Minister for Enterprise, Energy and Tourism
All Energy
May 20, 2009
Ladies and gentlemen, I'm delighted to be taking part in the opening session of All Energy for the third consecutive year.
I'd like to begin by thanking everyone involved in the planning and delivery of what is now a truly international event. In particular I'd like to pay tribute to Paul Stott [Managing Director of All Energy] and Judith Patten [Project Director].
I'm pleased Ann McKechin could join us today. I know she recognises the huge potential of renewable energy in Scotland, even if we disagree on other aspects of energy policy. The Scottish Government will continue to work closely with the UK Government on a range of energy issues, some of which I will touch on today.
This month we mark 2 years in office for this Scottish Government. Renewable energy is one of Scotland's greatest economic prospects, and I'd like to reflect on the progress made by the sector over that period.
I'll explain what we're doing to help us achieve our green energy goals - and in particular how Scotland is taking the lead in meeting the great climate and energy challenges of the 21st century.
Strategic Aims
Increasing sustainable economic growth has been the Scottish Government's overarching Purpose from day one. Through our spending, our Economic Strategy - and more recently, through our economic recovery programme - we have put sustainable economic growth at the heart of everything we do.
That means focusing on our areas of competitive advantage - and positioning Scotland to capitalise on every opportunity. It means investing in skills, innovation and the industries of the future .
Progress in Consents and Planning
We understand the scale of the energy challenge facing us. However, the pace of change in the renewables sector over the last 2 years should give us great confidence about what we can achieve together.
There is now almost 6 Gigawatts of renewables capacity installed, consented or under construction around Scotland. That takes us beyond our interim target of meeting 31% of Scotland's electricity demand from renewables by 2011.
In the last 2 years Scottish Ministers have consented no less than 22 major renewables projects. That's a substantial increase in pace, and includes Europe's largest single consented onshore wind farm and one of the largest wave energy projects in the world.
And today the First Minister is joining the Chief Executive of Iberdrola to celebrate the official connection and switch-on of the final turbines at Whitelee windfarm near Glasgow - the largest operational windfarm in Europe.
We remain committed to determining new applications within 9 months where there is no public inquiry.
We are supporting the planning system. During 2008 we helped planning authorities prepare supplementary planning guidance for wind farms.
We are now finalising the proposed second National Planning Framework. The NPF reflects our commitment to transmission system reinforcements to support renewable energy. It establishes the principle of renewing baseload generating capacity at existing power station sites, and highlights opportunities to decentralise energy production and supply.
We are consolidating Scottish Planning Policy into a single document and we are now consulting on that until 24 June. The new format will make national planning policy easier to understand and to use.
We value your input to this process, which will help ensure that the policy is clear and useable.
Making progress with emerging technologies
There is a lot of activity taking place across a range of renewable technologies at the moment.
Look at the opportunities which are emerging in the offshore renewables sectors. Earlier this year the Crown Estate announced "Exclusivity Agreements" for the development of new offshore wind capacity at 10 sites within Scottish Territorial Waters around Scotland. These developments have the potential to provide a staggering 6.4 Gigawatts of new renewable capacity.
In addition there are the two identified Round 3 sites bordering on Scottish waters. Bringing these projects to fruition will be a huge technical and logistical challenge for developers. However, with Scotland's experience of the Beatrice demonstrator project - and our well established skills in the oil and gas sector - Scottish companies are well placed to rise to the challenge. And to make the most of the infrastructure and supply chain opportunities to reap the economic benefits for Scotland.
To help support the development of the sector, the Scottish Government has established the Offshore Wind Industry Group with the key public and private players. I'm confident this group will take forward the actions necessary to ensure Scotland sees the emergence of a thriving offshore wind industry in the coming years.
Initial work on 10 sites within Scottish Waters will run in parallel with a Strategic Environmental Assessment for offshore wind - commissioned by Marine Scotland, and which, through the strong lead from Marine Energy Spatial Planning Group (MESPG), will be prioritised for completion early in 2010.
The Crown Estate has also received expressions of interest in developing marine energy in the Pentland Firth - home to the most powerful tidal energy resource in Europe.
Wave and tidal energy remain one of Scotland's greatest opportunities. We know that other countries harbour similar aspirations to develop these technologies. We can't afford to be complacent. That's why I welcome the terrific efforts taking place at the moment to realise this great potential.
