2020 Routemap for Renewable Energy in Scotland

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1. Scotland's Renewables Ambition and Paths to Delivery

1.1 Securing the Benefits for Scotland

1.1.1 Overview and scope of Routemap

Over the next decade to 2020, renewables in Scotland could provide:

  • up to 40,000 jobs 1 and £30b investment to the Scottish economy;
  • significant displacement and reduction in carbon emissions;
  • a strengthening of future energy security through the harnessing of sustainable indigenous resources;
  • and a transformational opportunity for local ownership and benefits.

The Scottish Government is determined to ensure that Scotland benefits from the low carbon opportunity, and renewable energy is at the heart of that ambition. Scotland already meets nearly 30% of its electricity demand (equivalent), and nearly 3% of heat from renewable sources. Both rates lead the way in the UK.

We are now committed to generating an equivalent of 100% of electricity demand from renewable sources by 2020, along with at least 11% renewable heat.

Scotland's 100% renewables target is the most ambitious in the European Union. Meeting 100% of our electricity consumption from renewables in 2020 means that, together with our 11% renewable heat and 10% renewable transport targets, Scotland's overall share of renewable energy will be at least 30% by 2020. This exceeds the EU's 2020 renewable energy target of 20% and will be double the UK's agreed EU target of 15%. In reaching 30% renewable energy by 2020, Scotland's target is on a par with that for Denmark (30%), Portugal (31%), and considerably higher than Germany (18%), Ireland (16%), Spain (20%) and France (23%).

And our ambition is clear - that with the largest offshore renewable energy resources in the EU (25% of EU offshore wind; 25% of EU tidal; and 10% of EU wave power), Scotland will be making an even greater contribution to the EU's overall target than our population size. This is why we have developed clear links with our neighbouring governments in Ireland, Northern Ireland and across the North Sea to promote the development of offshore grid connections to harness the vast renewable energy potential of the North and Irish Seas. The Scottish Government is pleased that the EU has now recognised these offshore grids as priority infrastructure projects, and will work with governments and industry to ensure deployment can take place rapidly over the next decade. It is also why we are working with governments in Spain, Portugal and Ireland to ensure greater EU support for the EU's vast marine energy resources located on its western seaboard. We want to make sure that these technologies can be commercially deployed during the 2020s, following full scale demonstration during the 2010s.

The scale of investor interest in Scotland's offshore renewables leasing is one of the largest in Europe (12 GW), and shows clearly that our target is viable and deliverable. The decision by large member states such as Germany and Italy to abandon nuclear power can only mean a larger market for renewables in future. Scotland will be a leading player in this market - exporting electricity directly to the EU through new grid interconnections; and through Scottish companies exporting our technical expertise and products for deployment in EU markets.

On transport, as well as having a 2020 target of 10% of transport fuels from renewables, the Scottish Government is committed to achieving complete decarbonisation of road transport by 2050, with significant progress by 2030 through wholesale adoption of low and ultra low carbon vehicles. While the focus of the this Routemap is on energy as electricity and heat, this is not to overlook the role of transport fuels and demand in the renewable energy mix, and a synopsis of policy to promote the use of renewables in transport is at 1.5.

A full exposition of Scottish Government policy to promote low carbon transport is being developed and will be published later this year.

1.1.2 Economic benefits

Renewable energy is identified as a key element of the Low Carbon Economic Strategy published last year.

With as much as a quarter of Europe's offshore wind and tidal energy potential and an estimated 10% of its capacity for wave power, Scotland is well placed to become the continent's green energy powerhouse.

A valuation of the UK's offshore renewable energy resource published in May 2010 estimated that Scotland has 206 GW of practical offshore wind, wave and tidal resource - almost 40% of the total UK resource.

Harnessing just a third of our offshore renewable energy potential could meet Scotland's electricity needs seven times over by 2050. The net value of this amount of energy, in terms of electricity sales, would be £14 billion by 2050.

The large scale development of offshore wind represents the biggest opportunity for sustainable economic growth in Scotland for a generation, potentially supporting up to 28,000 directly related jobs and a further 20,000 indirect jobs and generating up to £7 billion for the Scottish economy by 2020.

Resolving the current, anachronistic arrangements for management of the seabed will help Scotland realise the full potential of its enormous offshore renewable energy resources. Legislative competence over the management and revenues of the Crown Estate - which includes the seabed out to 12 nautical miles - should be devolved to the Scottish Parliament and these public assets managed in a way that brings direct benefit to Scotland and its local communities. The Crown Estate Commissioners' responsibilities to issue leases for renewables and CCS projects from 12 to 200 nautical miles should also be devolved, enabling integrated management and planning of Scottish seas.

1.1.3 Carbon Benefits

The displacement of fossil fuel heat and power generation by renewables is key to reducing our carbon emissions.

Our Climate Change Act ( http://www.legislation.gov.uk/asp/2009/12/contents) sets world leading targets for at least a 42% cut in greenhouse gas emissions by 2020 and at least an 80% reduction by 2050. Growing the economy and cutting emissions is possible. In 2008, emissions in Scotland had fallen by 21% compared to 1990, reaching the half way point towards our target of a 42% emission cut by 2020. Energy efficiency is critical in this regard.

