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3. The Role of Government
Leadership, coordination and communication
Figure 2: Current structures
Scottish Government Objectives:
- to provide unambiguous backing for the renewable energy sector, driving progress and identifying and overcoming obstacles to energy generation, business success, jobs growth, and carbon reductions;
- to coordinate and facilitate the highest degree of partnership working across the public sector, with increasing alignment behind the Government's renewables objectives, and our binding Climate Change obligations;
- to provide the most coherent interface possible with the private sector, building on the strong existing connections between agencies and organisations, including public/private partnership working in key areas such as technology development;
- to reinforce the role of the Energy Advisory Board, and its Renewable Energy sub-group the Forum for Renewable Energy Development in Scotland ( FREDS), as the "centre of gravity" for renewables in Scotland;
- to lead by example in exploiting renewables potential on the public estate.
Case Study: Leading the way on the Scottish National Forest Estate - Recent studies show that the untapped potential for wind and hydro developments on the publicly owned national forest estate in Scotland could amount to several GW - or collectively the equivalent of one of the largest on-shore windfarms in the world.
- The Scottish Government is of course determined to develop an exemplary process to exploit the renewables potential within its own estate. The multi- GW estimate is an indication of the power available - safeguarding the environment will naturally limit the eventual scope of developments.
- Objectives are to capitalise on the natural energy resource, maximising potential carbon reduction in harmony with the environment, and to provide maximum direct benefit to the economy, at both national and local levels, in terms of income generated, and jobs created.
- Through the Climate Change (Scotland) Bill, Ministers are seeking powers to allow Forestry Commission Scotland to take a more strategic approach to realising this potential.
- An excellent opportunity exists to establish new, mutually beneficial models for public/private/local partnership, and concrete options under consideration include the formation of companies and joint ventures with developers and local communities.
- Decisions will be taken with community interests to the fore, with a project team currently developing options, and decisions on progress to be announced later in the year.
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Public sector power goes greener The Scottish Government is leading by example - negotiating a new electricity deal that will save taxpayers up to £10 million a year and help public bodies go greener. Scottish Power and SSE have been awarded innovative new contracts to supply renewable electricity. They're available to the whole public sector whose electricity spend is around £200 million a year. A large proportion will come from the Whitelee wind farm, currently the largest onshore wind farm in Europe and Glendoe, the new hydro electric scheme which is Scotland's first conventional large scale hydro electric power station for 50 years. There is also access to a range of low carbon and renewable technologies, such as combined heat and power, solar and biomass. All public bodies including every council, health board, university and college can take advantage of the contracts from this autumn. |
Scottish Government Progress to date:
- Over the past 8 months, the Scottish Government has more than doubled the staff resource within its energy teams (from around 30 to around 60 people, including energy consents).
- A new Renewable Energy Division was created in September 2008, with 3 teams covering energy consents and deployment, on-shore renewables, strategy and communications, and off-shore renewables.
- Simultaneously, the expansion of the Energy Markets Division has increased the Government's capacity and ability to engage with the energy efficiency agenda, European institutions, carbon capture and storage ( CCS), and the electricity transmission grid.
- New and refreshed industry groups have been set up to establish the necessary flow of information between public and private sectors, to map needs and agree on required actions.
- The Energy Advisory Board has met for the first time.
Securing Inward Investment in the Face of Global Downturn - In 2008, Scotland was named European Region of the Future by the Financial Times Foreign Direct Investment magazine, over 38 other European Regions.
- Scotland scored highest in terms of economic performance, HR, IT and telecommunications, transport links, quality of life and FDI promotion strategy, with Edinburgh, Glasgow and Scotland featuring in the top ten 'Most Business Friendly' cities or regions in Europe.
- Scottish Development International is turning this potential into reality, recording its 3 rd highest ever figure for High Value Added jobs in 2008-09.
- During the same period the Scottish economy saw over £500 million of commitment from companies in the form of capital expenditure and salaries and over 4,000 jobs created/safeguarded through SDI's activities.
- With 30% of all SDI projects representing first time Scottish investment, confidence in Scotland amongst international investors is clearly robust.
