Select committee: Scottish Affairs Committee

Renewable energy in Scotland

Closed Opened 19 Mar 2021 Closed 8 Feb 2022 6 recommendations 5 conclusions

Scottish Affairs Committee Inquiry on parliament.uk ↗

Inquiry scope (the committee's words)

We have launched an inquiry into renewable energy in Scotland just months before the world descends on Glasgow for November’s COP26 UN Climate Conference. This inquiry is likely to examine: how ‘net-zero’ targets can be met by development of renewable energy in Scotland; the technologies that would best serve Scotland and how challenges in their development can be overcome; employment potential of renewables in Scotland and how a ‘just transition’ for oil and gas workers can be achieved; and how the UK and Scottish Governments can work together to reach their green goals. Read the call for evidence for more detail about the inquiry . Read an interactive summary of our key recommendations

Where it stands

The inquiry is closed, opened 19 March 2021.

The committee has published 1 report, most recently Fourth Report - Renewable energy in Scotland on 17 September 2021.

The government's response

Published 1 December 2021. The deadline was 17 November 2021.

Summary written by Accountability Index from the government's response. It is not the government's own words.

The government's response sets out its position on each recommendation, stating that network regulation and transmission charging are "a matter for Ofgem as the independent regulator" and that it "has no plans to amend Ofgem's statutory duties".

On grid reinforcement, the government "recognises the need for increased capacity on the grid" and says it "will continue to engage with Ofgem"; it gives no response on the Committee's deadline of the end of 2022.
On transmission charging, it "shares the Committee's view on the importance" of the arrangements. It notes that Ofgem published a call for evidence on possible reforms and has said it will announce next steps "later this quarter".
On Ofgem's statutory duties, it states it "has no plans to amend Ofgem's statutory duties to include a separate net-zero duty". It points instead to its commitment to consult on a Strategy and Policy Statement for Ofgem in 2021.
On tidal energy, it says tidal stream "will have to reduce its costs to compete" but is an eligible technology for Contracts for Difference. It is "evaluating" evidence from last year's call for evidence on marine energy.

Read the government's response ↗ Report an error

Recommendations and conclusions

Conclusion 1Conclusion
Recommendation 2Recommendation
Conclusion 3Conclusion

All 11 recommendations and conclusions

Reports

Fourth Report - Renewable energy in Scotland17 September 2021 · 11 items

All reports

Evidence

4 oral evidence sessionsLatest 12 July 2021
11 witnesses

All evidence

Recent activity

Correspondence with Rt Hon Greg Hands MP, Minister of State for Energy, Clean Growth and Climate, follow-up to the UK Government’s response to the Committee’s Renewable energy in Scotland Report, dated 7 December 2021 and 5 January 202210 January 2022, Correspondence
Renewable energy in Scotland: Government Response to the Committee’s Fourth Report1 December 2021, Report published
Fourth Report - Renewable energy in Scotland17 September 2021, Report published

Meetings and visits

Recommendations and conclusions 11 shown

Conclusion 1

Conclusion · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Concluded (the committee's words)

The potential scale of renewable energy in Scotland is huge. The abundance of natural resources can benefit individuals, organisations, and businesses across the UK. We welcome the targets set by the UK Government for net zero and look forward to seeing how the overarching net zero strategy will impact the renewable energy sector in Scotland and look forward to seeing how this will be reflected in the upcoming Spending Review.

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Recommendation 2

Recommendation · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Recommended (the committee's words)

The grid is critical for renewable energy to reach consumers. Urgent investment is needed in the grid to ensure that net zero targets are met. The grid needs to be reinforced and expanded to ensure that renewable energy generated in Scotland can connect to the grid and benefit the rest of the UK. We recommend that Ofgem completes a review of the grid in Scotland as a matter of urgency, and at the latest by the end of 2022 to implement changes in good time for the 2045 target. Ofgem should make bold decisions by prioritising reinforcement of the grid in areas where there is potential for a high renewable energy yield. Since net zero targets have already been set in law, Scotland should be enabled to play its part fully in the renewable energy mix of the UK.