Making the transition to a sustainable low carbon Scotland is a huge challenge that will need everyone to contribute. The prize is securing our future: for our economy, for our environment, and for generations to come.

1.1.4 Energy Security Benefits

In an uncertain world where energy markets can be volatile and subject to wider political forces, maximising Scotland's own security of supply will be vital; and utilising our own indigenous sources of renewable energy will provide an important element of our overall energy security. Indeed, our rich resources of wind, wave, water and biomass, harnessed efficiently and in harmony with the environment, can help Scotland achieve energy independence.

Renewables play an important role in strengthening security of supply, as part of a wider energy mix which will include decarbonised thermal generation. See section 1.2.4.

1.1.5 Community Benefits and opportunities for local ownership of energy

Scottish Ministers are determined to see the benefits from our indigenous energy resources flow through to the people of Scotland. In particular there is an opportunity for a transformation in the level of local ownership of energy.

We are setting a specific target for local and community ownership of 500 MW electricity by 2020.

This level of energy generation in community hands, as well as making a significant contribution both to energy security and the achievement of our renewable electricity target, could represent up to £225mFITS revenue per year by 2020 going directly to local communities. The scale of potential local benefit is unprecedented and such revenue streams could play an important part in developing wider community asset ownership - which is a priority for the Government.

We are starting from a high baseline: Scotland is recognised as leading the way on community renewables in the UK. Not only have we supported community energy ownership through tailored schemes since 2003, resulting in over 800 projects across Scotland, but we are now also setting the benchmark for rates of community benefit offered in commercial schemes through our expectations of commercial developments on the public estate.

1.1.6 Framework for success

Over the past four years, we have already put in place much of the framework for future realisation of these benefits including:

Renewables Action Plan (2009-11)

- a rolling update outlining short term actions require to progress towards 2020 renewables targets

http://www.scotland.gov.uk/Publications/2009/07/06095830/0

Renewable Heat Action Plan (2009)

- a plan for the promotion of the use of heat from renewable sources.

http://www.scotland.gov.uk/Publications/2009/11/04154534/0

Roadmap for Scotland's Marine Renewables Industry(2009)

- assessment of the status and potential of the marine energy industry in Scotland, alongside recommended actions to ensure its continuing growth

http://www.scotland.gov.uk/Publications/2009/08/14094700/0

Marine (Scotland) Act 2010

- introduces a statutory framework for marine planning at a national and regional level as well as a streamlined marine licensing process. http://www.legislation.gov.uk/asp/2010/5/contents. Marine planning will be supported by Scotland's Marine Atlashttp://www.scotland.gov.uk/Topics/marine/science/assessment/atlas

Low Carbon Economic Strategy (2010)

- strategy to maximise job and wealth creation opportunities in Scotland while tackling emissions

http://www.scotland.gov.uk/Publications/2010/11/15085756/0

National Renewables Infrastructure Plan ( NRIP) (2010) - outlines the investment required to deliver Scotland's ambition to become a premier location for the manufacturing and deployment of wind turbine and marine energy devices

http://www.hie.co.uk/highlands-and-islands/key-sectors/energy/n-rip.html

Scotland's Offshore Wind Route Map (2010)

- makes a series of recommendations to develop the offshore wind sector in Scotland

http://www.scotland.gov.uk/Publications/2010/09/28115850/0

Energy Efficiency Action Plan (2010)

- helping Scotland reduce energy consumption; maximising opportunities for micro­renewables and reducing fuel poverty

http://www.scotland.gov.uk/Publications/2010/10/07142301/0

Draft Electricity Generation Policy Statement (2010)

- sets out the overall objectives of Scotland's electricity policy, charting a clear path to ensuring a decarbonised, secure energy supply by 2030 through: increased deployment of renewables, progressive adoption of CCS, phasing out of nuclear, grid enhancements, and improved demand management.

http://www.scotland.gov.uk/Publications/2010/11/17094217/0

Low Carbon Scotland - Meeting the Emissions Reduction Targets 2010-2022 (2011)

- this report on proposals and policies sets out how we can meet our emission reduction targets in the most cost effective and sustainable way

http://www.scotland.gov.uk/Topics/Environment/climatechange/scotlands­action/lowcarbon/rpp

Blue Seas - Green Energy A Sectoral Marine Plan for Offshore Wind Energy in Scottish Territorial Waters (2011)

- sets out Scottish Ministers' policies for offshore wind development in Scottish Territorial Waters

http://www.scotland.gov.uk/Publications/2011/03/18141232/0

1.1.7 Achievements to date

Under the framework above, we have already achieved so much. Indeed, in the past four years Scottish Ministers determined a total of 50 energy applications, including consent for 42 renewable projects worth over 2 GW of capacity.

