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2020 Routemap for Renewable Energy in Scotland

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Executive Summary

The Routemap for Renewable Energy in Scotland 2011 is an update and extension to the Scottish Renewables Action Plan 2009. The original Renewables Action Plan set out short term actions towards the delivery of 2020 targets for renewable energy. This updated and expanded Routemap reflects the challenge of our new target to meet an equivalent of 100% demand for electricity from renewable energy by 2020, as well as our target of 11% renewable heat.

The new Routemap presents actions which are focussed on targets, within the current development of UK regulatory support, arguing constructively for the UK Government to ensure that such support matches Scotland's ambitions.

The Routemap should be viewed alongside the draft Electricity Generation Policy Statement, which is currently being updated, to understand how renewable technologies fit within the wider energy mix for Scotland. We are aiming for an output equivalent to 100% of Scotland's demand for electricity to be met from renewables, but it will be very important to understand that this does not mean Scotland will be 100% dependent on renewables generation: renewable energy is part of a wider electricity mix.

The draft Electricity Generation Policy Statement sets out the Scottish Government's position on the role of renewable electricity and fossil fuel thermal generation (coal, gas, oil) in Scotland's future energy mix, and is being updated in the context of the new target of the equivalent of 100% electricity demand to be met from renewables by 2020. The draft statement gives a clear view on the need for both rapid expansion of renewable electricity across Scotland and the underlying requirement for new or upgraded efficient thermal capacity in this low carbon generation portfolio, progressively fitted with CCS. It confirms our policy to phase out existing nuclear power stations as they reach the end of their operating lives, and shows that all of Scotland's future energy needs can be met without the need for new nuclear power stations. It is based on research studies on future energy supply, storage and demand, and takes account of the changing policy context in Scotland, the UK and the EU since the Second National Planning Framework was published in June 2009.

Progress to Date

Our deployment record is good, with Consent for 42 large-scale renewable electricity schemes worth over 2 GW in the past four years, and much more in the system:

Progress to Date

Targets

Targets and implications are set out as follows:

100% electricity demand equivalent from renewables by 2020: a formidable but achievable goal exploiting Scotland's rich renewable resources and our determination to exploit them for economic and carbon benefits. Detailed plans are in place to make progress, particularly to realise our offshore renewables ambitions, but this potential will need to be recognised in the regulatory framework being developed at a UK level;

11% heat demand from renewables by 2020: significant progress has been made towards this goal, with Scotland leading the way in the UK at 2.8% heat demand already being met from renewables. But the challenge remains significant, particularly as we need to ensure best use of this limited resource as demand begins to grow, and that impacts on existing biomass users are mitigated. These issues will be included in our forthcoming review of support for large-scale electricity-only biomass under the Renewables Obligation Scotland;

New target of at least 30% overall energy demand from renewables by 2020: our recently increased target for renewable electricity will allow us to raise the bar for our energy ambitions overall, with an expectation that at least 30% of all energy demand (heat, and transport as well as electricity) will be met by renewables by 2020. This will take Scotland to twice the UK's share of the European target, highlighting our leadership in Europe on renewable energy;

New target of 500 MW community and locally-owned renewable energy by 2020: Scotland has led the way in the UK on community-owned energy schemes for the past decade with over 800 schemes supported from Unst to Moffat. With the advent of the Feed in Tariff and the Renewable Heat Incentive, the time is right to capitalise on this experience and transform the scale of local ownership, thus allowing communities and rural businesses to take advantage of the significant revenue streams that can accrue from this form of asset ownership.

The Challenge

Underpinning Scotland's ability to supply sufficient renewable electricity and heat to meet its targets in a cost-effective way is the principle of demand reduction. High demand requires more generating capacity to be built. Electricity demand may rise in the long term as greater use is made for transport and heat - therefore energy efficiency measures to minimise this rise will be crucial if electricity is to remain affordable. The Energy Efficiency Action Plan established a target to reduce total final energy demand in Scotland by 12% by 2020, covering all fuels and sectors. The actions set out in the full Renewables Routemap will be taken in tandem with our continuing drive to reduce demand.

Beyond demand reduction, there are a wide range of crosscutting challenges to be faced by the sectors that make up the renewables industry, all of which must be overcome if we are to realise our ambitions for 2020 and beyond:

Costs and access to finance - this is the main prize as well as the main challenge, with achievement of the 2020 electricity target alone estimated to be worth up to £30b investment in Scotland. Appropriate regulatory support will be vital, and the Scottish Government continues to work to ensure that the UK Electricity Market Reform ( EMR) matches Scottish ambitions. But there is also the challenge to develop the sector at least cost to the consumer to minimise impact on energy bills and mitigate fuel poverty;

Planning and Consents - the need to continue to streamline systems and work for greater speed and transparency, without sacrificing proper consideration of the impacts on the local environment;

Grid - the need for huge investment, including in offshore infrastructure, and to reform the inequitable charging system;

