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Scottish Energy Strategy: The Future of Energy in Scotland

The Scottish Government released the first Scottish Energy Strategy: The Future of Energy in Scotland and associated Onshore Wind Policy Statement on December 20th 2017

Download the full Strategy document at: http://www.gov.scot/Resource/0052/00529523.pdf

Scotland's first Energy Strategy sets out the Scottish Government’s vision for the future energy system in Scotland. It articulates six energy priorities for a whole-system approach that considers both the use and the supply of energy for heat, power and transport.

Scotland’s first Energy Strategy will strengthen the development of local energy, protect and empower consumers, and support Scotland’s climate change ambitions while tackling poor energy provision. Built around the following six energy priorities, this Strategy will guide the decisions that the Scottish Government, working with partner organisations, needs to make over the coming decades:

• Promote consumer engagement and protect consumers from excessive costs;
• Improve the energy efficiency of Scotland’s homes, buildings, industrial processes and manufacturing;
• Ensure homes and businesses can continue to depend on secure, resilient and flexible energy supplies;
• Empower communities by supporting innovative local energy systems and networks;
• Champion Scotland’s renewable energy potential, creating new jobs and supply chain opportunities; and
• Continue to support investment and innovation across our oil and gas sector, including exploration, innovation, subsea engineering, decommissioning and carbon capture and storage.

This Strategy highlights the connections between the energy system and all parts of the economy, and its importance to sustainable, inclusive growth. It also makes a strong commitment to improving the Scottish Government’s approach to public awareness-raising and engagement on energy issues.

Highlights include:

  • The equivalent of 50% of the energy for Scotland’s heat, transport and electricity consumption to be supplied from
    renewable sources.
  • An increase by 30% in the productivity of energy use across the Scottish economy
  • Onshore Wind - a push for UKwide policy support for onshore wind, and unilateral action to prioritise and deliver a route to market – combined with a Land Use Planning approach which continues to support development while protecting the landscape.
  • Offshore Wind - Offshore wind: New opportunities for development in Scottish waters will be considered with further support for the development of an innovative and competitive supply chain in Scotland.
  • Island Wind - "Full support" for the emerging proposal to provide Scotland’s island wind a route to market – offering a new opportunity for island communities to participate in the energy transition.
  • W&T Energy - Support for the Scottish wave and tidal energy sector – supporting the research, development,
    innovation and demonstration that will maintain Scotland’s competitive advantage.
  • Solar photovoltaic power (solar PV): The role for solar and other renewable technologies will be considered under
    the forthcoming review of energy standards within Building Standards and the next National Planning Framework
  • Bioenergy - A bioenergy Action Plan will be prepared to provide clearer scope for the development of bioenergy in the Scottish energy system. Further research to improve our understanding of the potential contribution that bioenergy can make towards meeting Scottish energy demand.
  • Hydropower - The Scottish Government will partner with the hydro sector to support their ambition, including  helping the Sector to explore potential solutions through a Hydro Task and Finish Group.  
  • A Low Carbon Innovation Fund, with a further £60 million to deliver innovative low carbon energy infrastructure solutions. Broadening of the  the scope of the Renewable Energy Innovation Fund (REIF) beyond renewables to include low carbon energy solutions as an Energy Investment Fund, and bolster its funding with up to £20 million made available in 2018-19.

Scottish Renewables published its analysis of the key points from the Strategy for its Members onDecember 21st. This analysis is reporoduced below. SR aims to engage with the renewable energy community to hear feedback about the Strategy and questions can be addressed to : +44 (0)141 353 4980 or by email to hsmith@scottishrenewables.com

Vision and targets

The Strategy sets a vision for “a flourishing, competitive local and national energy sector, delivering secure affordable, clean energy for Scotland’s Households Communities and Businesses”. It is a long-term Strategy, designed to guide decision making over several decades. The Strategy is guided by three core principles: a whole-system view, an inclusive energy transition and a smarter local energy model.
Two new targets have been set for the Scottish energy system by 2030:
1) The equivalent of 50% of Scotland’s energy demand - including heat, transport and electricity - to be supplied from renewable sources
• Scottish Government analysis underpinning this targets shows that renewable electricity could rise to over 140% of Scottish electricity consumption
• This target would require installed renewable energy capacity in 2030 to be in the region of 17GW – almost double current capacity, as advocated for by Scottish Renewables.
• It assumes the non-electrical proportion of transport demand met by renewables to be around 5%
• It assumes renewable heat grows to 20% of non-electrical heat demand
2) An increase by 30% in the productivity of energy use across the Scottish economy (i.e. “squeezing more out of every unit of energy consumed across the economy – more economic activity for each unit of energy being used”)