This puts Scotland in a strong position in terms of deployment:

Achievements to date

Underlying this progress, support for the sector was focussed as follows:

  • £13 million WATERS fund - Wave and Tidal Energy: Research, Development and Demonstration Support fund for the development and testing of new prototypes in Scottish waters.
  • £10m Saltire Prize for marine energy is one of the world's largest ever innovation prizes and has generated 153 registrations of interest from 31 countries across the world.
  • Further Scottish Marine Leasing Round to support the Saltire Prize announced in September 2010 creating new opportunities for Saltire Prize competitors.
  • £70 million National Renewables Infrastructure Fund to ensure Scotland reaps the huge financial benefits of offshore renewables. This fund is in addition to Regional Selective Assistance ( RSA) and other funding available for companies.
  • The Scottish Biomass Heat Scheme, which targets SMEs, has been crucial in maintaining momentum in the sector with over £2.6 million paid to 44 projects delivering 10 MW (thermal) of capacity, with annual CO 2 savings of over 10,000 t CO 2-equivalent.
  • Since May 2007, over 800 grants for community renewables, worth over £16M, have been allocated under the Community And Renewable Energy Scheme ( CARES) and the previous Scottish Community and Householder Renewables Initiative ( SCHRI).

Other key developments

  • Granted consent for Beauly-Denny overhead line upgrade in 2010: the most significant electricity infrastructure project in Scotland in a generation.
  • Scottish Government leading on British Irish Council marine energy and electricity grid work streams.
  • Working with the EU North Sea Grid Coordinator (Adamowitsch) and the North Sea Countries Offshore Grid Initiative on the EU Memorandum of Understanding on developing North Sea grid;
  • Working with the Governments of Ireland and Northern Ireland in the Irish Scottish Links in Energy project, assessing opportunities and challenges for offshore interconnected grid in the Irish Sea.
  • Established Scottish European Green Energy Centre ( SEGEC) in Aberdeen, which in its first year delivered over 100 million Euros of EU investment.
  • Energy Technology Partnership ( ETP), established in 2009, is the biggest collaborative research activity of its type in Europe, comprising around 250 academics from multidisciplinary backgrounds, with over 700 energy related researchers across the partner institutions.
  • Raised the bar for community benefits from commercial renewables developments by requiring a rate of £5,000 per MW from new wind and hydro developments on the National Forest Estate - twice the standard industry rate.

Moreover, recent announcements of investment in Scotland maintain the momentum - from Consent for the world's largest tidal stream array (a Scottish Power Renewables facility to be built in the Sound of Islay), to Doosan Power Systems' decision to base its centre of excellence for renewables in Renfrew. Scotland continues to live up to its claim to be the powerhouse of renewable energy.

But the time is right to review what more can be done and to push further in order to build on our potential, to maintain momentum, and to continue to attract investment to realise our vision. The time is right for a new target.

1.2 Renewable Energy Targets and Energy Mix

1.2.1 EU energy targets and position on deployment across EU to date

The EU has been central to efforts to drive emissions reduction and increase levels of renewable energy across Europe. In 2008, the EU committed to a legally-binding 20% cut in greenhouse gas emissions by 2020 across all member states. This is being delivered by the EU 20/20/20 Climate and Energy Package (20% emissions cuts / 20% renewable energy / 20% energy efficiency by 2020). The EU has committed to strengthening this target to 30% provided other industrialised countries commit to comparable effort and developing countries contribute adequately to global action.

Scotland strongly supports this increased ambition to 30% (which is consistent with our own legally-binding 42% target in Scotland). The Commission's 2050 Low Carbon Economy Roadmap shows that on current policies the EU could meet its current 2020 emissions reduction target of 20%. Fully implementing its 20% energy efficiency target should enable the EU to deliver 25% emissions cuts by 2020. The Communication says that the economic crisis has reduced the cost of meeting the 2020 target and that the most cost effective trajectory is indeed now 25% by 2020, 40% by 2030, 60% by 2040, and 80% by 2050. However, the Communication does not go as far as recommending that the 2020 target should be raised. Scotland is continuing to work with the UK to press for this higher level of ambition.

1.2.2 UK Targets

Under the EU Directive on Renewable Energy, the UK has a target to source 15% of energy demand from renewables by 2020. This is further broken down into 30% electricity; 12% heat; and 10% transport fuels. The UK Government will be publishing a Roadmap for Renewable Energy for the UK based on the achievement of these targets.

The Scottish Government has also committed to ensuring we meet the EU's 2020 renewable energy target of 20% by setting a target to source 20% of energy demand from renewables by 2020. This is further broken down into 100% electricity; 11% heat; and 10% transport fuels. This will go beyond the legally-binding 15% renewables target that the EU has set for the UK under burden-sharing arrangements and shows the higher level of potential and greater ambition for renewables in Scotland

1.2.3 Scottish targets

Scotland's ability to supply sufficient renewable electricity and heat to meet its targets in a cost-effective way depends critically on reducing demand. High demand requires more generating capacity to be built. Owing to uncertainties over individual behaviours, electricity demand could vary but it is likely to rise in the long term as greater use is made for transport and heat - therefore energy efficiency measures to minimise this rise in demand will be crucial if electricity is to remain affordable.

The Energy Efficiency Action Plan established a target to reduce total final energy demand in Scotland by 12% by 2020, covering all fuels and sectors.

Variation in the mix of fuels that make up final demand will depend on a number of factors including consumer choices, strategies taken by companies to meet the Energy Company Obligation, and individual behaviour.

Energy efficiency is at the top of our hierarchy of energy policies as the simplest and most cost-effective way to reduce emissions whilst seeking to maximise the productivity of our renewable resources. Energy efficiency complements our other energy-related strengths, and works across areas such as housing, business, and transport, all of which are major consumers of fuel, to help us create a more sustainable Scotland with opportunities for all to flourish.

