The renewable energy sector in Scotland Contents

5Carbon emission and renewables targets

97.The driving force behind support for the renewable energy sector is the widely recognised need to reduce global carbon emissions, and so reduce the risks of climate change. This need is recognised in several international, UK and Scottish targets for reducing carbon emissions, and increasing the proportion of energy needs which are met by renewable technology. These are set out below.





98.Around a quarter of the UK’s carbon emissions are produced by the generation of electricity.177 Decarbonising the electricity supply is therefore a key part of meeting carbon emission targets. The Committee on Climate Change has stated that meeting the UK’s climate targets requires a largely decarbonised power sector by 2030,178 and increasing the proportion of electricity which is generated by renewable technology is recognised as an important element of this response.179 The evidence we received from the Department of Energy and Climate Change noted the importance of renewables to meeting carbon targets:

The Climate Change Act sets a target to reduce UK greenhouse gas emissions by 80% by 2050, compared to 1990 levels. Scotland also has a 2050 emissions target which is aligned with the UK’s. Renewables are playing an important role in decarbonising heat, power and transport sectors, and helping us to meet carbon budgets on the way to meeting our 2050 target.180

99.Given the significant commitments the EU has made to reducing carbon emissions, and increasing the deployment of renewable technology, it is impossible not to note the possible implications the UK’s withdrawal from the EU could have for renewables in the UK. Although both the UK and Scotland have their own carbon emission targets which go as far as any international commitments, ahead of the referendum concerns were expressed that the UK’s departure from the EU would create two years of uncertainty while negotiations regarding the UK’s withdrawal from the EU proceed,181 and also make it easier for a UK Government to change its policy regarding climate change obligations, as only domestic commitments would need to be rescinded.182

100.We have received some evidence questioning the assumption that man-made carbon emissions have contributed or will contribute to global warming,183 but this is set against an overwhelming consensus that the risks posed by carbon emissions and climate change are significant, and that action must be taken to respond to them. Successive governments, including the present one, have recognised the threat posed by climate change, and committed to taking action to reduce the UK’s carbon emissions.184

101.It is widely recognised that climate change is a real and present danger at a global and national level. Reducing carbon emissions is essential to combat the risks posed by climate change. To that end, international communities, the UK and Scotland have all committed to challenging targets for reducing carbon emissions and increasing the proportion of the UK’s energy which is generated by renewable technology. We welcome these targets and note that, in order to meet them, it is essential that the UK has the right policy framework to support the development of a thriving renewable sector.

Meeting carbon emission and renewables targets

102.Although there is a general consensus that the UK is on track to meet 2020 targets for renewable electricity and carbon emissions, there are fears that the Government has taken too short-term a view when it made recent policy changes, and that they will make it more difficult to meet future targets.185 The Committee on Climate Change has stated that the Government’s £7.6 billion spending limit for 2020–21 should be sufficient for the UK to meet 2020 carbon budgets, but has warned that action to limit spending could risk undermining investor confidence, creating a stop-start profile for renewable projects, and lead to missed opportunities if some projects have to be abandoned.186

103.Several of our witnesses highlighted the short-term focus of the Government’s recent decisions, and argued that this would create challenges for meeting post-2020 targets. Joan MacNaughton, Executive Chair of the World Energy Trilemma Study Group for the World Energy Council, told us she was disappointed that the sole focus of recent policy announcements seemed to be 2020, and said there were going to be real challenges in meeting the carbon budgets after 2020.187 Similarly Gareth Williams, Head of Policy for the Scottish Council for Development and Industry, told us: “The 2020 targets are not unimportant, but we need to be thinking about 2030, 2050 and how we hit carbon budgets to climate change targets at those times. I am not sure we can say that the strategy that is in place is taking us in that direction.”188 The Committee on Climate Change has described the absence of planning for support post-2020 as a “policy gap” which needs to be addressed.189

