Lesley Riddoch: Lack of funds but not of hot air

Like windfarms or not, green energy is a vital component in Scotland's future. Picture: Ian Rutherford
Like windfarms or not, green energy is a vital component in Scotland's future. Picture: Ian Rutherford
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A dearth of investment from lukewarm Westminster is holding back Scotland’s green potential, writes Lesley Riddoch

DO TURBINES really “blight” Scotland’s landscape or do we have too little green energy production? Three recent reports tell very different tales.

Last week Conservative Murdo Fraser said the SNP’s promotion of wind farms has spun “completely out of control” after statistics showed Scotland has half the UK’s onshore wind farms and twice the English total despite having 10 per cent of the UK’s population.

It’s possible to look at those figures quite differently. Should population size dictate the optimal size of an industry? By population share we should have one distillery, not hundreds, and half a hydro dam instead of a thriving industry. It’s the excellent quality of the wind and marine resource that explains Scotland’s higher share – and a majority of Scots in every opinion poll backs that scale of development.

The point behind the story – as ever – is that some people don’t like wind turbines. Some don’t like the sight of them, some believe a fossil fuel-based energy system can continue and is therefore cheaper, some prefer nuclear energy and some object to landowners and large companies trousering millions in cash while local people (usually) look on – highlighting the failure to achieve meaningful land reform before the wind revolution began.

But this weekend, a rather different tilt was given to the whole wind debate by the latest report from the Intergovernmental Panel on Climate Change (IPCC). The report, produced by 1,250 international experts and approved by 194 governments, warns carbon emissions are now growing at almost double the previous rate but suggests rapid action can still limit global warming to the internationally agreed safety limit, if low-carbon energy supplies triple or quadruple by 2050. The IPCC calculates such a move would shave just 0.06 per cent off expected world economic growth rates and would help combat cost-producing menaces like air pollution and energy insecurity.

In short, according to the IPCC, renewable-energy rich countries like Scotland must deliver more, not less, green energy – and deliver it fast.

So who’s right?

Perhaps yet another report sheds light. Last month Eurostat published the share of renewables in gross final energy consumption of each member state in 2012. Despite its excellent renewable resources, Scotland is part of a country with the third lowest proportion of green energy in its mix.

Renewables make up 1.4 per cent of total energy consumption in Malta, 3.1 per cent in Luxembourg and a miserable 4.2 per cent in the UK. The European average is 14.1 per cent and the best performer amongst the EU states is Sweden, with 51 per cent. Indeed, Sweden, Estonia and Bulgaria have already reached their EU targets for 2020. Meanwhile, the UK is furthest from reaching its 2020 renewable goals – and that sluggishness doesn’t just relate to wind, but also to hydro, tidal, wave, solar and biomass. Energy is entirely reserved to Westminster, so Alex Salmond is not to blame.

Still, Brian Wilson argued last week that independence would jeopardise Scotland’s renewable sector because the rUK would not continue to buy “expensive Scottish renewables [when] they could get low carbon electricity from somewhere cheaper. The immediate victims of the investment freeze include the three Scottish island groups which need that UK-wide consumer subsidy to underpin the huge investments which their hopes for renewables require.”

His comments entirely misrepresent the reason for the island development logjam. According to BBC Scotland’s Business Editor Douglas Fraser: “The old regime has penalised those furthest from population centres, as an incentive to build power stations near cities, and to reduce loss of power over distance. But as the best of renewable energy is located far from cities… there’s a need to change that grid access charging regime. Charges in the north should come down, while subsidies in the south [should be removed]. Until the new regime is [established], generators are reluctant to commit to big investments. That helps explain why there are no offshore windfarms off northern Scotland, and more activity off the east English coast.”

This pricing regime is a UK government responsibility – so too the news last month from UK Energy Secretary Ed Davey that Ofgem has delayed a crucial review for a further two years. Why? Because an English-based power company objected to equalising access charges. Meanwhile, no Scottish companies are in the UK government’s shortlist for long-term offshore wind energy contracts.

In short, Scotland’s renewable energy-rich islands are still basically off grid waiting endlessly for inter-connectors to allow wind, wave and tidal development to go ahead and a fair pricing regime to sell their electricity. The way the electricity market was privatised, it’s up to energy companies to decide if this vital investment is justified and up to the UK government to press them, subsidise them or restructure the whole industry. It seems none of these options will happen.

Scotland has the best wind, wave and tidal resource in Northern Europe but only a tiny fraction of that is being developed right now. Brian Wilson worries about a future without UK investment, but there’s a chronic failure of UK investment right now – and not just in Scottish renewables. Despite massive subsidies, no UK companies bid to build and manage England’s new generation of nuclear power stations. French and Chinese firms will build Hinkley C. Perhaps the billions sloshing around the City of London is looking for far easier investment vehicles than energy, engineering or manufacturing – even when the opportunity lies right on the doorstep.

According to Ed Davey, independence would mean “the full costs of supporting large-scale Scottish renewables [for] Scottish bill payers would rise [by] £189 for households and £608,000 for a medium-sized manufacturer in 2020”.

That’s questionable. But no price has ever been put on the revenue, population, jobs and knowledge currently being lost to Scotland by a UK-based refusal to back Scottish renewables.

Mercifully, an iScotland need not depend on rUK and its lukewarm commitment to green energy. All the UK’s energy is currently traded in a European market which is unbothered about borders and more interested in energy exchanges to create efficiency and regional energy security. Thus countries with baseload energy generation will exchange with greener but intermittent sources to create a better energy mix for all.

This is the face of the future. Will anything short of independence let Scots join?