The Scottish Government is collaborating with technology developers, utilities, the grid owners, the Crown Estate and others - under the Marine Energy Group - on a road map for wave and tidal power. This will establish the costs and challenges in realising our ambitions but will focus on the size of the prize.
We're also meeting the marine environment and planning issues head on, making sure again that all the right voices are being heard.
We know that the sector needs extra support. That's why I'm delighted to announce today that we have now laid an amendment to our renewables legislation which will, with the Parliament's agreement, increase support for wave and tidal power to 5 and 3 ROCs.
This follows on from our consultation last year. It sends a powerful and long-term signal to those in the sector and those looking to invest in these technologies.
Saltire Prize
Developing the industries of the future here in Scotland - and exporting our expertise and technology overseas - can ensure Scotland makes a global contribution to tackling climate change, as well as meeting our own energy targets.
We launched the £10m Saltire Prize - the largest single innovation prize for marine renewables - only 5 months ago. We have now received over 100 registrations of interest from 23 countries across the globe.
We believe that this is a great example of a small country making a big difference to one of the great remaining challenges - harnessing the power of our oceans.
The seas around Scotland are some of the most energetic on the planet and we are determined to make the most of this tremendous natural resource.
We believe the Saltire Prize will be transformational - challenging the brightest and the best minds worldwide to unleash their talents and push the frontiers of innovation in marine energy.
It will also build on Scotland's reputation for excellence in science, and could help encourage school leavers to think green when considering their career path.
Hydrogen and Fuel Cells
Marine and other renewable technologies could have their future development greatly enhanced by advances in storage.
We have a number of excellent hydrogen and fuel cell centres, including the Pure Project in Unst, St Andrews Fuel Cells, and the Western Isles Hydrogen Project.
These technologies could change the way we think about, use and store energy in future. The Scottish Government is supporting the Hydrogen Future Conference to be held in Edinburgh in September, and I am pleased that the sector is well represented at All Energy this year.
Renewables Action Plan
So far I've covered a number of technologies and a range of initiatives and activities. Keeping all of this coherent, complementary and in sight is a big challenge, and one which the Scottish Government is meeting head on.
We will publish our Renewables Action Plan this summer. This will chart the course and actions over the next 24 to 36 months which will ensure that 20 per cent of Scotland's energy is met from renewables by 2020. Many people here today, and elsewhere across Scotland and beyond, have helped us put this plan together. We're grateful for that.
Publishing the Action Plan isn't a full stop - we need to continue to work together, to make sure that our strategy evolves and that we're always looking beyond the short term to the horizon.
At the heart of the Action Plan will be road maps for the development of all sectors, including heat and transport. We will be measuring progress along these paths, not only in megawatts generated, but in jobs created and tonnes of carbon displaced - so that all three wins of energy security, economic benefit and climate change mitigation are addressed.
Renewable Heat
We are proposing a major step forward in the use of renewable heat. To help understand where we need to target support we commissioned work into quantifying the current level of renewable heat in Scotland. The interim findings suggest that just under 1.4% of Scotland's total heat use is renewable.
But we are also seeing major industrial developments, particularly in bioenergy, being proposed. With support from the Scottish Government, the Tullis Russell paper mill last year announced plans for a £100 million biomass Combined Heat and Power plant. And the whisky distiller, Diageo, is building a new bioenergy facility.
If we factor the plants under construction into the assumptions then the percentage increases to 2.7%.
This is a strong basis on which to build a viable renewable heat sector in Scotland - one that puts Scotland well ahead of the UK.
I am pleased to announce today that over £1.6 million of funding has been awarded to support 26 businesses to install biomass systems under the first round of the Scottish Biomass Heat Scheme. I am also announcing that the second round of the scheme is now open with around £1.6M available. The closing date for applications is 4 September.
The Action Plan will show us where we are at the moment, and will help us project with confidence the levels and targets to which we should be aiming.
Energy Efficiency
We have been accused recently of treating energy efficiency as the Cinderella of the energy debate. That is simply not the case, and we are clear that reducing demand and increasing efficiency is at the top of the energy hierarchy.
We have included a commitment in our Scottish Climate Change Bill to produce an Energy Efficiency Action Plan, and to report on this plan annually to the Parliament.
There is no requirement for us to set this in statute as we can undertake action in this area without the need for legislation. But by making this a legal requirement it ensures energy efficiency is given the priority it deserves by this and future Governments in Scotland.