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Conclusion 3

Conclusion · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Concluded (the committee's words)

The evidence we have heard has highlighted issues around the volatility of transmission charges. The short-term volatility of transmission charges is a barrier to the development of renewable energy as it affects confidence in investment and the future cost of a project.

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Conclusion 4

Conclusion · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Concluded (the committee's words)

Locational transmission charges weigh more heavily on developers in Scotland when projects in other areas of the UK, like Wales, are paid to connect to the grid. The financial burden of transmission charges and grid investment needs to be justly shared across the UK and not fall heavily, and unjustly, on the developers of renewable energy projects in Scotland. The current review by Ofgem about locational transmission charges is not happening at a fast-enough pace.

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Recommendation 5

Recommendation · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Recommended (the committee's words)

We recommend that the UK Government specifies that, as part of its internal review, Ofgem must consider the financial burden of transmission charges in Scotland. Ofgem should consider the long-term impacts on net zero targets and aim for a way to ensure renewable energy projects have the chance to flourish over the next 30 years, rather than pushing for a short-term, lowest cost view. Ofgem should publish the result of their internal transmission charges review as soon as practicable, and certainly within six months.

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Recommendation 6

Recommendation · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Recommended (the committee's words)

Ofgem is considering net zero targets in their planning. However, we are convinced by significant evidence to suggest that more emphasis should be put on net zero and this should be made explicit and formalised within Ofgem’s remit. We recommend that the UK Government amend Ofgem’s statutory duties to consider net zero targets in all its decision making, alongside the duty to protect the interests of existing and future consumers.

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Recommendation 7

Recommendation · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Recommended (the committee's words)

Contracts for Difference (CfD) has been useful in driving down the cost of offshore wind and provides certainty to developers of renewable technology, but more could be done to improve the CfD system. By focusing on net zero goals the CfD could be realigned to prioritise best value, not just lowest cost. We recommend the next CfD round should prioritise renewable energy systems, not just at the lowest cost, but with a long-term view that focuses heavily on net zero targets and best value for money, up to 2050.

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Recommendation 8

Recommendation · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Recommended (the committee's words)

The UK is at the forefront of tidal renewable energy technology, but the UK Government must invest more in this sector to ensure that the UK retains its world leading position. A laissez-faire approach risks the UK being left behind again, as happened when Denmark eclipsed the UK in its approach to the offshore wind market. The UK can become world leaders within the tidal energy sector if the right level of investment is introduced and sustained. We welcome the announcement of the tidal stream strike price, but there is concern that this is not the correct funding mechanism for emerging renewable technology. This investment could also bring huge export benefits to the UK. We recommend that guaranteed financial support be provided by the UK Government for development of tidal energy through the CfD mechanism. This investment will be able to bring tidal energy generation to market to maximise the potential of renewable energy in the UK, give confidence to investors, and increase exports of tidal technology.

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Conclusion 9

Conclusion · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Concluded (the committee's words)

The Scottish Government suggested in analysis that 130,000 green jobs could have been created by 2020, we are disappointed that the evidence we received from Unite the Union stated that only 6% of this was reached. Funding for a green recovery from the UK and Scottish Governments is welcome and we look forward to seeing how this improves job prospects for the people of Scotland including upskilling workers. This is vital to meet renewable energy and net zero targets. The evidence presented to us has exposed the interconnectivity between pipelines of energy projections, the supply chain, funding, and grid capacity and if these factors align, then jobs will follow.

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Recommendation 10

Recommendation · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Recommended (the committee's words)

We recommend that the Scottish Government progress their Green Jobs Fund more rapidly and the UK Government should use part of the £12 billion outlined in the Ten Point Plan to invest in renewable energy in Scotland. This investment should focus on the pipeline of energy projects in Scotland including established and emerging renewable technology. This investment could provide economic multipliers in terms of jobs and improved prospects for renewable energy companies and the people of Scotland.