Hence the actions set out in the full Renewables Routemap will be taken in tandem with our continuing drive to reduce demand.

Because the pace of renewables development has been so rapid in Scotland, with the nation now on course to exceed its milestone of 31% of electricity demand to be sourced from renewables by the end of this year, we can now commit to a new renewable electricity target.

Our new target is to generate the equivalent of 100% of Scotland's own electricity demand from renewable resources by 2020.

By then we intend to be generating twice as much electricity as Scotland needs - just over half of it from renewables, and just under half from other conventional sources. We will be exporting as much electricity as we consume.

This new target, roughly equating to 16 GW of installed capacity, is based on the fundamental wealth of renewables resource available; our analysis of deployment trajectories on the onshore side (see 1.3); and our concerted efforts to ensure a supportive policy framework for growth - particularly to realize our offshore energy potential.

Increasing our target for renewable electricity means that we are also able to increase our overall renewable energy target.

We are now aiming to meet at least 30% of demand for energy from renewable sources by 2020.

Scottish Ministers are not alone in the belief that such ambition is justified. The scope for a new electricity target has been endorsed by industry leaders in a recent (April 2011) open letter:

Scotland's renewable industry has made significant progress in recent decades and an ever increasing share of our electricity consumption is now generated by renewable sources with more coming online every month.

It is important that we continue to build on that. Scotland is already establishing itself as a world leader in renewables technology because of our engineering skill base, government commitment and the potential of our vast natural resources.

The target of 100% renewables by 2020 that has already been backed by a number of industry leaders, academics and politicians is ambitious but achievable. This means that Scotland will by then produce around twice the electricity that we consume with just over half coming from a variety of renewable sources.

It is vital that we maintain momentum on our renewables industry and continue to send out a clear message to act as a magnet for the capital investment needed to realise the vision. The 100% target will focus the minds of politicians, planners and industry bringing the certainty and leadership that will help attract further jobs and investment.

Scotland is well placed to meet the opportunities provided by the shift to the low carbon economy and the 100% target is another vital step in that journey.

Keith Anderson, Chief Executive Officer, Scottish Power Renewables,
Allan MacAskill, Business Development Director SeaEnergy Renewables,
Roy MacGregor, Chairman, Global Energy Group,
Martin McAdam, Chief Executive Officer, Aquamarine Power,
Richard Yemm, Chief Technical Officer, Pelamis Wave Power,
David Maxwell, Steel Engineering, Managing Director,
John Robertson, Managing Director at Burntisland Fabrications Ltd

Moreover, the ambition for a 100% target has been further endorsed (19 May 2011) in a public statement by Scottish Renewables as follows:

The renewable energy industry has come a long way in twelve years. Building on the hydro legacy of the post-war years, it has embraced onshore wind, cultivated the embryonic wave and tidal sector, pioneering deep-water offshore turbines and harnessing existing and new bioenergy solutions. With over a third of Scotland's electricity now produced from renewable sources, it has surpassed targets for both 2010 and 2011 for renewable electricity generation. Currently, if you take into account developments in operation, construction and with consent to build, renewables will provide over half of Scottish electricity demand.

100 per cent of electricity demand is ambitious, but it will require around half of the existing plans for offshore wind agreed with The Crown Estate, around a quarter of the wave and tidal agreements, steady growth in onshore wind, and modest increases in hydro and biomass to hit this target.

But the Scottish Government does not underestimate the scale of the challenge. Meeting the equivalent of 100% of Scottish demand for electricity from renewables within the next 9 years will be a huge challenge, and will be heavily dependent on regulatory processes which we will seek to influence but over which currently we do not have control.

A synopsis of the main challenges is as follows:

TYPE OF CHALLENGE

100% RENEWABLE ELECTRICITY TARGET

SCALE OF OVERALL CHALLENGE

Target requires a sustained annual renewable deployment rate of more than twice that ever experienced in Scotland, and thus will depend upon installation of large-scale offshore wind schemes.

ELECTRICITY MARKET REFORM

Higher deployment rates may require extended and additional technology support. They may also possibly require extra innovation spend for wave, tidal and even offshore wind.

Extra costs of future grid balancing activities required for high renewable penetration, including incentivisation for storage.

TRANSMISSION BOUNDARY AND INTERCONNECTION

Need to make case for additional interconnection and grid upgrade over and above existing ( ENSG) proposals and have these in place by 2020.

CONSENTS AND PLANNING

Further increase in consenting/deployment rates required especially for offshore wind - in harmony with environment.

Need to ensure that, as renewable penetration increases onshore, environmental and land use consideration are not compromised.

SUPPLY CHAIN & INFRASTRUCTURE

Further work with the economic development bodies to promote supply chain and other economic benefits from low carbon energy development.

Further and faster support needed for infrastructure, while considering the potential external constraints that high renewables penetration could trigger, e.g. steel availability / prices and vessel availability.