We have published an outline of these measures and intend to publish the final plan by the end of the year following final consultation in the summer.
However this does not mean that we are not taking action now.
We are providing practical advice and support for people - and businesses - facing high energy prices and looking to reduce their carbon footprint.
We have a dedicated budget this year and next of around £18 million for Energy Efficiency and Microgeneration advice and support for the domestic, business and public sector.
This is in addition to the funding provided for the Energy Assistance Package and the new funding announced in the budget for the area based Home Insulation Scheme.
In addition our Climate Challenge Fund - £27 million over three years - is supporting communities to take action to reduce their carbon emissions, including by making better use of energy.
Carbon Capture and Storage
The safe capture and storage of harmful emissions is a prerequisite for a safe and sustainable world. Earlier this month the First Minister launched the findings of the first comprehensive study of Carbon Capture and Storage to be undertaken in the UK - research supported by the Scottish Government. The report signals a milestone in Scotland's energy policy, underlining just how Scotland can be at the vanguard of this vital technology.
We have unparalleled storage potential in the North Sea, serious candidates for demonstrators in Scotland, and skills in our industry and universities to make this happen soon. The next step is to publish a roadmap setting out the key milestones for the development of CCS in Scotland. This is due to be published in the summer.
I would like to add just how important progress in this area is to our common interests in developing low carbon energy. Not only for Scotland and the UK, but also for the world as a whole in the run up to the Copenhagen Climate Change summit, given the importance of coal to energy generation worldwide.
I was pleased to run a session with industry and Government players from all over Europe during sustainable energy week in Brussels last February and know how important joint working will be to achieving our shared goals in this area.
I am particularly pleased that the UK Government has recognised the importance of this in its recent policy announcement on clean coal and look forward to working closely with them as they prepare for public consultation on the funding of CCS demonstrators in the summer.
Sub - Sea Grid
The Scottish Governments commitment to renewable energy development is not just confined to our own borders.
Vital to exploiting Scotland's competitive advantage is the development of sub sea grid in both the North Sea and off the west coast of Scotland. This will provide the means for the transport and export of Scotland's huge renewable energy surplus.
The North Sea grid has been recognised by Europe as one of its energy infrastructure priorities, and the Scottish Government is now a key partner on the European working group planning for this major development.
Building on our links through the British Irish Council, we are also working with the Government of Ireland and the Northern Ireland Executive on a feasibility study on delivering an offshore grid in the Irish Seas. We are currently in the process of commissioning this work, which will report by September 2011.
We are also pursuing this vision through the Energy Technology Partnership at Strathclyde University.
Scottish European Green Energy Centre
To build on such links with Europe, over the past 12 months, the Scottish Government has been working to establish the Scottish European Green Energy Centre. The Centre - which will play a pivotal role in positioning Scotland at the heart of research, development and deployment of low carbon technologies across the EU - will open this summer.
The Centre's work will complement and add value to that of existing organisations and will work in parallel with the Energy Technology Partnership, to support projects being developed by them.
I am delighted at how energy researchers and academia have worked together to create the Energy Technology Partnership as a world leading federation of energy researchers. It will be a key partner for the Green Energy Centre.
The Centre's capacity to act as both a centre for the facilitation of R & D projects and as a centre for policy expertise means that it will be able to translate and broker discussions and partnerships between SMEs, researchers, policy-makers, industrial associations and the EU institutions.
The recent adoption of the EU's economic recovery programme, with its emphasis on supporting energy projects in fields such as Carbon Capture, offshore wind and offshore grid development, gives special impetus to its work.
I'm therefore delighted to announce that Duncan Botting, Chief Executive of ITI Energy, has agreed to act as Executive Chair as the Centre gets up and running. Duncan has extensive experience in European collaborative work in energy and will bring real skills and enthusiasm to its work. I'm delighted he has agreed to do this and wish him and his colleagues well in their important work.
I'd like to add that this afternoon at 2pm, the Green Energy Centre will be hosting a session entitled Scotland's Offshore Wind Story. I hope many of you can attend to hear of Scotland's real skills in this area.
Conclusion
Ladies and gentlemen, I will draw my remarks to a close here with an assurance that the Scottish Government is committed to driving forward Scotland's energy sector.
We will continue to work with our key stakeholders at home to continue the progress which I have outlined today. And to work with our international partners to meet the global clean energy challenge.
Thank you.