Realising our Low Carbon Potential – What is needed is 100% Commitment to Delivery
Over recent years we have seen the momentum of Scotland’s energy industry build significantly
and our focus, capability and connectivity in the low carbon sector is developing a scale of
opportunity that promises real economic value and international impact. Our industrial heritage
across a range of industries such as oil and gas, ship-building and the power sector supports the
positioning of Scotland as a significant energy producer as well as an energy technology innovator,
manufacturer and service provider into the future.
We benefit from having formidable renewable energy resources as well as major fossil fuel
reserves and Scotland is acknowledged as a global leader in the fast changing and exciting energy
industry not least in the development and integration of low carbon sources. When coupled with
our world-class research capabilities, as represented in the Scottish Energy Technology
Partnership (ETP) – a “pooling” of 11 Universities’ energy activities – we have an unparalleled
basis to produce competitive advantage by creating a strategy for research, development,
demonstration and deployment of new low carbon power and renewable energy technologies. This
capability is already delivering value to indigenous and inwardly investing companies and
accelerating growth in our energy sector.
Scotland’s emergence as an international force in clean energy and low carbon technologies is
underpinned by our engineering and technology skills base (through our Colleges and
Universities), leading research and innovation capability (academic and industrial), infrastructure
commitments and our vast renewable resources. It is estimated that Scotland has approximately
one quarter of Europe’s wind and tidal resource and 10% of its wave energy potential. It is critical
for Scotland’s economic and environmental wellbeing that we accelerate the pursuit of this
opportunity to ensure that we realise our full potential and deliver the jobs and investment that our
energy industry can bring.
This will also include our on-going dependency on coal and gas power plants as part of the energy
mix and integrating Carbon Capture and Storage (CCS) technologies with them where possible.
CCS has the potential to reduce emissions from fossil fuel power stations by up to 90%. Scotland
also has storage capacity on a “European scale”, enough to store Scotland’s industrial CO2
emissions for the next 200 years. This capacity is broadly equivalent to Norway’s and greater than
that of the Netherlands, Germany and Denmark combined. Given the importance of Scotland’s
other sources of energy such as Coal and Combined Cycle Gas Turbines, harnessing CCS has a
role to play in ensuring that we fully harness our energy potential and create in excess of 100,000
energy related jobs in Scotland by 2020.
We will continue to access contributions to our energy production from our existing nuclear plants
through the next decade with potential for plant lifetime extension. This diversity and
complementarity in our energy sources is a distinct and valuable feature of Scotland’s energy mix.
Across our diverse energy source portfolio we have an unprecedented opportunity to: maximise
our renewable energy potential; build a low carbon energy future; address security of supply;
become an international benchmark; attract and retain the economic value through further energy
industry creation; and, derive additional economic benefit through energy exports through
reinvestment in our grid infrastructure.
The combination of our various sources of energy also establishes Scotland as a safe, reliable and
environmentally sustainable exemplar that Europe cannot afford to ignore. It is not surprising that
Scotland has seen a number of important investment decisions in recent months that are bringing
significant new jobs and major investments that support economic growth. In March, Doosan
Power systems announced that it would be locating its Centre for Excellence for Renewables at
Westway in Renfrew, creating up to 1700 jobs. Mitsubishi is investing in an engineering facility in
Edinburgh to carry out research and development in offshore wind. In January 2011, Gamesa
announced its intention to establish an offshore wind technology centre in Glasgow.
Collaboration and leadership is vital to our success in this area. In the past few years, Scotland has
shown the way in creating public sector, industry and academic partnership that has been
supported and facilitated by government. The establishment of the Energy Advisory Board and the
Energy Industry Advisory Groups – resourced by Scottish Enterprise and HIE - have acted to focus
commitment and contributions of the main energy players in energy. This is already driving
strategic outcomes and prioritising key investments. This approach has attracted international
attention and has enhanced Scotland’s reputation as a country that is focused on delivery.
These developments and the confidence shown by investors in our industry is to be welcomed and
will provide a boost as we build our economic recovery and re-industrialisation of Scotland.
However, it is absolutely critical that we maintain the momentum of the progress that has been
made and continue to send out a clear message to investors that Scotland is “open for business”.