The Scottish Government continues to work hard to ensure that the regulatory framework for support for energy, currently being devised at a UK level, takes full account of the contribution Scotland can make on renewable energy, and that it nurtures our aspirations to their full potential. The Scottish Government's response to the public consultation on the electricity Market Reform proposals can be found at: http://www.scotland.gov.uk/Topics/Business-Industry/Energy/Infrastructure/Grid­Connections/EMR-consultation-UK/EMR-consultation-UK

We also recognise the importance of ensuring that Scotland's ambitions for renewable energy are not pursued at the expense of the wider environment, and we are inviting comments on our new target and policies, and our assessment of the wider energy mix, under a Strategic Environmental Assessment consultation which is being undertaken alongside this Routemap.

1.2.4 Electricity generation mix

We are aiming for an output equivalent to 100% of Scotland's demand for electricity to be met from renewables, but it will be very important to understand that this does not mean Scotland will be 100% depe ndent on renewables generation: renewable energy is part of a wider electricity mix.

The electricity generation mix that we see for Scotland is set out in our ElectricityGeneration Policy Statement which we published as a draft last November and which we are now revising in line with our new target.

As mentioned above, the statement is subject to a Strategic Environmental Assessment, currently open to consultation.

The draft Electricity Generation Policy Statement sets out the Scottish Government's position on the role of renewable electricity and fossil fuel thermal generation (coal, gas, oil) in Scotland's future energy mix, and is being updated in the context of the new target of the equivalent of 100% electricity demand to be met from renewables by 2020. The draft statement gives a clear view on the need for both rapid expansion of renewable electricity across Scotland and the underlying requirement for new or upgraded efficient thermal capacity in this low carbon generation portfolio, progressively fitted with CCS. It confirms our policy to phase out existing nuclear power stations as they reach the end of their operating lives, and shows that all of Scotland's future energy needs can be met without the need for new nuclear power stations. It is based on research studies on future energy supply, storage and demand, and takes account of the changing policy context in Scotland, the UK and the EU since the Second National Planning Framework was published in June 2009.

The draft Electricity Generation Statement sets out new developments and implications in the following four key areas:

  • renewable generation
  • thermal electricity generation
  • energy efficiency
  • transmission infrastructure and interconnection

These developments and implications for electricity generation are then analysed in the light of the latest research studies, including new analysis on the implications of the 100% target.

The thermal generation that will form the baseload of Scottish supply will be decarbonised by our parallel ambitions for carbon capture and storage ( CCS). CCS has the potential to reduce emissions from fossil fuel power stations by up to 90% and will be a vital element of a decarbonised power sector by 2030.

' Opportunities for CO 2 storage around Scotland', published in 2009, showed that Scotland has an extremely large CO 2 storage resource:

  • offshore saline aquifers, together with a few specific depleted hydrocarbon fields can easily accommodate the industrial CO 2 emissions from Scotland for the next 200 years;
  • Scotland's offshore CO 2 storage capacity is the largest in the European Union, comparable with that of offshore Norway, and greater than Netherlands, Denmark and Germany combined.

' Progressing Scotland's CO 2 storage opportunities' published in March 2011, confirms the European significance of Scotland's CO 2 storage resource with more detailed evaluation of the Captain Sandstone (beneath the Moray Firth).

http://www.scotland.gov.uk/Topics/Business-Industry/Energy/Energy-sources/traditional-fuels/new-technologies/SGactionCCS/ScotlandsCO2Storage

As with renewables, Scotland has the opportunity to become one of the world's leaders in the development of CCS. Successful demonstration of CCS in Scotland over the next decade could create up to 5,000 jobs and be worth £3.5 billion to the Scottish economy. Proposals are well-developed for a number of Scottish sites, and Scotland's R&D capability in our universities or test sites (such as the Doosan Power Systems facility in Renfrew) gives us a leading position to develop projects in other markets. The Longannet coal CCS demonstration project is the most advanced in Europe and is likely to secure £1 billion funding from the UK Government. Once fitted with CCS, 2 million tonnes of CO 2 will be saved from Longannet annually - Scotland's largest single emissions reduction in the next decade. And Scotland can also lead in the development of CCS on gas through the proposals to fit CCS to Peterhead power station.

Increasing our ambition on renewables is matched by our ongoing ambition for CCS. That is why the Scottish Government is articulating a clear and unambiguous case for Scottish discretion over funding support under UK Electricity Market Reform, to ensure we can prioritise our support for renewables and CCS in the most appropriate way.

1.2.5 Matching supply to demand: the contribution of intermittent generation to the energy mix

Ministers are committed to ensuring that Scotland continues to have a secure energy supply throughout the transition to low carbon energy, and also want to see increases in Scotland's capacity for electricity import and export to balance renewable intermittency. The Government is aware that output from renewables is variable, and that low probability weather events, such as years with exceptionally low precipitation in hydro catchment areas or exceptionally low wind productivity, happen from time to time, even if infrequently. For example, hydro output in 2003 was 35% lower than in the previous year as a result of exceptionally low rainfall in catchment areas.

