Hansard

There are few things as important as secure, affordable and sustainable energy provision that delivers the best outcome for Scotland’s businesses and consumers. The Scottish Government has a well-established approach to energy: ensuring good stewardship of Scotland’s oil and gas resources, while prioritising the long-term development of clean energy sources as part of a varied energy mix and being driven by some of the most stretching legislative targets for emissions reduction in the world.

Today’s statement is to update Parliament on the Scottish Government’s plans for a new, overarching energy strategy, which I set out when I addressed the chamber last September.

On 1 March, the First Minister and Professor Sir Jim McDonald chaired a meeting of the Scottish energy advisory board and proposed to its members a new approach to energy and a better deal for Scotland. I am pleased to say that there was a very clear consensus in that meeting on the priorities of a new energy strategy. Three things must be achieved. First, there must be a stable, managed energy transition. We must ensure that Scotland has secure and affordable energy supplies in future decades as we address the need to decarbonise our energy system in line with this Parliament’s Climate Change (Scotland) Act 2009. The Scottish Government must also continue to support innovation and expertise from our oil and gas industry, the deployment of renewable energy technologies and the development of more innovative and low-cost ways of producing, storing and transmitting energy.

Secondly, we must take a whole-system view of the challenge. By that, I mean that there must be consideration of Scotland’s energy supply and energy consumption as equal priorities; we must also build a genuinely integrated approach to power, transport and heat. Our success rests on continuing our good work to make our homes, workplaces and vehicles more energy efficient and more affordable to run.

Thirdly, we must embrace a truly local vision of energy provision by promoting local energy solutions, planned with community involvement and offering community ownership of energy generation, and by delivering a lasting economic asset to communities in every part of Scotland.

Developing our new energy strategy is an ambitious programme, but we have many of the building blocks in place. If re-elected by the people of Scotland in May, we will then set out more detail about the new approach, and a draft energy strategy will be published for consultation by the end of this year to accompany the draft third report on policies and proposals, required by the Climate Change (Scotland) Act 2009, which will set out how Scotland can achieve future emissions reduction targets. In formulating the draft energy strategy, we will draw on the expertise of Scotland’s industrial and academic communities. We will also embark on a public dialogue with Scottish communities and energy consumers over their energy future.

As I set out the plans to develop a new energy strategy, I would like to reflect briefly on the Scottish Government’s commitment to developing a thriving renewable energy sector, which, in partnership with industry, development agencies and academia, has led to major changes to energy provision in recent years. Almost 50 per cent of domestic demand for electricity is met by renewables. That is up from about 10 per cent only 10 years ago.

Scotland has met the 2020 target to install 500MW of community and locally owned renewable generation capacity. The development of onshore wind—in the right places—has underpinned investment in grid upgrades that will enable us to develop our offshore and marine potential through projects such as SSE plc’s Beatrice offshore wind farm, which at £2.5 billion will become, subject to final investment decision approval, the largest infrastructure project in Scotland.

With substantial Scottish Government support, we are on the cusp of two record-breaking projects. MeyGen Ltd is developing the world’s largest tidal stream array in the Pentland Firth, with the first four turbines being installed this year, and the next stage of Hywind—the world’s largest floating offshore wind project—will be in place by 2018.

We should celebrate those successes, but I am sorry to say that we now face stiff headwinds to continued progress across the full range of Scottish energy priorities. Indecision and inconsistency in energy policy from Westminster are now placing Scottish investment and jobs at risk. United Kingdom Government inaction continues to threaten the prosperity of the oil and gas industry. We are using our devolved powers to provide support where possible, but I have repeatedly called on the UK Government to do more with its powers over the fiscal regime and over non-tax measures, such as loan guarantees, to support the industry and its highly skilled workforce. I await tomorrow’s budget with eager anticipation.

We face an onslaught against renewables from the UK Government with its abrupt and irrational termination of financial support for the best-value technologies, which places Scottish jobs and investment at risk and jeopardises further progress towards our 2020 renewable energy targets. The UK Government has, in effect, chosen nuclear power over carbon capture and storage with its abrupt cancellation of the CCS demonstrator competition, which could have done so much for Peterhead.

Scottish energy consumers—all of our constituents—now face unprecedented risks to the basic tenet of energy provision: secure energy supplies at the best price. Power station closures across Britain—including Longannet, which will close in the next fortnight—continue without the prospect of replacement. The Competition and Markets Authority confirmed last week that consumers are still not getting a fair deal. In a further blow, the UK Government has halved the value of the support that is available to help the most vulnerable in society heat their homes more affordably.

Scotland cannot wait for the Department of Energy and Climate Change and the Treasury to get it right. It would be easier for me to stand here and talk about our intentions for the next session of Parliament, but those issues are too important to wait. We are now acting on some of the programmes that begin to address those major challenges.

The Scottish energy efficiency programme, which follows from the Cabinet’s agreement that energy efficiency should be a national infrastructure priority, will provide an offer of support to buildings across Scotland, domestic and non-domestic, to improve their energy efficiency rating over a 15 to 20-year period. It builds upon the success of existing programmes, which, since 2009, have delivered over £0.5 billion to improve energy efficiency and tackle fuel poverty. A new energy efficiency procurement framework, developed with the Scottish Futures Trust, will improve the public sector’s energy efficiency to the tune of £300 million.

Our local energy challenge fund last week awarded up to £10 million of funding to nine new projects, all of which explore a new kind of localised energy provision, with innovative technologies and community involvement. Today I am announcing a further £7 million for investment in district heating for the next financial year. That will bring our total investment in district heating to over £17 million.

There is so much economic opportunity and societal benefit for Scotland in that new approach, and securing the benefits must be a shared endeavour. I hope that I can rely on the support of members as this important work to develop Scotland’s energy strategy progresses.