Hansard

Thank you, Presiding Officer. I will revert from fortissimo to pianoforte in my tone.

I very much welcome the opportunity to discuss the development of hydro power in Scotland and its importance for the future, and to celebrate the 70th anniversary of the Hydro-Electric Development (Scotland) Act 1943, which enabled large-scale renewable energy development in this country.

Last month, the First Minister delivered the inaugural Tom Johnston memorial lecture at an event organised by Scottish Renewables to celebrate the 70th anniversary of the 1943 act, and I think that it is fitting to start by acknowledging the role that Tom Johnston played in Scotland’s hydro story.

Many members will be aware that Tom Johnston’s greatest legacy was the creation of the North of Scotland Hydro-Electric Board. He was a keen proponent of hydro power and saw its potential role in the reconstruction of post-war Scotland from early on. He established an inquiry to investigate the potential for hydroelectricity in the north of Scotland, which resulted in the Hydro-Electric Development (Scotland) Act 1943 being passed into law 70 years ago.

In effect, the act nationalised the further development of Highland water resources and recommended the creation of a board to manage hydro generation in the north. I want to reflect on the consequences of that legislation, the effect that it had on Scotland’s Highlands and Islands, and the example that it sets of Scotland’s natural resources being used to improve the wellbeing of our people.

In 1945, fewer than half of the homes in the Highlands had access to electricity; by 1960—15 years later, when Tom Johnston stepped down as chair of the hydro board—that number had increased to more than 90 per cent. The scale of the construction work was impressive: between 1945 and 1965, 78 dams were built, 2,000 miles of tunnels were excavated and more than 20,000 miles of electricity network were established.

The workers who built the infrastructure—they were known as the hydro boys—had to work in remote locations; sometimes they had to work in dangerous conditions. Their achievement transformed the quality of life people in the north of Scotland and, as a result, more than 200,000 households had access to modern comforts for the first time. The electricity meant greater economic sustainability, which resulted in new opportunities for communities in the north of Scotland.

The effect is still evident today and can be seen through the continued economic investment and population increases. Companies based in the Highlands and Islands are competing for major investment and they are being successful. Companies across the globe recognise that the Highlands and Islands are great places in which to live, work and invest. Highlands and Islands Enterprise has become so successful that it is vacating its office premises to make way for Capgemini, which is one of the inward investor companies that it has attracted. That success is one of the important legacies of the Hydro-Electric Development (Scotland) Act 1943.

Seventy years on, Scotland is at the start of a new renewable energy revolution. Scotland’s renewables sector goes from strength to strength. Last year, it produced the equivalent of 39 per cent of our total electricity demand. That is significant progress towards our 100 per cent target. As I have highlighted with regard to Tom Johnston’s vision, the issue is not just one of energy generation but one of wealth creation and benefits to our communities.

To put the figure in context and show what it means today, Scotland’s renewables sector saw more than £1,000 million invested in 2012 and it supports more than 11,000 jobs. A £7,000 million programme to upgrade Scotland’s transmission networks proceeds apace. Up to 3,000 jobs will be created through investment by Scottish Power and SSE. That means high-quality employment for the graduates, engineers and apprentices building the infrastructure that will, incidentally, enable us to quadruple our electricity export to England, which will surely need it.

Hydroelectric power has an important role in Scotland’s transition to a low-carbon economy. It accounts for a large percentage of renewable energy produced in Scotland. Although most of the large-scale hydro power schemes in Scotland have been built, the Scottish Government is determined to encourage new conventional hydro power schemes where possible.

Since 2007, we have consented 19 hydro power applications and have taken a number of actions to enable development. I will highlight a few of them. First, we have streamlined the consents process for hydro projects by raising the section 36 threshold for consent to 50MW. That will unlock further renewables capacity by encouraging schemes over 1MW. Secondly, we have published online planning advice for hydro schemes, which encourages planning authorities to include hydro power in their spatial plans.

Thirdly, last year, we recognised that there are particular influences on costs affecting projects in Scotland. We therefore maintained the level of support for large-scale hydroelectric schemes at 1 renewables obligation certificate per megawatt hour. At the same time, the United Kingdom Government was reducing its support by 30 per cent to 0.7 ROCs.

As a result of the Scottish Government’s policy, SSE announced last month that it is to start construction on the 7.5MW Glasa hydro scheme. Glasa will be the largest hydro scheme to be built in the UK in the past five years and the second largest conventional hydro scheme of the past 50 years. It will employ more than 100 people at the peak of construction. When it is built, it will supply enough electricity to meet the needs of around 10,000 households.

SSE has confirmed that the project would not have gone ahead without the Scottish Government’s continuing support for hydro power. I hope that shows that clear political support and leadership can lead to significant new investment.

The Scottish Government’s support is also making a difference at the small community scale. Projects that started out as ideas from local volunteers are becoming a reality. Under our community and renewable energy scheme—CARES—we are supporting 15 community hydro projects.

An example of a project that CARES helped at an early stage is the Harlaw hydro project, which is being developed by Balerno Village Trust. CARES provided free independent advice and grant support for the feasibility and technical work that is crucial in assessing a project’s viability. The project has now been offered a CARES loan to help with construction. Without the CARES support, the project would not have happened.

The approach shows our commitment to all communities across Scotland sharing in the rich rewards of our renewable resource, at all scales. The Scottish Government is leading the way across the UK on how we support local ownership of renewable energy.

It is reasonable to say that the UK Government’s position, in particular on electricity market reform, is causing uncertainty and that that is affecting hydro power. A good example in that regard relates to pumped storage. In appropriate locations, pumped-storage schemes have huge potential to ensure that electricity supply remains reliable, even as we move to variable energy sources such as wind. However, SSE has indicated that, before it can make investment decisions on pumped-storage hydroelectric schemes, it requires greater clarity about future UK Government policy.

I suspect that members will debate concerns that Scottish Renewables, among others, expressed about how new arrangements in relation to the feed-in tariff and tariff degression will be applied. I will listen with interest to all comments; I know that there are many members, in all parties, who take a close interest in the matter.

Hydroelectricity is one of the great industrial and economic success stories of post-war Scotland.