This explicit strategy and focus across government and its private and academic partners is also
good for jobs. We are already witnessing a growing number of graduates developing the skills
needed for the energy revolution. The ETP has established a collaboration through the Energy
Research Academy – supported by industry and the Scottish Funding Council - with
complementary contributions from Edinburgh, Heriot-Watt, St.Andrews, Aberdeen, Robert
Gordon’s, Glasgow and Strathclyde Universities aimed at producing high quality research trained
graduates for the energy sector. More recently, an alliance between the College sector and the
Universities has targeted a national approach to producing the high volume of highly skilled people
for this new sector. At the University of Strathclyde, for example, the recently announced
Technology and Innovation Centre (TIC) will bring together 850 academics, researchers and
project managers to work side by side with industry – also creating up to 500 new industry jobs developing the skills and expertise necessary to let our energy sector flourish as we build towards
over 100,000 jobs in the low carbon sector by 2020.
The recently announced target of seeking to generate 100% of our electricity needs via renewables
is challenging, but must be set in the context of our overall energy source mix and balance that will
underpin our ability to match supply and demand whilst seizing the opportunity to establish a
globally competitive renewable and low carbon industry. We must also address the uncertainties
that are currently in play in the UK, including DECC’s Electricity Market Reform activities and
Ofgem’s project Transmit, reviewing grid access and charging mechanisms. Investment risk must
be reduced as we seek to capitalise on our natural resources, highly skilled workforce and
technological innovation. The establishment of a 100% target will certainly focus the minds of
politicians, planners and other decision makers whilst giving industry the necessary leadership and
confidence that will be vital in attracting further investment and jobs into the industry.
It is important not to equate energy with electricity generation alone. Instead we must also
consider transport, heat, chemicals, biomass and waste if we are to find the most sustainable
solutions - for example in storage - to overcome intermittency and to extend renewables utilisation.
Optimisation of the interaction between these energy modalities is critical to success. Similarly, the
flexibility of a significantly distributed energy network will greatly enable our ability to respond to
energy challenges in a cost-effective and energy efficient manner. There also exists real
opportunity to exploit Scotland’s capabilities in hydrogen technologies.
There are three clear areas in which hydrogen will play a major role in the UK: energy storage to
address intermittency; hydrogen for transport; and, hydrogen applications in CO 2 Capture. If 100%
renewable electricity provision – within a balanced, overall energy mix - equates to having a
renewable capacity equal to Scotland’s average power requirements this may be achievable, but
benefits will be limited without extensive storage.
We continue to see exciting developments in the energy industry with ever more offshore sites
opening, increased capacity of wind turbine machines, encouraging progress in marine renewables
and innovations in grid technology and designs. The Scottish Government recently announced the
approval of the world’s largest tidal array in the world - a £40 million investment in Argyll by
ScottishPower Renewables that will act as a beacon for the global tidal industry.
Scotland is well placed to meet the challenges and opportunities provided by the shift to the low
carbon economy that can establish us as leader in Europe. Political, industrial and academic
leadership is critical which is why ambition and realistic delivery capability is vital. We must also
continue to build on our key successes. We can be a hub for exporting renewable and low carbon
energy to the rest of Europe which is why grid upgrades and investments are so important not least
in the North Sea Countries Offshore Grid Initiative and the EU Memorandum of Understanding on
developing North Sea grid.
We should recognise that our reputation is built on ambition, credibility and delivery. The 100%
targets should be used as a spur for us to act in partnership to realise Scotland’s low carbon
potential and creating a new industry for the 21st Century. Our renewables ambitions are all the
more compelling when we see their integration alongside a diverse portfolio of other sources that
contribute to the reliable supply of energy. Our research, innovation and production of high quality
graduates – particularly in our Universities - are strong building blocks that provide a platform to
attract and maintaining power and energy industries that build Scotland’s low carbon systems and
lead international markets. In order to do this, we must work collaboratively across government,
industry and academic partners. We have made a good start and it is vital that we continue to build
on the focus and commitment that has been established in order to position Scotland as a genuine
global player in low carbon technologies and infrastructure. Moreover, in order to have a realistic
chance to achieve our targets, we must act now at pace and with urgency. This means both
acceleration of our own decision making and effective influencing of other key bodies in the UK
and in Europe.