104.In terms of Scotland-specific targets, it was recently announced that Scotland had achieved its carbon emission reduction target for 2020, of reducing emissions by at least 42% of the 1990 baseline, six years early.190 This was in no small part down to Scotland’s success decarbonising the generation of electricity in Scotland. However, recent policy changes have created a substantial risk that the Scottish Government’s 2020 target, to generate the equivalent of 100% of Scottish electricity using renewable technology, will not be met.191 Scottish Renewables has stated that the recent policy changes mean that “Scotland is now likely to fall short of its 2020 renewable energy targets”, because new projects are unlikely to proceed before 2020.192 Similarly, the Scottish Government Minister for Business, Innovation and Energy told us that “Scotland’s ability to achieve its renewable energy targets is now being put at risk by the decision of the UK Government to cut support for renewable projects” and the withdrawal of funding from onshore wind meant it was going to be more challenging to meet their target of generating the equivalent of 100% of Scotland’s electricity from renewables.193

105.We have also heard that there is a possibility the UK will miss its overall renewable energy target for 2020, as so little progress has been made on heat and transport.194 The UK’s 2020 target for renewables is to generate 15% of energy from renewables. The total energy target takes into account heat and transport as well as electricity and although the UK Government has stated that it is on target to meet its sub-goal of 30% of electricity generation from renewables, we have heard that in light of the fact targets on heat and transport are highly unlikely to be met, the target for renewable electricity should be increased, and recent policy changes are inconsistent with such an ambition.195 The National Grid recently published a report looking at future energy scenarios for the UK, and found that there was no scenario where the UK met its 2020 renewable energy targets.196

106.The then Minister of State told us that “even with the cost control measures we have taken, we are still on track to deliver 35% of the UK’s electricity from renewables in 2020, exceeding our ambition of 30%.”197 She also made it clear that the Government was “committed to meeting our climate change targets”.198 The Minister acknowledged that the Government still needed to finalise some of the policies which would be needed to achieve Fourth Carbon Budget, covering 2023–28.199 The Government has accepted the Committee on Climate Change’s recommendation for the Fifth Carbon Budget, that carbon emissions be reduced to 57% of 1990 levels by 2032,200 but has yet to set out its plans for how this will be achieved.

107.There is a significant risk that recent policy changes, and in particular the UK Government’s decision to end all new subsidies for onshore wind, will mean that the Scottish Government is unable to achieve its goal of generating the equivalent of 100% of Scotland’s electricity needs from renewable technology by 2020. The Scottish Government developed this target at a time when UK Government policy was considerably more supportive of the deployment of renewable technology, including onshore wind. It is disappointing that the Scottish Government’s ambitions in this area appear to have been stymied by actions taken by the UK Government, particularly given the clear evidence we have received about the lack of meaningful consultation with the Scottish Government over these decisions.

108.Although recent policy changes are unlikely to mean the UK’s carbon emission or renewable electricity targets for 2020 are missed, the Government has not set out how recent policy decisions will affect the UK’s ability to meet post-2020 targets. The Government’s recent decisions about support for renewables over the next few years will have implications for the deployment and cost-reduction of renewable technology in Scotland and across the UK which will affect the UK’s ability to meet carbon and renewables targets far beyond 2020. It is not clear the Government has taken this into account in the formation of recent policy affecting renewables.

Gas plants and Carbon Capture and Storage

109.The Government has been clear that it sees gas power plants as a “bridge” between conventional generators and cleaner energy,201 and expects gas power plants to form part of the UK’s electricity mix through to at least the mid-2030s.202 However, although generating electricity from gas power plants produces considerably lower carbon emissions than coal power plants, it is far from being a low-carbon means of electricity generation.203 The Committee on Climate Change has stated that Carbon Capture and Storage (CCS) is of “critical importance” to meeting the UK’s climate targets,204 and Joan MacNaughton told us that gas can only form part of a low-carbon network if there is Carbon Capture and Storage technology.205 The National Grid’s recent report on future energy scenarios for the UK also argued that CCS is one of the key technologies which will be needed to meet future carbon emission targets.206

110.The UK Government had been planning to invest £1 billion to support the design, construction and operation of the UK’s first commercial-scale CCS projects.207 This funding was intended to generate learning that would help drive down the costs of CCS, test and build familiarity with the regulatory framework for CCS, and encourage industry to develop suitable business models. One of the projects under consideration, which would have been based in Aberdeenshire, planned to capture around 85% of the carbon dioxide from an existing combined cycle gas turbine (CCGT) power station at Peterhead. However, in November 2015, the Government announced that “the £1 billion ring-fenced capital budget for the Carbon Capture and Storage (CCS) Competition is no longer available” and that “the CCS Competition cannot proceed on its current basis”.208

