Energy Minister Jim Mather
Holyrood Parliament
January 17, 2008
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I am pleased to open this debate on the UK Energy Bill which was published last week. I look forward to the debate this morning and to setting out the approach of this Scottish Government, both towards:
- those parts of the bill which impact upon Scotland and on our energy future more generally
Let me start by stating our view on a number of key aspects of the bill.
In doing so members will not be surprised if I begin on nuclear power.
Our approach is clear - Scotland does not want or need new nuclear power.
The facts are:
- We are already meeting a very large part of our energy needs from non-nuclear sources
- We have massive potential for exploiting our significant renewables resources
- We are also capable of reducing our reliance on fossil fuels energy supplies while making those clean
- Our Non-nuclear strategy will foster indigenous growth and export potential of energy, technology, expertise and products
The views of this government are unequivocal in terms of nuclear power - AND the UK government has recognised that strength of feeling. The nuclear provisions in the UK bill, which deal with nuclear decommissioning and waste, do not extend to Scotland.
Parliament should, however, know that the UK government did not let the Scottish government see these nuclear provisions until the day the bill was introduced in Westminster. We have expressed our disappointment that Scottish Ministers were not consulted in the normal way.
Meanwhile the data proves that Scotland does not need nuclear power. Figures from the UK government itself, published only last week, show that in 2006 Scotland supplied the equivalent of 92 per cent of its electricity needs from a mix of fossil fuels, renewable and pumped hydro storage.
In that same year, while the total amount of electricity generated in Scotland rose by 10 per cent the amount of electricity generated from nuclear fell by a quarter.
Parliament should accept that we are already looking at a future beyond nuclear power in Scotland.
Those who favour nuclear power and comment upon the variability of other sources need to recognise that nuclear power itself has been unreliable. In 2006, the latest year for which we have official figures, the share of Scottish electricity generated from nuclear stood at 2 per cent, not the 40 per cent figure that the Scotland Office chose to quote last week. And we already know that 2007 has seen similar problems at Hunterston.
There are many reasons why we are opposed to new nuclear power - unanswered questions about the storage and disposal of nuclear waste; concerns about security and health and of course cost.
We noted that when the UK government introduced the bill it stated that the industry would be responsible for the costs of building, operating and maintaining new nuclear power station and for dealing with waste.
David Cairns, Minister of State from the Scotland Office stated that such costs 'mustn't fall on the individual energy consumer, it must be the company that bears that cost' - so the UK government states that:
1. These costs should not be borne by the taxpayer
2. That they shouldn't fall on the consumer
But they have to fall somewhere. Both statements cannot be right and experience tells us that costs will undoubtedly be passed onto consumers in the form of higher energy bills.
As an aside, for a general view on this issue I would refer members to the article by Iain McWhirter in last week's Sunday Herald which highlighted the strategic and economic benefits of developing renewables within Scotland even from a UK perspective.
Energy Mix and Baseload
Presiding Officer, while we are clear in our targets and ambitions for renewables, we recognise that Scotland's future energy needs cannot be met by renewables alone - we require an energy mix with a range of sources and a clean baseload.
We are obviously aware of the need for reducing carbon emissions - our target of reducing emissions by 80% by 2050 shows clearly the importance we place on this.
This parliament will also know the priority we are attaching to the development of Carbon Capture and Storage (CCS) technology in Scotland -technology which has the capacity to reduce carbon emissions by 90%.
Scotland is showing the way in a number of ways. For example, Scottish Power has announced a feasibility study of clean coal technology at Longannet. The company have also announced their plans to undertake a research project with Edinburgh University to investigate storing greenhouse gases underground in the Firth of Forth - the first UK project of its type
The Scottish Government has also agreed to part fund, alongside industry, a broader university led study, looking at wider CO2 storage options in Scotland. I hope to announce project partners very shortly.
We were of course very much in favour of the proposed CCS project at Peterhead, - but the slow pace of the UK government, along with their subsequent decision to rule out gas fired stations such as Peterhead from being eligible for their competition has damaged that project. However, it is my hope that other Scottish bids will be put forward for this competition.
Meanwhile, we agree with the UK government that a dedicated regime for regulation of carbon storage is required; the UK Energy Bill could provide a common UK framework for storage - a move that would be welcomed by the energy industry and would help it build global competence in this critically important technology.
Members will know that this is an issue relating to waste. Hence control of carbon storage is a devolved matter within Scottish territorial waters up to 12 nautical miles (nm).
Therefore the Scottish Parliament has to agree to the UK legislating on its behalf. However, the 12 nm limit is an artificial boundary and we have proposed to the UK Government that Scottish Ministers exercise new powers both within and beyond 12 nm.
Disappointingly, the UK Government has not agreed. Indeed, the UK Government has currently excluded Scottish territorial waters from the Bill. We regret this and wish for a sensible discussion with UK Ministers.
We hope that progress can be made around further extension of powers, but we are prepared to introduce our own Bill on this matter if necessary..
Renewables
Earlier I touched on the potential of renewables but we are moving beyond potential - there have already been significant increases in renewable output and the installed capacity of renewables is now above that of nuclear power. Looking forward, we have increased the target for generating electricity from renewable sources to meeting 50% of Scottish demand by 2020, with an interim milestone of 31% to be achieved by 2011.
Furthermore, by basing the targets on whole demand - which includes transmission losses - the generation required to achieve these targets is greater than under the previous method of calculation. This is in line with international practice and will prove a more robust basis for comparison
Meanwhile - we want to develop as wide a range as possible of renewable technologies and to deploy these so as to have a more decentralised system of energy generation including a significant increase in microgeneration.
We will build on the success of onshore wind and hydro. Biomass energy is making an increasing contribution to electricity and heat and I am sure that Mike Russell will refer to that later. We are also determined to maintain Scotland's global lead in marine energy - we will continue to work with industry to remove barriers to the further development of our renewables sector, including the need for a fundamental reform of the transmission access and charging regime.
The Energy Bill introduces changes to the Renewables Obligation mechanism. A system of banding for renewables obligations certificates (ROCs) will allow higher support for emerging technologies. We support these provisions, which develop the aim of this Parliament's own Marine Supply Obligation
The current devolution of the RO powers will be maintained enabling the Scottish Government to provide the appropriate levels of support for wave, tidal and biomass developments located HERE in Scotland.
We expect to publish a consultation in the spring. We reserve the right to suggest a different approach to banding from the UK - for example we consider that 2 ROCs for Marine is insufficient
Summary
We welcome the widening and maturing of the Energy debate in Scotland.
We welcome some parts of the UK Energy Bill such as on renewables.
We also recognise the importance of a regulatory regime for carbon storage and hope that we can have a sensible discussion with the UK Government around executively devolved powers beyond 12 miles.
We welcome the recognition by the UK government of this Parliament and Government's powers in relation to nuclear energy.
We welcome the increasing level of investment being made by the industry - accruing from the strong signals that this Government is giving the energy sector
However the introduction of the bill does highlight how the current devolution settlement prevents the right decisions being taken on Energy policy for Scotland. The way that the Bill is drafted is proof of this, with overlapping competence between the UK and Scottish Parliaments on offshore carbon storage and renewables.
We need full control of all Energy powers and associated revenues - and in the months to come we will be setting out more fully, as part of the national conversation, our views on energy powers.
In the meantime we will work to ensure that the UK Energy Bill gives Scotland the powers it needs and deserves.