Fuel Sources - sustainability of supply is a key factor in the bioenergy and energy from waste sectors, where renewable energy objectives need to be carefully balanced against supply and other environmental considerations;

Skills - Scotland's workforce needs to be prepared to meet the opportunities that will emerge, with up to 40,000 jobs predicted to be created in the renewables sector by 2020;

Supply chain and infrastructure - the key focus of the Enterprise Agencies, with investment needed particularly to support the offshore energy revolution;

Innovation and R&D - again the Enterprise Agencies will be working to bring in inward investment and to grow Scottish companies;

Public engagement - renewable energy targets can not be met in the face of public opposition but only with the support and will of the Scottish public, gained through early and meaningful engagement on commercial schemes, and access to benefits - including the scope to develop community-owned schemes.

Deployment Trajectories

Renewable Electricity trajectory

The graph below demonstrates projections of potential patterns of deployment of renewable electricity capacity in Scotland, based on historical trends, with variables such as the speed of the planning system or the success of the Electricity Market Reform in matching Scottish ambitions.

The deployment of renewable electricity capacity depends on a number of complex and interdependent factors and as such these scenarios represent feasible but ultimately uncertain deployment profiles driven by the assumptions adopted.

Projections of Renewable Electricity Installed Capacity Based on Historical Data

Projections of Renewable Electricity Installed Capacity Based on Historical Data

The scenarios modelled in the chart above represent:

A. Deployment projection based upon an extrapolation of the annual deployment levels experienced in 2007-08.

B. Deployment projection based upon an extrapolation of the annual deployment levels experienced between 2009 and the start of 2011.

C. Deployment projection, based on Scenario B above, adjusted for the improvements in the planning/consent system that were introduced in recent years but which have not yet impacted upon actual deployment rates.

D. The 100% target line is a straight line extrapolation between current installed capacity and the estimated levels of capacity required to achieve 100% of gross consumption from renewables in 2020. This hypothetical line is incorporated to identify and acknowledge the scale of the challenge. In reality, it is recognised that deployment will not follow a straight line and would be expected to accelerate towards the latter part of the decade, particularly given the potential magnitude of offshore wind deployment.

Each of the modelled scenarios places the ambition of the Scottish Government in the context of the very successful levels of deployment seen in recent years. The successful delivery of the capacity required to deliver the equivalent of 100% of Scottish electricity consumption will demand a significant and sustained improvement over the deployment levels seen historically. This approach sets out a number of feasible deployment scenarios but does not shy away from the challenge that this ambition presents.

Renewable heat trajectory

The Scottish renewable heat database was updated in March 2011 to include information on renewable heat installations which are under construction or in planning. These can be used to provide an estimate of future renewable heat output in Scotland, although there is necessarily a large degree of uncertainty around such figures.

If all the projects currently under construction, and 50% of those in planning come to fruition, in addition to the known micro and small to medium installations, this could bring total renewable heat output in Scotland to an estimated 2,733 GWh a year, or around 4.5% of forecast Scottish 2020 nonelectrical heat demand within the next 3 years.

Indicative interim milestones towards the 2020 target for renewable heat, compared with actual heat output in 2010.

Figure 2: Indicative interim milestones towards the 2020 target for renewable heat' compared with actual heat output in 2010

Based on the rate of increase from 2008/09 to 2010, Scotland appears to be on track to meet its renewable heat target for 2020.

Sectoral Routemaps

The full Routemap provides status reports on deployment to date, by individual sector and identifies the main actions required to make progress to wards 2020 targets.

Headline actions for offshore technologies include maintaining stability of market incentives and level of support; investment in infrastructure; support for innovation; capital support (for wave and tidal), and a positive resolution of the issue of inequitable grid transmission charging.

Headline actions for onshore electricity technologies include maintenance of market incentives as appropriate, including the need to review support for large-scale electricity-only biomass, continued improvements in grid and planning, improved engagement with communities, and following up last year's " Securing the Benefits" consultation to provide greater clarity to communities from commercial schemes

Headline actions for heat-based technologies include ensuring best use of biomass, rolling out heat mapping, building on the current study on recovery of heat from fossil fuel power stations, and setting up an expert commission into the development of district heating.

The Scottish Government is also committing, through the new Routemap, to develop new strategies for microgeneration and for agri-renewables, to reflect the growing significance of small scale generation and opportunities for local and rural ownership of energy. We will also work with investors to establish a new Green Equity Fund for community renewables to ensure that the potential transformation of the scale of local ownership can be realised.

Conclusion

Across all scales of renewable generation, from householder to community to large-scale commercial schemes, the Scottish Government is working to make Scotland the renewables powerhouse of Europe. The benefits are not only in terms of energy generation and future security of supply, but can underpin our economic recovery over the next decade and beyond.

This Routemap for Renewable Energy in Scotland sets out how we can meet our challenging targets in harmony with the local environment and make a wider contribution to emission reductions through the displacement of fossil fuel generation.