those transformational benefits, we need to have real ambition.
We have tried to ensure that industry and government work closely together.
And so, I co-chair Scotland’s Energy Advisory Board, which brings together business leaders, academics and government to consider energy policy in a strategic and long-term manner.
We have – in common, with our neighbours in Norway, of course – some of the toughest climate change legislation in the world.
Our legislation was endorsed unanimously by the Scottish Parliament.
We are committed to reducing our greenhouse gas emissions by 42% from 1990 levels by 2020, and to reporting annually on our progress towards that target.
That target demonstrates to potential investors that we are committed to making the transition to a low-carbon economy, and that we are committed for the long-term.
We have also set a target that by 2020, renewable sources will provide the equivalent of 100% of Scotland’s electricity needs. At present, they account for 35%.
We are determined to reach our goal by the end of the decade, and to do so through the development of a range of renewables technologies.
We will build on our existing hydro-power and onshore wind production to move increasingly offshore, with wind, and then wave and tidal generation.
And as an international statement of our ambition, in marine energy, we have established the £10M Saltire prize – one of the largest commercial challenge prizes in the world.
The winner will be the team that achieves the greatest volume of electrical output above a set minimum of 100GWh, using only the power of the sea, over a continuous two-year period.
That competition is run in conjunction with the National Geographic magazine, the largest educational charity on the planet, and has received over 150 expressions of interest from more than 30 countries, with a growing number of declared competitors.
In terms of financing the industry, we are committed to galvanising investment in a world where we have the paradox of huge amounts - walls of investment capital, looking and searching for projects with a decent rate of return.
In backing our ambition for a renewables revolution in Scotland, we are committing significant public investment in a very difficult public spending climate – to provide the support these new industries need.
And although public sums are by their nature a relatively small part of the levels of capital that require to be mobilised, they nonetheless indicate a substantial degree of commitment.
We also, of course, actively encourage private sector investment.
The Scottish Government hosts a low-carbon investment conference every year in order to promote the opportunities provided by the clean-tech sector.
Last year’s event had Al Gore as its keynote speaker. This year’s event, in Edinburgh, will be on 10 and 11 October, and I hope that an array of Norwegian participants will join us for that important event.
Already, this combination of resources, ambition and investment has led to some significant results.
The renewable energy industry in Scotland now employs over 11,000 people - more than our hugely significant Scotch Whisky industry.
The European Marine Energy Centre in Orkney is the world’s only fully-accredited test facility for grid-connected wave and tidal energy converters.
At this moment, there are more different types of wave and tidal devices being deployed in the waters around Scotland than in the rest of the world combined.
The Pentland Firth and Orkney waters leasing area is the world’s largest commercial scale marine energy site with projects planned with a combined capacity of around 1.6GW.
Major research centres are being established in Scotland, and major companies are making big investments.
In March, Gamesa announced that it would base its new offshore wind turbine manufacturing plant at Leith.
That investment, worth around £100m, will see the creation of at least 800 new highly skilled jobs.
It was announced in February that the new UK Offshore Renewable Energy Catapult Centre would be based in Glasgow – following on from the £90 million engineering centre for Strathclyde University announced by the Scottish Government and Scottish Enterprise last year.
At the end of January Samsung announced £100m of investment in a facility for testing wind turbines at the Green Energy Park in Methil in Fife, potentially creating around 500 jobs.
Those developments can be added to previous investment decisions made by Mitsubishi, ABB, Alstom, E.ON and Vattenfall – often in conjunction with leading Scottish energy and engineering companies such as Scottish and Southern, Scottish Power, Clyde Blowers, the Wood Group and Global Energy.
Over the last year it is estimated that there has been some £750 million of investment in the renewables sector in Scotland alone.
And all of this is only the beginning; Scottish Renewables has estimated that there is a further £46 billion of investment in the pipeline.
An independent organisation, Reform Scotland, has indicated that, even using conservative assumptions, by 2020 Scottish electricity exports could increase by £2 billion per year.
Even then, we may only have begun to realise the full potential of our seas.
By 2020 a maximum of 10 GW of electricity generating capacity could be installed off Scotland’s coast.
But by 2050, as wind, wave and tidal power become better established and more economic, the total potential realisable resource in that time period could be closer to 200GW of electricity capacity.
So Scotland’s renewables revolution is only just beginning.
However major infrastructure investment is required in the form of refurbished or new transmission networks if Scotland and Europe are to gain the maximum benefits from this revolution.
In recent decades, gas pipelines have become a key part of the world’s energy infrastructure – transferring gas from the areas where it is found, which are often relatively remote, to the major population and industrial centres where it is required.
Long before that, investment in canals and railways was an essential element of industrialisation across in many countries, since it allowed the transportation of coal.
Electricity transmission networks, inter-country and inter-continental, will soon become ever more important to our global infrastructure than gas pipelines.
We, therefore, must invest in these networks which can transfer electricity from the places that can produce large quantities of renewable energy – whether those are the mountain lakes of Norway, the seas around Scotland or, indeed, the deserts of North Africa.
I spoke earlier today with Odd Øygarden from E-Co, the Chair of the NorthConnect project.
This project, which is backed by Scottish and Southern Energy, E-Co Energi, Agder Energi, Lyse and Vattenfall, aims to build a new interconnector across the North Sea between our two countries.
The attraction of combining the hydroelectric resources of Norway with the wind and marine energy of Scotland, enhancing the security of supply and the flexibility and ability to store energy, is hugely attractive for both countries; allowing Scottish energy to be exported to Norway when we have a production surplus, and enabling energy from your pump storage sites to be transmitted to Scotland when required.
Initial work on NorthConnect has been backed by the European Union and the Scottish European Green Energy Centre.
There is now a real sense of momentum and shared purpose behind the project.
- Environmental studies in both the United Kingdom and Norway have recently been contracted.
- Work on the Norwegian study started last month, and the UK study started last week.
- The cable route study is underway, and the route options report should be available by the end of August.
- And the project team is close to agreement on grid connection in the UK.
The work done so far demonstrates that NorthConnect is viable, and could bring major benefits to Norway, to Scotland and, indeed, eventually to the rest of Europe.
An integrated European energy market is a key objective of the EU’s 3rd Energy Package.
The development of more interconnected energy grids is an essential component of that ambition, facilitating the large-scale use of renewable energy across Europe.
In my view, the NorthConnect is a project - as part of the development of that resource and interconnection, which is of profound importance to the future of this continent - whose time has come.
Scotland’s renewable revolution, therefore, is starting to transform Scotland.
However, it is of course part of a much larger transformation.
The transition to a low carbon economy will be a turning point for mankind on a par with the industrial revolution, or the discovery of America.
As countries which have benefited from hydrocarbons, and will continue to do so for decades to come, Norway and Scotland are also fortunate enough to have rich endowments of renewable energy.
That gives our countries a great advantage, which carries with it great responsibility. We should be playing a lead role in that transition.
We already have a long history of co-operation and innovation, as demonstrated by the Sognfjord aluminium smelter and the Ben Cruachan pump storage scheme, and, as is again apparent, in the plans for the hydro-heritage online archive, as well as through the Islay tidal array and the Northconnect project I’ve also mentioned.
My view is that this co-operation and innovation will continue and strengthen in the future.
By working together, Scotland and Norway can help to develop the technologies and transmission networks necessary in a low-carbon future to which we are committed.
And by achieving that, we will bring major benefits to Scotland, to Norway, to our own economies, to Europe’s energy security and to the environmental imperative of this planet.