Sometimes a wind turbine may be highly productive and in other periods it may produce very little or no power. But wind turbines are not all in one place, they are spread throughout different parts of the country which reduces the probability of many of them being out of action at the same time. Scotland is a windy country, and the probability of the whole of Scotland being without wind is relatively low. Scotland has long been a net exporter of electricity and has enough capacity from other sources to turn to when it is not windy. It is windy enough for most of the year so that wind farms reduce the need for power from other sources and help reduce fossil fuel consumption and harmful emissions. In 2009, renewables met over 27% of Scotland's electricity use, following the steady trend of Scotland's energy supply becoming greener and cleaner. There was a 20% increase in the amount of electricity from renewables on 2008 and Scotland also exported 24% of its electricity. Wind power, alongside other forms of onshore and offshore renewables, provides an electricity supply which is largely emissions-free, and contributes to greater security of supply.

Adding new wind farms to the energy mix has relatively little impact on the back-up already built into the system, in comparison with the electricity the wind farms generate. All generators have a risk of failure and the grid is already designed to cope with sudden loss of power from very large power stations, which happens from time to time, sometimes without any warning. Wind farms, in comparison with other generators, are relatively efficient. Less than half the energy of the coal or gas going into a power station is turned into useful electricity - most of it is wasted and still ends up producing ash, nuclear waste or air pollution. Although wind farm output is variable, it can be forecast with some confidence and be useful as one component of a broad energy mix.

1.2.6 Key Dependencies

As set out at 1.2.3 above, the key dependencies for the achievement of the new Scottish renewable electricity target will be the establishment of an appropriate level of support for deployment together with adequate grid infrastructure. These are both areas that the Scottish Government is working hard to influence. Scottish ambition for renewables and our potential to contribute to wider UK and EU targets both need to be recognised by the UK Government in forthcoming regulatory change.

The UK Government's Electricity Market Reform contains several mechanisms designed to replace the Renewables Obligation. We believe the Renewables Obligation is still fit for purpose and want to retain it, unless an alternative can be shown to improve deployment and maintain Scottish discretion to influence support for renewable technologies. Any Renewables Obligation Scotland ( ROS) replacement must be at least as effective as the current framework of banded ROCs, with levels of support for all renewables capable of delivering capacity and new industries and jobs.

The investment hiatus which has already started must be stopped. If a case is made for a new mechanism, any transition to a new system must enable deployment and maintain momentum in the development of a supply chain. This will require extension of the ROS to 2020.

The UK Government must commit to maintain support for Wave and Tidal energy at around 5 ROCs to 2020, and to a comparable level of support under any successor "Contracts for Difference" ( CfD) regime. This is necessary to enable the sector to break out from prototype/deployment stage into commercial stage. Without it, the sector may repeat its false start of the 1970s.

The Scottish Government needs to have powers over any independent body/system operator established to run the CfD/Capacity Payment mechanisms, and clear accountability links between that body and the Scottish Government.

Moreover our electricity target should not be considered in isolation from other energy and climate change targets all of which create a degree of interdependency. We will be working with industry and other stakeholders to consider whether our existing renewable heat target can be further stretched to encourage deployment. But in carrying out this assessment, we need to be mindful of:

  • the interrelationship between our electricity and heat targets;
  • the impact of transport demand;
  • the underlying dependency on measures to improve energy efficiency and hence reduce consumption;
  • the context of wider carbon reduction targets - where heat and transport will have a larger role than electricity;
  • as well as other economic factors such as cost-effectiveness.

Taking the 100% electricity target and putting this together with existing heat and transport targets provides an opportunity to increase our overall renewable energy target to at least 30%. However, the uncertainties created by the interdependency highlighted above need to be recognised.

Key issues related to this interdependency include:

  • the need to ensure that the limited resource of woody biomass is deployed in the most efficient manner, namely as heat or CHP which demonstrate 90% and 50-70% efficiencies respectively, rather than as electricity-only generation which is 30% efficient. To achieve 100 MW installed capacity of biomass electricity requires a million green tonnes - equivalent to a sixth of the Scottish timber harvest, whereas, the same volume of woody biomass, could fuel 250 MW to 600 MW of heat capacity;
  • moreover policy to promote the use of woody fibre for biomass needs to be balanced alongside the policy to promote low carbon construction and other uses of wood such as by the wood panel sector, which "lock in" carbon to the benefit of wider carbon emissions reductions targets, as well as of course providing value to the Scottish economy. The energy target should not be to the detriment of the climate change target and wider Scottish economy;
  • a growth in the use of heat pumps may increase demand for electricity;
  • similarly if Scotland achieves 10% market penetration of electric vehicles by 2020 as suggested by WWF Scotland in their report "Watt Car", May 2010, an additional 1 TWh of additional electricity production will be required. While this is relatively small in the context of Scotland's renewable generation capacity, it needs to factored in as a demand pressure.

1.3 Analysis of Deployment Trajectories

1.3.1 Renewable Electricity Deployment Trajectories

Figure 1 below demonstrates projections on potential patterns of deployment of renewable electricity capacity in Scotland.

The modelling assumes that it is possible to project future deployment rates on the basis of the progress of existing renewable projects from conception to operation. These historical trends have allowed us to estimate a number of future deployment scenarios by adjusting variables such as the speed of the planning system or the success of the Electricity Market Reform in delivering the incentive structures necessary to support the deployment of renewable electricity capacity in Scotland.

The deployment of renewable electricity capacity depends on a number of complex and interdependent factors and as such these scenarios represent feasible but ultimately uncertain deployment profiles driven by the assumptions adopted.

