The Environmental Authorisations (Scotland) Amendment Regulations 2025 Island Communities Impact Assessment (ICIA) Screening

The Environmental Authorisations (Scotland) Amendment Regulations 2025

Name of Policy, Strategy or Service:

The Environmental Authorisations (Scotland) Amendment Regulations 2025

Step One – Develop a clear understanding of your objectives

What are the objectives of the policy, strategy or service and what are the intended impacts/ outcomes and how do these potentially differ across the islands?

The Environmental Authorisations (Scotland) Amendment Regulations 2025 will amend the Environmental Authorisations (Scotland) Regulations 2018 (the "2018 Regulations") to bring waste, water, pollution prevention and control (PPC) and landfill authorisation regimes into an integrated authorisation framework (IAF). This will simplify and streamline how SEPA undertakes its regulatory functions regarding those activities for communities and operators on the islands and the mainland. The unique situation of the islands means that some elements of the proposed amendments need additional consideration for their suitability.

Step Two – Gather your data and identify your stakeholders

What data is available about the current situation in the islands?

Operators located on the Islands who currently hold authorisations, including permits, registrations, and licences issued by the Scottish Environment Protection Agency (SEPA), and information collected from consultations and public engagement (see step 3).

Who are your key Stakeholders?

Operators on islands who currently hold, or may hold, authorisations (including any exemptions) issued by the Scottish Environment Protection Agency (SEPA).

How does any existing data differ between islands?

Every island is unique in terms of its connection to the National grid and the way that on-island electricity back-up provision has been set up. Most islands however are similar in that electricity generation is concentrated at one or two individual sites to power the island's grid in the event of an unplanned mainland power outage.

Are there any existing design features or mitigations in place?

For existing authorisations, the application and authorisation process can be either by electronic or mail communications.

Step Three - Consultation

Is there information already gathered through previous engagements?

Stakeholder engagement has been sought via previous consultations:

• the high level SEPA Environmental Regulation consultation in 2010/11
• the joint Scottish Government – SEPA consultation on Proposals for an Integrated Framework of Environmental Regulation in 2012
• the Scottish Government consultation on proposals for an integrated authorisation framework in 2017

How will you carry out your consultation and in what timescales?

Public meetings/Local Authorities/key Stakeholders

A consultation was held alongside the SEPA consultation on the proposed changes to the authorised activities. The Scottish Government consultation ran from 15 December 2023 until 30 March 2024. The consultations targeted key stakeholders. Six stakeholder engagement events, four on-line and two in-person, were held between 20 February and 12 March 2024.

What questions will you ask when considering how to address island realities?

The questions sought stakeholder views on proposals to simplify and streamline how SEPA undertakes authorisations and its regulatory functions.

A new proposed regulated activity for small combustion generators aggregating to 1 MW thermal input or more at a single site was included in the recent consultation. This provision is required to ensure a consistent regulatory approach with that for larger generators, because environmental risks associated with a site are related to the overall capacity of that site and not the size of the individual generators. This activity may have an impact on Island communities given that many such communities are dependent on generators in the event of disruption to mainland power sources, therefore a consultation question was included to consider whether this should be a regulated activity under the 2018 Regulations.

Separate consultation events for Island communities/Local Authorities?

A mixture of in-person and online stakeholder consultation events were held. This included a specific online stakeholder event for those with generators aggregating to 1MW thermal input or more, publicity was through SEPA social media and via the Local Authorities with island communities.

Step Four - Assessment

Does your assessment identify any unique impacts on island communities? (Further detail in the Guidance) (Demographic, Economic, Gaelic, and Social):

A new activity of combustion plant aggregating to 1 MW thermal input or more at a single site is included in the consultation. This activity may have an impact with respect to Island communities (Economic and Social).

Does your assessment identify any potential barriers or wider impacts?

Combustion plant aggregating to 1 MW thermal input or more - The consultation asked for views on whether controls could be applied to any combustion plant that aggregate to 1 MW thermal input (MWth) or more on the same site which supplies energy, either to the grid or for independent production.

Are there mitigations already in place for these impacts raised?

Back-up generators are used mainly by island communities in Scotland in the event of national grid (e.g. subsea cable) faults or to provide additional peak lopping supply if required. Currently, a number of generator sites are essential for security of electricity supply on the islands. The removal of (unabated) diesel and heavy fuel oil fuelled generators from islands is understood to be an ambition of the supplier, and is supported by the independent energy regulator, Ofgem, where required to comply with Regulations or demonstrated to be economic and efficient. In time, it is hoped that these generators will be replaced either with additional connections to the mainland national grid (reducing their usage as emergency supply use will be more sporadic) or through renewable and storage technology (i.e. batteries combined with solar/wind; renewables generation already successfully covers peak lopping supply in many cases); although it is likely that at a small number of islands generators will still be needed for back-up power. To avoid disproportionate financial impact on island communities, such investments, where demonstrated to be economic and in the long term interests of consumers, may be socialised and funded by UK electricity bill payers through increased charges. Regulating these combustion plant under the 2018 Regulations is in line with our commitments to improve air quality and net zero and decarbonisation goals.

