Publication - Strategy/plan

Climate change delivery plan: meeting Scotland's statutory climate change targets

Published: 17 Jun 2009
Directorate:
Energy and Climate Change Directorate
Part of:
Environment and climate change
ISBN:
9780755980741

The Climate Change Delivery Plan sets out the high level measures required in each sector to meet Scotland's statutory climate change targets, to 2020 and in the long term.

56 page PDF

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56 page PDF

0 B

Contents
Climate change delivery plan: meeting Scotland's statutory climate change targets
CHAPTER 3: ELECTRICITY DEMAND AND SUPPLY

56 page PDF

0 B

CHAPTER 3: ELECTRICITY DEMAND AND SUPPLY

Key messages

  • The traded sector has to deliver emissions reductions in 2020 of about 5 MtCO 2e
    (34% Scottish target) or about 9 MtCO 2e (42% Scottish target) against 2006 levels
  • Primacy is given to cost effective demand reduction including more efficient use of electricity
  • It is essential to deliver Transformational Outcome 1:

A largely de-carbonised electricity generation sector by 2030, primarily using renewable sources for electricity generation with other electricity generation from fossil fuelled plants utilising carbon capture and storage

  • As gas and oil use is largely phased out, there will be an increased demand for electricity from the heat and transport sectors
  • Scotland has huge natural and comparative advantages and could become a world leader in the development of both renewable electricity and carbon capture and storage
  • The delivery of the relevant Energy Pledges is essential (see Chapter 2)

Background

3.1 Electricity use by homes and businesses is primarily for lighting, information technology and white goods and, for those premises off the gas grid, heating.

3.2 Greenhouse gas emissions in 2006 from large scale production of electricity were equivalent to over 30% of total Scottish emissions. These emissions were largely from Scotland's three thermal power stations: Longannet (coal), Peterhead (gas/oil) and Cockenzie (coal). Cockenzie is currently scheduled to close by 2015 at the latest under European legislation, while the other power stations are currently expected to continue generating electricity beyond 2020. Actual greenhouse gas emissions fluctuate significantly year on year for various reasons including fuel price fluctuations, demand from consumers, changing weather patterns, and rising levels of renewable electricity.

3.3 Emissions from power stations fall within the traded sector. Renewable sources of electricity have zero net emissions. Scottish emissions from this sector, as recorded in the net Scottish emissions account (see Chapter 2) follow the trajectory set for the EU traded sector, regardless of total electricity production or the amount of renewable electricity.

3.4 Energy policy is formally reserved to the UK Government and the bulk of powers affecting energy regulation are exercised by the UK Department of Energy and Climate Change. However, the Scottish Government does have powers over: the planning and consenting of electricity generating stations and overhead transmission lines; the promotion of renewable energy including the operation of the Renewable Obligation; and the promotion of energy efficiency.

3.5 Among the key infrastructure projects which the second National Planning Framework designates as national developments are electricity grid reinforcements necessary to realise the potential of Scotland's renewable energy resources and baseload electricity generation projects which will enable Scotland to play a lead role in the development of carbon capture and storage technology.

Meeting Scotland's 2020 targets

3.6 As set out in Table 1 in Chapter 2, the traded sector has to deliver emissions reductions in 2020 from 2006 levels of about 5 MtCO 2e (34% Scottish target) or about 9 MtCO 2e (42% Scottish target).

3.7 This level of savings has already been set at an EU level through the Emissions Trading Scheme. To meet the 34% Scottish target, the allocated emissions for Scotland's traded sector will decline by around 23% by 2020 (see Table 1). To meet a 42% Scottish target, allocated emissions will have to decline by around 38%.

3.8 Measures in the electricity sector which contribute to the meeting of the EU Emissions Trading Scheme cap to 2020 include:

  • Demand reduction and management, and changing behaviour
  • Promotion of renewable electricity, including micro- and small-scale production
  • Efficiency standards in electrical products and appliances.

3.9 The measures and the actions relevant to the traded sector are summarised in Table 3 at the end of this chapter. They are considered more fully below as each of the main delivery mechanisms is considered.

Transformational Outcome 1: De-carbonising electricity generation

3.10 The primary transformational outcome for the traded sector is:

A largely de-carbonised electricity generation sector by 2030, primarily using renewable sources for electricity generation with other electricity generation from fossil-fuelled plants utilising carbon capture and storage.

