When we published our draft Offshore Wind Policy Statement in late 2019, I highlighted Scotland's global leadership in the face of a climate emergency. I also talked about our commitment to achieve the most ambitious, statutory climate targets anywhere in the World – which we set out in our landmark Climate Change (Emissions Reduction Targets) (Scotland) Act, passed in September 2019.
That Act commits us to reach net zero emissions of all greenhouse gases by 2045, ahead of the UK target of 2050. It includes bold interim targets to reduce emissions by 75% by 2030, against a 1990 baseline, and to reduce emissions by 90% by 2040. These targets are in line with what is required to meet Scotland's commitments under the 2015 Paris Agreement, to limit global average temperature increases to 1.5 degrees Celsius or less.
The targets represent a huge shift away from established norms, and the way in which we live and work. The Scottish Government's focus on ensuring a Just Transition – considering and involving the people of Scotland in discussions and decisions about these changes to our homes, communities and lives – is a major component of our net zero efforts.
Meeting our hugely challenging climate change targets will require developing as much of Scotland's renewable energy potential as possible, so that we can meet the anticipated growth in demand for low carbon electricity necessary to decarbonise Scotland's wider energy system. This will require progress in areas such as the energy needed for domestic and industrial heat supplies and our transport systems, as discussed in Scotland's Energy Strategy in 2017. Early next year we will publish a refresh of Scotland's Energy Strategy – informed by our engagement with key stakeholders and recent work in areas such as hydrogen we will set out our short-term priorities along with a roadmap towards our target of a 75% reduction in emissions by 2030.
I have said many times that Scottish offshore wind generation will play a vital part in helping us meet this challenge, effectively and affordably, while taking into account wider environmental factors and the interests of other users of the sea. Offshore wind is one of the lowest cost forms of electricity generation at scale, offering cheap, green electricity for consumers, with latest projects capable of generating power at below wholesale electricity prices.
Our consultation underlined Scotland's huge potential resource, the work that we have been doing to develop a robust Plan, and our collaboration with the sector and stakeholders to tackle barriers, support innovation and maximise economic benefits for Scotland. The consultation also brought into sharp focus the potential for offshore wind to connect with green hydrogen production at scale adding another potential layer to Scotland's rich energy portfolio.
All of this remains true. However, as we all know, since I wrote those words last year, the World has changed in ways we couldn't have begun to imagine. We are in the midst of a global pandemic, which continues to threaten lives, and which has also caused significant damage to our economy and those of our trading partners.
While the Scottish Government works tirelessly to protect lives and livelihoods amid the global health and economic crisis, the threat posed by climate change has not gone away, and we remain committed to tackling it and decarbonising our energy system and demand. Our starting point may have been affected by Coronavirus but our ambitions have not and we are determined to drive a green economic recovery in which the potential of offshore wind is crystal clear.
Our latest Programme for Government recognises and responds to the huge economic challenges that the pandemic has created, and sets out in detail how Scottish Government's unwavering commitment and focus on green jobs. I believe firmly that our offshore wind sector will play a crucial part in this process.
That is why I want to be even more ambitious than before. The magnitude of change required to meet our targets is unlike anything we have seen before. We must aim high, while ensuring a just transition and being sensitive to the impacts on people and businesses that these changes may bring.
That is why we're moving ahead with a new leasing round, through our agency Crown Estate Scotland, and through Marine Scotland finalising a Sectoral Marine Plan (SMP) for offshore wind, which ensures that we are managing the delicate balance between delivering our net zero commitment and protecting Scotland's diverse marine environment and other marine users.
That is why we're calling for UK Government to get it's Contacts for Difference (CfD) auction and other interventions right and ensure that allocations of contracts are not done purely on price. UK Government must also consider value added to the economy and the need to respond to the climate emergency. Although our offshore wind sector has benefited hugely from the CfD mechanism in terms of cost reduction; significant investment in infrastructure will be necessary to deliver the technology at scale and boost the domestic supply chain. There must be an avoidance of any arbitrary capacity caps that do not take heed of the urgency of the climate emergency.
That is why the required electricity connections and networks must be structured and regulated in a way that will enable, rather than hinder, these developments. We will continue to make the case to the UK Government and the regulator for necessary changes to be made. We will work constructively with all parties to make sure that future changes can be delivered in a considered and effective manner.
That is why we will continue to prioritise and maximise benefits for Scotland's supply chain and economy from offshore wind – we'll be demanding this of developers in Scottish waters. The need to maximise Scotland's economic gain from the transition to net zero has become increasingly vital in the context of a green recovery where quality, green jobs are central. I am determined to ensure that the sector plays a key role in driving this recovery, such is the scale of our offshore wind opportunity.
I am grateful to all who have taken part in the process which has led to this Policy Statement's publication. This is only the beginning of Scotland's offshore wind journey. In front of us stands the opportunity of a lifetime to create a prosperous green future for generations to come.
I hope we can continue working collaboratively to turn this aspiration into a reality in the years ahead.
Paul Wheelhouse MSP
Minister for Energy, Connectivity and the Islands.