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Scottish and UK structures
The Scottish Government is continuing to engage very closely with the UK Government on the shape and scope of renewable energy legislation and the financial incentives which they create. This engagement is long standing, and traces back to the introduction of the Renewables Obligation ( RO) mechanisms across the UK in 2002. The Scottish Government, with its Renewables Obligation (Scotland) legislation, believes fully that this constructive approach has delivered great benefits, with the separate ROs combining to create a fluid and powerful market for renewable electricity that has delivered hundreds of MW of new capacity across the country. At the same time, Scottish Government has acted independently where there is a strong case for us to do so - such as in the introduction of higher support levels for wave and tidal power.
With banding now in place, we are working with UK colleagues on the further changes to the RO required to align it with the demands of the EU 20% target, as well as on the emerging details of a feed-in tariff mechanism for microgeneration and a renewable heat incentive. These are complex issues, and we are determined to ensure that Scotland's voice is heard and our interests reflected in the final analysis. We will be consulting on these matters during the coming months.
Renewables - Financial Incentives
Mechanism | Scottish Position / Input | Timeline |
|---|
Renewables Obligation Scotland ( ROS) | - Separate RO covering Scotland, made using devolved powers;
- Scottish RO works alongside UK equivalents to create strong UK market for renewable electricity;
- Scottish RO has incorporated higher support for wave and tidal power since April 2007.
| - Banding introduced to ROS in April 2009;
- Amendment to ROS on higher wave and tidal support introduced June 2009;
- Consultation on further changes to UKRO and ROS (taking EU 20% target into account) due to publish in Summer 2009.
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Feed-in Tariff ( FIT) | - FITs made possible through changes introduced by Energy Act 2008;
- Reserved matter - required legislation will be delivered at UK level;
- Ministers to be consulted on details as they emerge.
| - FITs slated to take effect from April 2010;
- Consultation on details due to publish in July 2009.
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Renewable Heat Incentive ( RHI) | - Reserved matter - required legislation will be delivered at UK level;
- Ministers to be consulted on details as they emerge.
| - RHI not expected to take effect until 2011;
- Preliminary consultation due to publish in July 2009.
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Scottish and EU structures
In Spring 2007, European leaders reached a historic agreement for the first time to create a common European energy policy. The resulting Energy Policy for Europe sets out the EU's vision for Energy in the period to 2020 and is based on three fundamental 'pillars':
- sustainability;
- security of supply;
- competitiveness.
The EU's Energy Policy for Europe presents Scotland with major opportunities to capitalise on outstanding potential, an estimated 25% of Europe's offshore wind and tidal potential and 10% of wave potential. The commitments made by EU leaders and by the EU institutions have now set out concrete proposals for renewable energy, carbon capture and storage, and the development of new grid infrastructures where Scotland has significant potential to play a leading role in delivery. When taken together, the proposals set out in the package on CCS, the development of offshore renewable energy, the construction of a North Sea Offshore Grid, and with the considerable remaining reserves of North Sea oil and gas, show that Scotland is ideally placed to play a central role in ensuring the security of Europe's energy supplies in future.
The Scottish Government wants Scotland to be at the heart of Europe's low carbon energy revolution. We are working to forge European partnerships through the creation of the Scottish European Green Energy Centre ( SEGEC). We are also achieving this through collaboration with the Energy Technology Partnership ( ETP) of Scotland's universities; through joint work with Scotland Europa, the Enterprise Agencies and industry in the Scottish EU Energy Network; and by working closely with the European Commission to deliver EU-wide priorities.
Infrastructure and accessing EU funding The growing recognition and prominence of Scotland's renewables sector in the European context is strongly underlined by critical recent developments. As part of their Economic Recovery Package announced in March the Commission has announced a proposed list of projects that would benefit from European co-funding. In the energy sector the list includes several projects of huge significance to Scotland including the development of the North Sea offshore grid (€165 million), the development of an offshore wind test centre in the Aberdeen area (€40 million), and enhanced financial support for CCS demonstration (€180 million for up to 4 UK potential projects, one of which is Longannet). |
Scotland is now part of the European Working Group on North Sea Grid Connections and is now also represented on the European Working Group on Sustainable Fossil Fuels - on carbon capture & storage.
The Commission has most recently published its Directive on Renewable Energy, and the Scottish Government is undertaking work to see how this can be used to help Scotland's renewables sector, particular in terms of regulation of the grid.
The Prize
The Scottish Government is determined to lead by example and to establish the right structures for coordinated engagement and support to allow the renewables sector to grasp the unique opportunity now before us and to deliver to 2020 energy targets.
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