3.11 This transformational outcome is the key to putting Scotland on the path towards a low carbon economy. The traded sector, on the basis of the present EU Emissons Trading Scheme provisions, is not designed to achieve this outcome. Additional interventions at UK and Scottish level are required over and above the current trajectory defined for the EU traded sector.

3.12 The measures needed to deliver the transformational outcome at reasonable economic cost are:

  • Reduction in overall electricity demand and increase in energy efficiency of products and appliances
  • Increase in renewable sources of electricity, including large-, small- and micro-scale developments
  • Decrease in carbon intensity of any remaining thermal generation, through the use of carbon capture and storage.

These measures and the actions required to deliver them are summarised in Table 3 at the end of this chapter. They are considered more fully below.

The main delivery mechanisms

3.13 The main delivery mechanisms to de-carbonise the electricity generation sector by 2030 are:

  • Managing demand/changing behaviour
  • Renewable electricity
  • Micro- and small-scale production of electricity; and
  • Large-scale electricity generation.

Managing demand/changing behaviour

3.14 The inclusion of electricity production in the traded sector means that reducing electricity use does not have any material impact on the emissions trajectory recorded in the net Scottish emissions account, since the emission reduction trajectory is set regardless of levels of electricity consumption. However, reducing wasteful use of energy improves social and individual welfare and is a critical step towards a low carbon economy. It can also result in significant financial savings for the public sector and commercial organisations. Given the expected increase in demand for electricity from transport and heating energy requirements, more efficient use of electricity will be needed to moderate overall increase in demand. A key challenge for society is to ensure organisations and individuals take up the potential benefits associated with using energy efficiently. In late summer 2009, the Scottish Government will consult on the Energy Efficiency Action Plan which will cover both electricity and heat use, and will:

  • Oversee the strategic direction of the Government's energy efficiency policies
  • Set out indicative energy savings needed from different sectors to contribute to greenhouse gas reductions
  • Set out key activities in each sector and identify key gaps in activity that need to be tackled. Activities include:
  • Replacing fuel poverty programmes with the Energy Assistance Package
  • Efforts to ensure Scotland retains a fair share of GB-wide domestic efficiency measures, funded through the GB-wide Carbon Emissions Reduction Target scheme
  • Bring forward further details for the first stage of an area based home insulation scheme.

3.15 A range of policies deliver financial and information support for more efficient use of electricity: including European appliance standards and labelling; new buildings standards; and actions undertaken under the UK supplier obligations to improve electrical energy efficiency in existing homes (see Chapter 2). The impact of individual behaviour is also critical in reducing electricity demand.

3.16 Evidence suggests that one of the barriers to householders taking action is that neither they, nor their suppliers, have sufficient knowledge about consumption levels within their house. To address this all households need smart meters to provide real time information on electricity consumption to the householder and supplier. The UK Government is committed to fitting smart gas and electricity meters to all homes by 2020 14.

3.17 More effective understanding of household and business electricity consumption can lead to more sophisticated approaches to demand management, such as the use of dynamic pricing (where the price is set by demand levels through the day). This will enable load balancing across the electricity grid to cope more effectively with intermittent renewable sources of electricity, as well as increasing supplies of electricity into distribution networks from communities and businesses.

3.18 Businesses already have multiple economic instruments applied to their electricity use to encourage demand reduction, including: the Climate Change Levy (or associated Agreements); the price feed-through from the EU Emissions Trading Scheme; and for large electricity consumers the forthcoming Carbon Reduction Commitment. There are no immediate gaps in this policy framework, though the rate of emissions reductions does yet not match the targets set out in the Climate Change (Scotland) Bill.

Renewable Electricity

3.19 Scotland's renewable electricity policy framework, which is based on the Renewables Obligation on suppliers to source an increasing level of renewable electricity, is designed to deliver targets of 31% gross electricity demand from renewable sources by 2011 and at least 50% by 2020. This equates to 8.4 GW of installed renewables capacity by 2020; current activity suggests that these targets will be met comfortably. Scotland is estimated to have up to 60 GW of raw renewable electricity resources, which could make Scotland a major exporter of renewable electricity to the rest of UK and further afield. Delivering the onshore and offshore grid connections that will connect, transport and export this renewable energy potential is challenging. There are significant regulatory, financial, logisitic and environmental considerations to address, which will involve balancing a range of policy considerations and views and making difficult decisions about developing Scotland's future grid network.