Scenarios and Decision Making

The Strategy sets out two scenarios designed to inform both short-term policy actions and consider long-term strategy looking to 2050.
One scenario centres on low-carbon electricity, while the second focuses on hydrogen as the dominant source of fuel for heating and transportation.
Given the uncertainties over what technologies will come forward to shape our energy system, Scottish Government aims to pursue ‘no/low regret’ options in the short term, while allowing further time to consider the likeliest and best solutions on how to deliver energy system change in the long-term. The next five years are expected to be critical in making these decisions.

Policies and Goals: Six Priority Areas

The Strategy sets out six strategic priority areas, with a focus on short-term deliverables under each.

1) Consumer Engagement and Protection
• There is a focus on consumer protection and promotion of smart consumer energy actions (smart appliances, smart meters etc.)
• Scottish Government is currently consulting on a new long-term fuel poverty strategy
• A Warm Homes Bill will be introduced in 2018, to tackle fuel poverty, including statutory targets
• 2018 will see a pilot programme run, designed to ensure vulnerable and disengaged consumers can switch tariff
• A publicly-owned Scottish energy company is to be set up by 2021. The aim is that is supports economic development, tackles fuel poverty and will be run as a non-profit. It may also have a role in prompting renewable generation and maximising the benefits for local communities. A public consultation on the company will take place in 2018.
• Plans to deliver a consumer advice and advocacy service will be consulted on.

2) Energy Efficiency
• May 2018 will see a Road Map for Scotland’s Energy Efficiency Programme (SEEP) launched
• SEEP is a 15-20 year programme designed to make Scotland’s building stock more energy efficient
• Funding of £0.5 billion has already been committed for SEEP over the next 4 years.
• As part of SEEP, Scottish Government is developing Local Heat & Energy Efficiency Strategies (LHEES) – currently out for consultation (SR is responding)
• Scottish Government will begin a further review of energy standards in buildings in 2018

3) Renewables & Low-Carbon
The Strategy states that ‘Renewable and low carbon energy will provide the foundation of our future energy system’. Building on the Renewable Energy Investment Fund (REIF), the scheme will transition to include low carbon energy solutions as an Energy Investment Fund, with an additional £20 million of funding made available in 2018-19. This fund will be a transitional measure before the Scottish National Investment Bank becomes operational. Similarly, building on the success of the LCITP, a Low Carbon Innovation Fund, with £60 million to deliver innovative low carbon energy infrastructure solutions has been established. On Community Benefit and Shared Ownership, the Strategy sets out Scottish Government expectations that community benefits are offered in line with the Good Practice Principles, but recognise that the economic conditions for new renewables projects have changed considerably. Ambitions surrounding Shared Ownership are re-stated, and Government commits to review Good Practice documents for shared ownership in 2018.

3.1 – Onshore Wind
• Scottish Government will push for UK wide policy support for onshore wind, and take action of their own to prioritise and deliver a route to market
• Government commits to continuing to support development in the right places, and the extension and replacement of existing sites with new and larger turbines (on a case by case basis).
• Scottish Government has published its Onshore Wind Policy Statement alongside the strategy, which states:
o Continued commitment to the deployment of onshore wind and that capturing industrial opportunity is a top priority for Ministers.
o Route to Market: As well as continuing to push UK Government for a route to market (CfD Pot 1 auction), Scottish Government will continue to explore, in parallel, other avenues under its powers, e.g. develop the scope to offer increased PPA provision as part of the national collaborative contract for electricity supply. They also “remain determined to pursue opportunities for further development across the public estate” (e.g. the forest estate).
o Efficiency: They have decided not to pursue the inclusion of efficiency as a material consideration in the section 36 consenting process. However, they will continue to invite applicants to explain clearly how environmental impacts have been balanced against energy yield during design iteration, and reported as part of the information provided in support of applications
o Bigger turbines: SG states it “fully supports the delivery of large wind turbines in landscapes judged to be capable of accommodating them without significant adverse impacts. Our planning policy already supports the development of appropriately sited wind turbines – we anticipate that this will enable a range of turbine sizes in the future.”

