Information

Scotland's energy sector - unlocking investment: joint business plan

Focusses on the actions a number of stakeholders need to take in order to unlock investment in projects that support net zero, and will generate economic benefit across Scotland and the wider UK over the next few years.


Annex: Industrial and Negative Emissions Technologies

Barriers and actions

Barrier #1: Need for CO2 Transport & Storage Infrastructure

Stakeholders: UK Government;

  • Direct government support for offshore Transportation & Storage (T&S) infrastructure for initial investment.
  • New economic regulation framework of T&S infrastructure with appropriate risk/return balance.
  • Framework for transfer and re-use of assets between current offshore operators and future T&S businesses.

Barrier #2: Need for Incentivisation for Industrial Capture and Fuel Switching

Stakeholders: UK Government;

  • Use of auction revenues from certificates to promote deep decarbonisation efforts: fuel switching electricity, hydrogen and CCS.
  • Industrial Capture Contracts based on CfD type model.

Barrier #3: Need for Localised Initiatives Related to Blue Hydrogen

Stakeholders: Scottish Government; UK Government; Ofgem;

  • Gas transportation rules to allow for localised hydrogen blending.
  • Consideration of 100% blue hydrogen heating in areas in proximity to industrial locations.

Barrier #4: Need for Power Generation with Carbon Capture

Stakeholders: UK Government;

  • Extend CfD model to power generation with CCS.

Barrier #5: Need for Support for Supply Chain to Develop Solutions

Stakeholders: Scottish Government;

  • Clarify supply chain CCS and hydrogen capabilities through joint mapping project.
  • Develop consortia to bid for emerging opportunities in/around North Sea.

Barrier #6: Need for Infrastructure to Support Operations

Stakeholders: Scottish Government;

  • Review local infrastructure (e.g. rail and harbours) to ensure that it provides adequate access to fabrication sites (e.g. for imported carbon storage.

Barrier #7: Need to develop business models which will encourage negative emission technologies

Stakeholders: Scottish Government; UK Government;

  • UKG and SG to consider procuring negative emissions removal units from a portfolio of NET plants to offset part [25-50%] of the public sector emissions inventory.

Results

  • Maintaining existing industrial activity in Scotland and providing scope for new types
  • Scotland as a leading destination for management of national, UK and global CO2 via disposal and storage through Acorn project and extensions of that.
  • Supply chain benefits from transition of oil and gas expertise
  • Transfer of jobs and skills from oil and gas sector
  • Incentivise technology deployment and drive down costs

Example projects

  • Acorn CO2 T&S and carbon capture plant (Pale Blue Dot) - Enabler for CCS at scale in Scotland. Anticipated it will deliver 340,000T/year of CO2 reductions, and provide infrastructure to deliver 20MT/year of emissions reduction for Scotland / the UK
  • ONE Supply Chain Transformation - Delivery of market opportunities to the Scottish supply chain, diversification workshops, and launch of industry challenges in collaboration.
  • ONE Energy Transition Zone - Integrated economic development project with focus on land assembly and infrastructure to attract high-value manufacturing for offshore wind and hydrogen. It will support supply chain transformation, test facilities and new skills.
  • ONE Hydrogen Aberdeen Vision - A dedicated pipeline from St Fergus to Aberdeen to allow the city to become one of the first UK towns to be heated by hydrogen
  • Dreamcatcher Direct Air Capture project (Pale Blue Dot and Carbon Engineering) in North East Scotland

Contact

Email: anthony.kinsella@gov.scot

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