3.20 The requirement on the UK to meet EU renewable energy targets by 2020, equating to 15% of all energy use (including transport and heat) from renewable sources, will lead to strong demand from elsewhere in the UK for Scottish renewable electricity. Figure 7, taken from Volume 5 of the Scottish Energy Study 15, sets out the electricity generation mix in 2005 and projections for 2010, 2015 and 2020.

3.21 The renewable electricity targets can be met without significant grid investment beyond that currently approved by Ofgem. But additional grid reinforcement, which is currently being planned, will accommodate over 11 GW of Scottish renewables generation by 2020 and over 25 GW by 2030. A new Scottish Renewables Action Plan will be published for consultation in summer 2009.

Figure 7: Projected Scottish Electricity Generation Mix to 2020 (from Scottish Energy Study Volume 5, 2008)

Figure 7: Projected Scottish Electricity Generation Mix to 2020 (from Scottish Energy Study Volume 5, 2008)

3.22 While renewable electricity can deliver the majority of Scotland's needs by 2030, intermittent renewable sources of electricity require back-up or grid balancing generation. There is an important pipeline of fossil-fuel technology projects, which are flexible systems to provide back-up to renewable generation and where necessary provide support. The National Planning Framework identifies potential sites for clean fossil fuel development and the range of onshore grid reinforcement that will be needed to deliver Scotland's renewable energy future, as well as highlighting the importance of sub-sea grid. The Scottish Government will shortly publish a roadmap for developing carbon capture and storage to support the outcome of the decarbonisation of electricity production by 2030. In addition, more sophisticated ("smart") grid balancing approaches are being developed, using dynamic demand management and distributed two way charging (for example from using electric vehicles plugged into the grid), ultra-capacitors, and hydrogen fuel cells.

Micro- and small-scale production of electricity.

3.23 Low carbon energy production by households or communities blurs the distinction between the electricity and heat sectors at local levels. Measures with abatement potential and milestones from these activities are reported in the heat sector chapter. This will include activities associated with any potential feed-in tariff for electricity.

Large-scale electricity generation

3.24 Both the Scottish and UK Governments are working to promote the deployment of carbon capture and storage demonstrators at fossil fuel power stations and will be consulting this summer on appropriate financial incentives. This approach seeks to bridge the technology innovation gap that currently exists between demonstration and full-scale operational carbon capture and storage plant.

3.25 Carbon capture and storage technologies have been demonstrated in isolation and on a small scale around the world. Full-scale demonstrators are expected to be built by 2013-2015, assuming appropriate financial support is available. Since new fossil-fuelled power stations have operational lives to well beyond 2030, it is necessary to impose guarantees that these power stations will be fitted with carbon capture technologies before 2030. The Scottish Government is currently considering which mechanisms might be put in place through its consenting powers to ensure that carbon capture and storage technology is installed at new and existing baseload stations as soon as possible.

3.26 Over the next two decades, decommissioning activities currently planned will remove the current large-scale nuclear power stations in Scotland. Some level of new thermal power is therefore necessary to complement the rising renewable capacity. Scotland has the local technical expertise and the physical geology to be a world leader in carbon capture and storage technologies. This will bring substantial economic opportunities and benefits. However, the economic and environmental benefits will only be realised if both pilot and full-scale technologies operate in Scotland. It is likely that both nuclear and carbon capture storage technologies will be required in the UK and elsewhere. Given the competition for scarce industry skills globally, it makes sense for Scotland to focus on its current industry strengths, and its geological assets, to develop carbon capture and storage technologies, and thereby support the ongoing use of fossil-fuelled power stations, rather than nuclear.

3.27 The First Minister outlined actions for developing carbon capture and storage technologies on 1 May 2009, including:

  • Proposals for UK and EU carbon capture and storage demonstration projects
  • Research funding
  • A Scottish consortium of Government, business and academics exploring the practicalities and costs of delivering carbon capture and storage in Scotland.

3.28 The Scottish Government will bring forward a carbon capture and storage route map later in 2009 which will set out the work necessary to ensure that all fossil-fuel generation operates with carbon capture and storage technology by 2030.