When regulated, diesel generators on a site where they aggregate to 1 MWth or more would need to meet Emission Limit Values set by the regulator to ensure air quality standards are met. It is anticipated that in some cases existing back-up generators that do not have abatement systems will not be able to comply with such limits. To allow back-up generators to continue to operate on islands in the event of unplanned national grid supply outage, the regulations include a time-limited derogation for this activity so that island communities are not adversely impacted by the regulations.

A similar, but shorter, derogation is included for planned national grid supply outage (for example during planned maintenance on subsea cables). This derogation is shorter as it is reasonable to expect distribution network operators to put in place alternatives to unabated generation in a reasonable timeframe.

In both cases, there is a commitment for Scottish Ministers to review the derogations before they expire to understand whether there is a continued need for them, or, in the case of the derogation for planned maintenance, whether there is a case for extending it beyond its current expiry date.

These derogations recognise Strategic Objective 9 of The National Plan for Scotland's Islands, which has identified and actioned three relevant mitigations reducing the requirement to have combustion plant aggregating on 1 MWth or more.

• Deliver existing proposals for electricity transmission links to mainland Scotland;
• Encourage energy providers to focus on the resilience of islands' energy supply networks; and

Continue working to unleash the potential of renewable energy.

Are there mitigations in place for the impacts identified and noted above from stakeholders and community consultations?

Strategic Objective 9 of The National Plan for Scotland's Islands has identified and actioned three relevant mitigations (noted above) reducing the requirement to have combustion plant aggregating on 1 MWth or more. These are planned to be operational over the next decade. However, this will not remove completely the need for back-up generators. The derogations in the regulations, noted above, are designed to prevent economic and safety impacts on island communities in terms of security of supply.

Does the evidence show different circumstances or different expectations or needs, or different experiences or outcomes (such as levels of satisfaction, or different rates of participation)?

Back-up generators are used mainly by island communities in Scotland in the event of subsea cable faults or to provide additional peak lopping supply if required. Currently, a number of generator sites are essential for security of electricity supply on the islands.

Are these different effects likely?

Subsea cables have been known to fail, due to accidental slicing or through use beyond designed life span. A subsea cable failure would be an unplanned event, however, the result would be (potentially long term) use of back-up generators until the subsea cable has been re-instated.

Are these effects significantly different?

These generators are likely to be used for longer durations during a subsea cable failure, than for short duration lopping, and this situation is unique for island communities.

Could the effect amount to a disadvantage for an island community compared to the mainland or between island groups? If your answer is 'no' to the above questions, please complete the box below. If the answer is 'yes', an ICIA must be prepared and you should proceed to Step 5

The island communities are reliant on the provision of small back-up generators for security of electricity supply.

The use of small back-up generators must be allowed to continue until alternatives are in place. Many such generators are old and do not have abatement systems fitted to meet modern air quality targets. The abatement systems required to meet the air emission values are frequently either expensive or extremely difficult to install due to limited space at a site. The costs of installation of retrofit abatement systems or replacement generators could be passed on to customers, potentially the residents of the island communities. This would be unaffordable, and out of step with UK and Scottish Government's commitments to net zero and a just transition. This is why derogations in the regulations means that island distribution network operators will be able to continue using back-up generators in the event of unplanned supply outage until the end of 2039, and until end of 2033 in respect of planned interruptions, but this will not impact longer term plans to decarbonise contingency supply.

Step Five - Recommendation

A full Islands Community Impact Assessment is NOT required

In preparing the ICIA, I have formed an opinion that our policy, strategy or service is NOTlikely to have an effect on an island community which is significantly different from its effect on other communities (including other island communities). The reason for this is detailed below.

A potential impact for island communities from the regulation was identified. Back-up electricity generation on the islands would be brought into the scope of the regulations, which would mean, in the event of an unplanned and planned intermissions to mainland electricity supply, existing generator stock would need to be run and in many cases not meet the Emission Limit Values likely to be set by the regulator through its authorisation scheme.

Through Distribution Network operators' longer term funding proposals and Strategic Objective 9 of The National Plan for Scotland's Islands there is a plan to upgrade, replace or use other means for back-up where possible, but this will not address the issue on all islands and situation on the islands in the short term.

For this reason, two time-limited derogations have been included in the regulations for island-based generators and their use for back-up power, for unplanned and for planned intermissions to mainland power supply. Scottish Ministers have a duty to review the derogations before they expire, to check whether they are still required and, in the case of planned back up power supply, whether there is a case for extending the expiry date. At this stage we expect operators to have in place alternative or abated generation for planned intermissions, where these are needed, before the expiry of the derogation for planned use.

The derogations mean that the islands will not be adversely affected by these regulations, and so it is not necessary to carry out a full impact assessment.

Sign Off

Screening ICIA completed by:

Name: Phil Leeks

Position: Senior Policy Manager - Chemicals

Signature and date: P. Leeks 02/10/2024

ICIA authorised by:

Name: Anne Aitken

Position: Deputy Director, Environmental Quality & Resilience Division

Signature and date: Anne Aitken 02/10/2024