3.2 – Offshore Wind 

 • A review of the National Marine Plan is due in March 2018 – providing an opportunity to ensure it meets the objectives of the strategy
• A Sectoral Marine Plan for Offshore Wind in deeper Scottish Waters is expected from Marine Scotland
• Scottish Government commit to consider opportunities for development in Scottish waters
• Crown Estate Scotland is considering its approach to new leasing rights for commercial-scale offshore wind projects
• Scottish Government will continue to support the proposed UK Offshore Wind Sector Deal

3.3 – Island Wind
• Scottish Government commits in the Strategy to continued support for the emerging UK Government proposal to provide island wind with a route to market

3.4 – Wave and Tidal Energy
• Scottish Government reiterates its support for these technologies and its desire to maintain Scotland’s competitive advantage in these sectors
• The Minister for Business, Innovation and Energy has agreed to chair a new short life industry working group, set to agree five priorities to secure the growth of the sector

3.5 – Solar PV
• Scottish Government will consider the role for solar under the forthcoming review of energy standards within Building Standards and the next National Planning Framework (NPF 4)
• As part of the Planning Review, the potential to expand permitted development rights is being considered

3.6 – Bioenergy
• Confirmation of commitment to develop a Bioenergy Action Plan to provide clearer scope for the development of the technology
• They will also conduct research to improve the understanding of the role bioenergy can play in the energy system

3.7 – Hydropower
• The Strategy points to the Scottish Government’s Hydro Task and Finish Group as a method of working with industry
• Following the Barclay Review of Business Rates, it was confirmed with the draft Budget, that Hydro would be fast-tracked through a review of Plant and Machinery

3.8 – Low-Carbon and Renewable Heat
• The Strategy sets out an ambition to coordinate closely with UK government on the long-term direction of heat decarbonisation
• Heat decarbonisation as a policy priority will be focussed on SEEP alongside existing funding programmes.

3.9 – Low-Carbon Transport
• The Strategy notes a range of technologies with potential to reduce emissions from the transport sector
• To meet the existing commitment to phase out new petrol and diesel cars and vans by 2032 the strategy sets out various commitments on charging infrastructure, pilot projects to encourage ULEVs and steps to better integrate electric vehicle policy with energy systems, including renewable generation.

4) Innovative Local Energy Systems

• The aim in the Strategy is to maintain Scotland’s leadership in developing local energy systems and put forward the ambition to move from innovation to commercialisation.
• The intent is to develop a detailed local energy systems position paper

5) System security and flexibility

• The Strategy points to flexible gas-fired generation as a ‘natural complement’ to a high renewables future, especially when fitted with CCS technology.
• Scottish Government set out that they believe that a more strategic approach is required, including assessing market mechanisms like the Capacity Market to ensure that there are fair incentives to maintain – or invest in new – controllable generation in Scotland.
• On Pumped Storage Hydro, Scottish Government sets out their support for the technology and commits to continuing to work with the developers and with the UK Government to support the development of schemes.
• Ahead of regulatory price control reviews, Scottish Government will develop:
o a Scotland Electricity Network Vision statement, and
o a Scotland Gas Network Vision statement.

6) Oil and Gas industry strengths

• The Strategy sets out priorities for the Oil and Gas sector, including on skills transitions.
• The potential of hydrogen and the synergies with the Oil and Gas sector are noted as well as Scottish Government’s commitments to Carbon Capture and Storage.

Monitoring and Engagement

Scottish Government commit to producing an Annual Energy Statement where they will set out progress against the delivery goals in this strategy.

£60 million low carbon infrastructure support fund open for applications https://t.co/0UeCizMvSx via @SBNN_National
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