Scottish energy strategy contains opportunities for businesses, says expert

Out-Law News | 21 Dec 2017 | 2:38 pm | 3 min. read

Scotland's new energy strategy contains plans which present opportunities for businesses, an expert has said.

The Scottish government published the new energy strategy (85-page / 2.10MB PDF) on Wednesday.

Two new high-level targets have been set by the Scottish government to inform the future implementation of the strategy. By 2030, it wants half of the energy needed to cover Scotland's heat, transport and electricity consumption to come from renewables, and it also wants to see a 30% increase in the productivity of energy use across the Scottish economy by the same deadline.

Energy law expert Kate Turner of Pinsent Masons, the law firm behind, said the targets set represent "a new approach taken by the Scottish Government".

"Further policy development will be required for a move towards a managed disruption of the status quo and to further develop an integrated approach to the energy system in order to meet the climate change targets of the envisaged new Climate Change Plan expected to be published in February," Turner said.

Those policy developments may come in the route map for the Scottish Energy Efficiency Programme, to be published in May next year, as well as through the finalised plans for local heat and energy efficiency strategies, and regulation of district heating, which the Scottish government consulted on in early 2017, she said.

Turner also said that plans to grow renewable energy generation underpins the entire energy strategy and that this is underlined by the Scottish government's onshore wind policy statement, which has been published alongside the strategy.

The policy statement set out plans to grow the contribution onshore wind plays in meeting Scotland's energy needs. A central measure outlined by the Scottish government towards achieving that goal is its support for "technology-neutral contract auctions" related to the development of new onshore wind farms. It further identified the "specific and increasing potential for energy storage [technologies] … to enhance the economics, performance and value, of onshore wind".

Further plans to support decarbonisation were also contained in the Scottish government's strategy, including a pledge to establish a new £60 million Low Carbon Innovation Fund. The money will support "innovative low carbon energy infrastructure solutions", it said.

"The ambitious framework set out in the energy strategy sends an important message to business regarding the potential for investment in low carbon projects located in Scotland," Turner said. "This is particularly clear in relation to the need to see real progress in the decarbonisation of heat, potentially through a mix of solutions such as district heating, electrification of heat with heat pumps, and gas network decarbonisation."

"It is also evident in the innovation required for the roll-out of electric or other low emission forms of transport as well as the other economic opportunities that the necessary changes that Scotland’s energy system will create to deliver the strategy. Furthermore, there are business opportunities in a more localised energy system that integrates smart technologies, including the way in which the energy system will be affected or enhanced by emerging digital technologies," she said.

In addition to support for renewable energy generation, the Scottish government has also placed a large part of its focus on "energy efficiency measures, the management of energy consumption, the promotion of storage and system flexibility and further innovation", Turner said. It is also clear, however, that Scotland will continue to rely on natural gas consumption and that oil will also be required to meet demand, she said.

"The commitment to continue to support investment and innovation across the oil and gas sector, including exploration, innovation, subsea engineering, decommissioning and carbon capture and storage will of course also be welcomed by the oil and gas sector," Turner said.

In its new strategy, the Scottish government also reaffirmed its commitment to setting up a new publicly owned energy company. The company would look to address the challenges of fuel poverty and support economic development. It would be run on a not-for-profit basis and is to be set up before the next Scottish parliamentary elections in 2021.

"Our vision … strengthens our international reputation for sustainability – we are an ambitious country of outstanding natural beauty, determined to build on our reputation as a renewable energy powerhouse," said Paul Wheelhouse, Scottish minister for business, innovation and energy.

In a separate development, West Dunbartonshire Council has separately given the go-ahead for a new district heating scheme to service the regenerated Queens Quay site in Clydebank, where the former John Brown shipyard was situated. The district heating scheme to be created will be the largest in Scotland, according to a report by Insider.