111.Several of our witnesses expressed disappointment at the Government’s decision to pull funding for CCS.209 The Scottish Government Minister for Business, Innovation and Energy told us that this was a case of the UK Government raising hopes and then “pulling the rug from under those who have invested a lot of money in developing the proposals.”210 The Energy and Climate Change Committee has said that pulling the plug on the CCS competition came as a shock to the industry and investors, and “was damaging both to the relationship between Government and the industry, and to investment into the UK”. That Committee recommended that DECC promptly devise a new strategy for CCS.211 The then Minister of State for Energy and Climate Change told us that she thought CCS would be “part of our future”, but that it was still extremely expensive and the intended investment had been pulled as part of the Spending Review process of looking at the value for money of planned spending.212 She said that DECC looked forward to “making announcements on our ongoing strategy for CCS during this year”.

112.If, as the UK Government hopes, gas power plants are to act as a bridge from conventional electricity generation to low carbon electricity generation, it is desirable that Carbon Capture and Storage (CCS) technology be installed on gas power plants. In light of this, the Government’s decision to pull the £1 billion it had planned to invest in CCS is extremely disappointing, and has put at risk the UK’s chances of leading on the development of a technology which will be of global importance in the coming years. We therefore welcome the Minister of State’s indication that the Government will be making announcements this year about its strategy for CCS, and look forward to seeing these.

171 European Commission, Paris Agreement, February 2016

172 Renewables Directive, Directive 2009/28/EC

173 UK Government, National Renewable Energy Action Plan for the United Kingdom, 2009

174 European Commission, 2030 climate and energy framework, February 2016

177 Department of Energy and Climate Change, 2014 UK Greenhouse Gas Emissions, February 2016

180 Department of Energy and Climate Change (RSS0055)

181 UK Energy Research Council, Brexit vote likely to mean two years of uncertainty for UK energy, May 2016

182 The Royal Institute of International Affairs, UK Unplugged? The Impacts of Brexit on Energy and Climate Policy, May 2016

183 Douglas Brodie (RSS0010)

184 HC Deb, 17 September 2015, col 1172 [Commons Chamber], Prime Minister’s Office, PM speech to the COP21 summit in Paris, November 2015, HM Government, The Coalition: our programme for government, May 2010, Department for Trade and Industry, Our Energy Challenge: Creating a Low Carbon Economy, Cm 5761, February 2003

185 Green Highland Renewables Ltd (RSS0007), WWF Scotland (RSS0016), Stop Climate Chaos Scotland (RSS0037), Energy Saving Trust (RSS0048)

187 Q76

188 Q233

189 Committee on Climate Change, Meeting Carbon Budgets – 2016 Progress Report to Parliament, June 2016

190 Scottish Government, Scotland exceeds 2020 climate targets, June 2016

191 Q23, E.ON (RSS0029), RSPB Scotland (RSS0041), Nuclear Free Local Authorities Scotland (RSS0065)

192 Scottish Renewables (RSS0018)

193 Qq 401, 416

194 Independent Renewable Energy Generators Group (RSS0031)

195 MEG Renewables (RSS0005)

196 National Grid, Future Energy Scenarios, July 2016

197 Q437

198 Q447

199 Q502

200 Department of Energy and Climate Change, Carbon Budgets, accessed July 2016

201 Q507

202 Department of Energy and Climate Change, Updated energy and emissions projections: 2015, November 2015

203 Committee on Climate Change, Power sector scenarios for the fifth carbon budget, October 2015

204 Committee on Climate Change, Meeting Carbon Budgets – 2016 Progress Report to Parliament, June 2016

205 Q89

206 National Grid, Future Energy Scenarios, July 2016

207 Department of Energy and Climate Change, UK carbon capture and storage: government funding and support, 22 January 2013

208 Department of Energy and Climate Change, HM Government Statement to Markets Regarding Carbon Capture and Storage Competition, 25 November 2015

209 Scottish Council for Development and Industry (RSS0035), E3G (RSS0044)

210 Q419

211 Energy and Climate Change Committee, Future of carbon capture and storage in the UK, Second Report of Session 2015–16, HC 692

212 Q505

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20 July 2016