Figure 1: Projections of Renewable Electricity Installed Capacity Based on Historical Data

Figure 1: Projections of Renewable Electricity Installed Capacity Based on Historical Data

The scenarios modelled in the chart above represent:

A. Deployment projection based upon an extrapolation of the annual deployment levels experienced in 2007-08.

B. Deployment projection based upon an extrapolation of the annual deployment levels experienced between 2009 and the start of 2011.

C. Deployment projection, based on Scenario B above, adjusted for the improvements in the planning/consent system that were introduced in recent years but which have not yet impacted upon actual deployment rates.

D. The 100% target line is a straight line extrapolation between current installed capacity and the estimated levels of capacity required to achieve 100% of gross consumption from renewables in 2020. This hypothetical line is incorporated to identify and acknowledge the scale of the challenge. In reality, it is recognised that deployment will not follow a straight line and would be expected to accelerate towards the latter part of the decade, particularly given the potential magnitude of offshore wind deployment.

1.3.2 Data sources and approach

The data used to underpin the analysis is sourced from the Scottish Renewables database of Renewable Energy Projects. The database collates information on renewable energy projects dating back to 2006. The database can be found at

http://www.scottishrenewables.com/publications/

The approach of applying past trends to project future scenarios is widely used for analysis but relies on the past being a good predictor of the future. However, given the limited historical deployment of some technologies in Scotland, notably offshore wind and marine technologies, this approach risks underestimating the likely deployment of these technologies.

Each of the modelled scenarios places the ambition of the Scottish Government in the context of the very successful levels of deployment seen in recent years. The successful delivery of the capacity required to deliver the equivalent of 100% of Scottish electricity consumption will demand a significant and sustained improvement over the deployment levels seen historically. This approach sets out a number of feasible deployment scenarios but does not shy away from the challenge that this ambition presents.

1.3.3 Renewable heat trajectory

The Scottish renewable heat database was updated in March 2011 to include information (where known) on renewable heat installations which are under construction or in planning. These can be used to provide an estimate of future renewable heat output in Scotland, although there is necessarily a large degree of uncertainty around such figures.

At the micro and small to medium scale, based on data for the Scottish Biomass Heat Scheme, CARES and the Energy Saving Scotland home renewables grants, a further 19 MW of capacity and 41,000 MWh of heat output are expected. This covers micro installations which began operating in 2010, and those which are expected to become operational during 2011 or 2012. A further 69 MW of installed capacity and 487,000 MWh are estimated from large projects which are currently under construction, and around 198 MW of installed capacity and 1,017,000 MWh from large projects in planning.

Were all the projects currently under construction, and 50% of those in planning to come to fruition, in addition to the known micro and small to medium installations, this could bring total renewable heat output in Scotland to an estimated 2,733 GWh a year, or around 4.5% of forecast Scottish 2020 nonelectrical heat demand.

1.3.4 Progress towards 2020 heat target

The update of the renewable heat database indicates that renewable heat output in Scotland approximately doubled between 2008/09 and 2010, from 845 GWh to 1,696 GWh. Large projects under construction or in planning, plus micro and small to medium projects known to have been installed during 2010, could potentially bring total heat output to around 2,733 GWh over the next few years.

Based on the rate of increase from 2008/09 to 2010, Scotland appears to be on track to meet its renewable heat target for 2020 (figure 2).

Figure 2: Indicative interim milestones towards the 2020 target for renewable heat, compared with actual heat output in 2010.

Figure 2: Indicative interim milestones towards the 2020 target for renewable heat' compared with actual heat output in 2010

1.3.5 Caution

In attempting to construct deployment trajectories for both renewable electricity and heat, it is clear that there is a high degree of uncertainty both in terms of the limited historical evidence on which to base projections for the offshore technologies and heat, and in terms of the current wider regulatory uncertainty and the impact of any new regime on the pace and scale of the development of renewables in Scotland.

1.4 Monitoring and Advisory Groups

1.4.1 The legacy of FREDS

Ministers have been grateful for the input of members of the Forum for Renewable Energy Development Scotland ( FREDS) which has been providing advice on policy on renewables in Scotland since 2003. During this time, FREDS has published a series of sectoral reports charting the way forward - from an early identification of the economic potential of marine energy for Scotland (2004) to the seminal report on renewable heat in 2008, which led to the statutory commitment to publish a Renewable Heat Action Plan the following year.

Since 2009, FREDS sub-groups, with over 200 members in total, have played a key role in driving forward activity under the Renewables Action Plan ( RAP) - designed as a transparent and inclusive mechanism to deliver progress towards 2020 targets.

FREDS' achievements in this role include:

  • recommendations on financial barriers to community renewables which led to the design of the groundbreaking CARES loan scheme for communities and the rural sector;
  • hosting of a major stakeholder event to raise awareness of renewable heat;
  • input to the design of new SEPA advice on hydro;
  • development of a common Renewables Skills Framework for Action based on the Renewables Action Plan and with buy-in from the main skills agencies, industry representatives and educational institutes.

Other advisory groups, separate to FREDS, have provided valuable input on offshore energy policy. Outputs from these groups in the last two years include the publication of routemaps for the development of the offshore wind and marine renewables sectors, comprising a series of recommendations and actions necessary if Scotland is to deliver several GW of capacity from these technologies by 2020.

