Hansard

I am pleased to take part in the debate. I will talk about the importance to Scotland and to my constituency of Scotland’s low-carbon potential and the renewable energy sector and I will set out why the issue must be addressed in proposals for electricity market reform.

Given increasing energy demand and our ageing electricity generation park, it is clear that the UK will have to invest heavily during the next decade if it is to maintain a reliable power supply and meet the Government’s climate change targets. According to the Department of Energy and Climate Change, a quarter of the UK’s generation capacity will need to be replaced by 2020. If we are to meet the Government’s targets, almost a third of the UK’s electricity must come from renewable energy sources by 2020, and the energy sector will need to be largely decarbonised by 2030 to meet climate change goals—no mean feat. Therefore, there is a need to address the needs of the energy sector and provide a fit-for-purpose framework, which also helps Scotland to meet its climate change targets and become the green powerhouse of Europe.

Scotland plays a leading role in low-carbon generation. Half of all UK renewable generating capacity is located here and the most recent renewables obligation report shows that 35 per cent of renewable electricity comes from Scottish generators. Electricity market reform is crucial to the release of Scotland’s renewable energy potential.

More than any other part of the UK, Scotland has the potential to deliver all its electricity needs from renewables and to make a substantial contribution to total UK and EU renewables capacity.

Scotland’s low-carbon market was worth around £8.5 billion in 2007-08 and that is forecast to rise to £12 billion by 2015-16. Therefore, Scotland has considerable low-carbon economic opportunities across various sectors, which must be supported in any package of reform, particularly in the context of tariffs and incentives. Many members rehearsed the arguments on the issue and I will not do so again—members will be glad to hear that.

In my constituency, the renewables sector is an increasingly important source of investment and employment. For example, Burntisland Fabrications—BiFab—which is located in Fife and in the Highlands and Islands and focuses on offshore energy, has recognised that the energy sector is changing and is now involved in the market for renewables such as wind, wave and tidal power. The company has applied its 20 years of experience to the new sources of power during the past decade. It employs 900 workers and is currently working on a £60 million contract for 31 substructures for the Ormonde offshore wind farm in the North Sea. It is investing more than £14 million so that it can be well placed to take advantage of future developments.

BiFab is now one of the leading suppliers of support structures for offshore wind turbines in Europe and a world leader in developing offshore structures in deep water, which has given it an international research base and boosted Fife’s economy.

In November last year, BiFab secured a £12 million contract from RWE Npower Renewables to design and manufacture two substation foundation structures for its wind farm. The project will safeguard around 390 jobs at BiFab’s facilities.

The experience and expertise of the workforce in Fife has made the kingdom the centre for offshore power. It must be matched with investment in renewable energy in any proposals for reform of the energy market to deliver cleaner, greener electricity.

Yesterday, I raised with the minister the need for access to long-term funding for companies such as BiFab, as well as access to the appropriate skills and workforce. Organisations such as OPITO, which develops skills and training for the oil and gas sector, are exemplars of best practice. I hope that the renewables sector will start to emulate some of that success.

We have a once-in-a-generation opportunity. If we fail to reform the energy market or secure appropriate finance and skills to incorporate the needs of the renewables sector, we will jeopardise the progress that BiFab and other renewable energy companies throughout Scotland have made and the jobs that they sustain.

However, the consumer must not bear all the burden of the need to reform our energy market. To deliver best value and ensure social inclusion, support for those on the lowest incomes must be in place to ensure that electricity remains affordable and can be sustained in the long term. David Stewart outlined how increased costs are being offloaded on to the consumer, which has the greatest impact on those who are in fuel poverty. We must protect the consumer.

The reform proposals must be implemented in a way that enhances the sector’s current plans for further increases in renewable electricity regeneration as well as protects investments that have already been made so that we can sustain our position in areas in which we are world leaders. Any package for reform must provide a degree of certainty for investors in renewable energy to make that option more attractive than conventional, polluting alternatives and to counter concerns over the long-term robustness of low-carbon markets. A sound business case will be made for investing in the renewables sector only by reducing uncertainty and risk.

Given Scotland’s low-carbon energy potential and the importance of renewables to the economies of regions such as Fife, the UK Government must fully consult the Scottish Parliament on discussions about electricity market reform. I support the amendment in the name of Lewis Macdonald, which

“urges the UK Government to ensure full and immediate consultation with the Parliament and”

the sector

“in Scotland on the electricity market reform proposals.”

15:58