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Conclusion 11

Conclusion · Fourth Report - Renewable energy in Scotland · Addressed to Scotland Office

Concluded (the committee's words)

Due to the wide subject of renewable energy, we were not able to focus on all issues that have been raised. Green hydrogen and Carbon Capture Utilisation and Storage 24 Renewable energy in Scotland (CCUS) need dedicated time to see how the technologies can help grow jobs in renewable energy and achieve the best for the people of Scotland. We may return to these subjects later in the Parliament.

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Reports

1 report

Fourth Report - Renewable energy in Scotland

HC No.: HC 51
Published: 17 Sep 2021
Items: 11
Government response: Government response published 1 December 2021 (deadline 17 November 2021). Read the government's response ↗

Oral evidence sessions

4 sessions

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Date	Session and witnesses	Source
12 Jul 2021	Oral evidence session John Waldron · Department for Business, Energy & Industrial Strategy, Rt Hon Anne-Marie Trevelyan · Department for Business, Energy & Industrial Strategy	View ↗
5 Jul 2021	Oral evidence session Bob MacGregor · Unite the Union, Dave Moxham · Scottish Trades Union Congress (STUC)	View ↗
28 Jun 2021	Oral evidence session Christopher Milne · Orbital Marine Power, Dr Gareth Davies · Aquatera, Neil Kermode · European Marine Energy Centre Ltd (EMEC), Steven Bruce · Orkney Islands Council	View ↗
27 May 2021	Oral evidence session Neil Douglas · BVG Associates, Professor Karen Turner · University of Strathclyde, Professor Keith Bell · UK Energy Research Centre	View ↗

Who gave evidence

11 witnesses

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Witness	Organisation	Sessions
Bob MacGregor · Industrial officer	Unite the Union	1
Christopher Milne · Chief Financial Officer	Orbital Marine Power	1
Dave Moxham · Deputy General Secretary	Scottish Trades Union Congress (STUC)	1
Dr Gareth Davies · Managing Director	Aquatera	1
John Waldron · Policy Lead for Renewable Electricity Futures	Department for Business, Energy & Industrial Strategy	1
Neil Douglas · Director	BVG Associates	1
Neil Kermode · Managing Director	European Marine Energy Centre Ltd (EMEC)	1
Professor Karen Turner · Director, Centre for Energy Policy	University of Strathclyde	1
Professor Keith Bell · Co-Director	UK Energy Research Centre	1
Rt Hon Anne-Marie Trevelyan · UK International Champion on Adaptation and Resilience for the COP26 Presidency and Minister for Energy, Clean Growth and Climate Change	Department for Business, Energy & Industrial Strategy	1
Steven Bruce · Project Officer (ReFLEX)	Orkney Islands Council	1

Correspondence

4 letters

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Published	Direction	Letter
10 Jan 2022	Not recorded	Correspondence with Rt Hon Greg Hands MP, Minister of State for Energy, Clean Growth and Climate, follow-up to the UK Government’s response to the Committee’s Renewable energy in Scotland Report, dated 7 December 2021 and 5 January 2022
20 Jul 2021	Not recorded	Correspondence with Rt Hon Anne-Marie Trevelyan MP, Minister for Energy, Clean Growth and Climate Change at Department for Business, Energy & Industrial Strategy, follow-up to the oral evidence session on 12 July, 13 and 15 July 2021
15 Apr 2021	To committee	Letter from Rt Hon Kwasi Kwarteng MP, Secretary of State for Business, Energy & Industrial Strategy, on Energy policy update - North Sea Transition Deal, 24 March 2021
15 Apr 2021	Not recorded	Letters from Christoph Harwood, Director of Policy and Strategy, Simply Blue Group, on floating offshore wind off Peterhead, 5 March 2021 and 8 April 2021

Meetings & visits

1 item

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Date	Type	Detail	Source
13 Sep 2021	Formal meeting (private meeting)	Not recorded · The Wilson Room, Portcullis House