1.4.2 Restructuring to focus on the new challenges

When we published the RAP in 2009, and commissioned FREDS to drive delivery, we signalled the scope to review this structure after 2 years. Our heightened ambitions on renewable electricity and local ownership of energy will require focussed advice, support and commitment from industry and other stakeholders. Hence the time is right to restructure our advisory groups to meet these challenges.

We propose to remodel FREDS into the Scottish Energy Advisory Themed Group on Renewables, with a refreshed membership; a new secretariat from Highlands and Islands Enterprise ( HIE), and a streamlined sub-group structure reflecting priorities for progress.

The new group will sit under the Scottish Energy Advisory Board, alongside the other energy themed groups, including a newly formed Employer Skills Council to replace the existing FREDS Skills Sub Group with a remit to govern the delivery and implementation of the Skills Investment Plan for the Energy Sector.

Scottish Energy Advisory Structure

1.5 Transport

1.5.1 Overview and contribution to energy policy

The transport sector consumes 29% of Scottish final energy use. Emissions from cars and vans greatly outweigh emissions from rail (66% compared to 2% of total UK transport emissions in 2006).

Electric vehicles offer a 'storage' function through the energy storage capacity of their batteries. It is expected that the majority of electric vehicle charging will occur at night at home, and, as such, this will flatten the demand curve. Through the application of smart grid technology it is envisaged that electric vehicles will be able to provide stored electricity back to the national grid when required. Commercial models for the supply of electricity for transport are likely to charge a premium for on-street daytime charging.

Feedback gathered via the Low Carbon Vehicles consultation exercise specifically from distribution network operators suggested that there would be minimal impact on the grid, apart from some very localised upgrades if demand was at the higher end of the demand curve. Electric vehicles are therefore likely to assist in achieving security of supply and demand objectives with negligible impact on the grid.

1.5.2 Scottish Government ambitions for low carbon transport

Ministers have strong ambitions for low carbon transport including:

  • complete decarbonisation of road transport by 2050, with significant progress by 2030 through wholesale adoption of low and ultra low carbon vehicles;
  • a mature market for low carbon cars, resulting in average efficiencies for new cars of less than 95 g CO 2/ km by 2020 ( RPP);
  • an electric vehicle charging infrastructure in place in Scottish cities by 2020.

We are also committed to promoting the use of Scottish sustainable biofuels for Scottish business to reduce emissions from heavy / specialist public sector vehicles, and have provide financial support to research and development in this area.

1.5.3 Biofuels

Targets for transport fuels are contained in the Renewable Energy Directive ( RED) and the Fuel Quality Directive ( FQD). The RED sets a target of 10% of transport fuels from renewable sources by 2020 and is part of an overall 20% target for energy. The FQD sets a GHG reduction target of 6% by 2020 and this equates to the 10% by volume target in the RED. The rate of increase in the Renewable Transport Fuel Obligation has been slowed, following the Gallagher Review so that the level of biofuels mixed with mineral fuel at the pumps will increase to 5% by 2013/14.

'Second generation' biofuels made from a number of materials including landfill waste, agricultural or forestry waste and marine algae are in various stages of research, development and demonstration. However, predictions of when these will be commercially available vary and could be as much as 10 years. In addition, costs, as a result of the more technical nature of the production process, are likely to be high and a decision about cost-effectiveness will have to be made.

To enable the expansion of biofuels, infrastructure changes will be necessary on the production side, exploring new feedstocks and production methods as well as associated distribution methods.

1.5.4 Low carbon vehicles: Leading by example

The Government has responded directly to feedback on the role of the public sector in promoting low and ultra low carbon vehicles and we have already taken the following positive steps:

  • Transport Scotland committed £4.3 million to support the procurement of low carbon vehicles and their supportive infrastructure in 2010-11. The Public Sector Low Carbon Vehicle Procurement Scheme provided funding support to Community Planning Partnerships to assist the uptake of a range of low carbon vehicle technologies in the public sector fleet. The scheme offers public bodies the opportunity to add low carbon vehicles to their fleets at the same price as conventional vehicles, while also supporting associated infrastructure provision. We are committed to extending support for the existing public sector procurement programme for LCVs . The procurement programme is planned to continue and will support the introduction of driver management instrumentation to improve public sector driver behaviour.
  • As a starting point we have committed now to the installation of 375 electric vehicle charging points. This trial will enable the evaluation of a range of charging infrastructure and locations and inform the creation of a wider network of charging infrastructure. We will continue to take a leading role in piloting technologies and testing consumer demand and behaviours in relation to essential infrastructure in Scotland. This will be followed by robust evaluation, in partnership with stakeholders.
  • We have provided £4.4 million of funding in 2010-11 for improving the environmental performance of the bus fleet through the Green Bus Fund.

1.5.5 The Prize

Our ambitions to harness our vast renewable energy resource could give Scotland an advantage in the development of electric and hydrogen fuelled vehicles in the long term - and perhaps initially for niche markets, making Scottish ultra low carbon vehicles some of the greenest in the UK. In order to seize the transport fuel opportunities potentially available from hydrogen, further research and development work will be necessary (see Section 3.8). Continued partnership between industry, academia, government and the voluntary and third sector is essential.