Barriers and risks

3.29 The need for additional intervention during the next two decades to de-carbonise the sector by 2030 carries two key risks:

  • The costs associated with bringing online additional renewables and delivering carbon capture and storage
  • The possibility of failure of one of the key technologies, such as carbon capture and storage, or the failure of more effective demand management from the use of smart meters.

3.30 The actions needed to minimise these risks will be covered in the renewable energy and energy efficiency action plans and the carbon capture and storage route map.

National Conversation

3.31 A key issue for the Scottish Government is the lack of legislative powers in Scotland with the main responsibilities for energy policy and regulation reserved to Westminster. Scotland is emerging as a key player in energy policy at both UK and EU levels and having greater regulatory powers would ensure that electricity policy and regulations would be better aligned to ensure delivery of our statutory climate change targets and maximising Scotland's economic potential in renewable energy and carbon capture and storage.

Table 3: : Delivery Plan for the Traded Sector and electricity demand and supply (for Aviation see Transport)

Measure

Required measures (34% Scottish target, 42% Scottish target or Transformational measure)

Action

Progress

What more do we need to do?

ELECTRICITY AND REFINERIES (21.2 MtCO 2e in 2006)

EU Emissions Trading Scheme

34% Scottish target

EUETS is main policy lever for delivering traded sector reductions.

Current cap will deliver around 5 MtCO 2 reduction in Scottish emissions between 2006 and 2020.

42% Scottish target

EUETS cap will decrease faster if EU commits to a 30% reduction in emissions by 2020

Depends on outcome of Copenhagen negotiations in December 2009 - EU will commit to 30% if a global deal on emissions is agreed.

Demand reduction and energy efficiency

T
2020

Behaviour change to reduce wasted electricity.

Energy Efficiency Action Plan being developed (end 2009 - see Energy Pledge 7).

"Smart" meters for all households by 2020.

May require further marketing to incentivise action.

T
2020

Increased energy efficiency of appliances.

Domestic efficiency measures funded by the UK-wide Carbon Emissions Reduction Target scheme. European appliance standards and labelling.

Renewable energy

T
2020

50% of gross Scottish electricity consumption to come from renewable sources by 2020

On pathway to meet target. Will be largely delivered through hydro and onshore wind.

Currently total capacity of renewables schemes either operating or with planning permission is 5.5 GW.

Around another 3 GW of installed renewables capacity needed.

Saltire Prize and establishment of Scottish European Green Energy Centre - see Energy Pledge 10.

Significant investment in infrastructure and grid connections for off-shore wind required - see Energy Pledge 6. Regular dialogue to put pressure on UK Government and regulators to look more strategically at improving the grid.

Ensure Green Energy Centre drives co-operative research and development into key green technologies across Europe and brings together the best of energy research institutes from across Scotland.

T
2030

Delivery of significant wave and tidal energy

Renewables Action Plan (autumn 2009 - see Energy Pledge 1) will identify actions and resources required to deliver.

Potential economic opportunity.

Substantial investment in marine and tidal energy and infrastructure - see Energy Pledge 6. FREDS Marine Energy Group has commissioned a study looking at the investment needed in infrastructure and supply chain for marine energy - findings will enable SG, SE, HIE and SDI to take strategic decisions on where investment should be focused.

Carbon Capture and Storage

T
2015
2020
2030

Working Scottish demonstration plant

Fully operational, commercial CCS plant

All remaining fossil fuel plants use CCS

See Energy Pledge 5 -

Three UK sites entered for UK and EU competition.

Thermal Guidance on carbon capture ready/ CCS in preparation.

Scottish report on CCS opportunities has been published. CCS route map forthcoming.

Ensure demonstration plant is delivered to "prove" CCS by working with the UK govt and other stakeholders to move into demonstration and then operational phases of CCS.

INDUSTRY (8.4 MtCO 2e in 2006)

Energy efficiency and Combined Heat and Power

34% Scottish target

Nearly all energy efficiency savings that have net costs less than £40/tCO 2 plus some CHP

Carbon Reduction Commitment

Work with UK Government to ensure that the CRC cap is sufficiently tight to deliver real emissions reductions. Make funds available to ensure that all public sector buildings are brought up to standards required, rather than pay "fines".


Contact

Email: Central Enquiries Unit ceu@gov.scot