Onshore wind: policy statement 2022
Sets out our ambition to deploy 20GW of onshore wind by 2030, as well as details on the formation of an onshore wind strategic leadership group, who will develop an onshore wind sector deal.
Chapter 8: Onshore Wind, Energy Systems and Regulation
8.1.1. Electricity policy and regulation are reserved issues, and the responsibility of the UK Government and the independent energy regulator, Ofgem – with whom the Scottish Government will continue to engage closely across several key areas.
8.2. Network Planning/Delivery
8.2.1. Delivering our ambition of 20 GW of onshore wind by 2030 will create demands on our electricity infrastructure. New developments will need to connect quickly to Scotland's distribution and transmission networks. Networks must be able to invest quickly and ahead of need in order to ensure swift and efficient connections for onshore wind developments.
8.2.2. The 'connect and manage' system has supported significant growth in clean, low-cost renewable capacity. However, the misalignment between rapidly increasing constraint costs and the long lead time for transmission investment is placing increased risk on consumers in an already challenging landscape.
8.2.3. National Grid Electricity System Operator, the GB Electricity System Operator, has identified the need for over £21bn of investment in GB transmission infrastructure to meet 2030 targets. Over half of this investment will involve Scottish Transmission Owners SSEN and SPEN.
8.2.4. Delivering network infrastructure at the pace required, will require agile regulation working in coordination with well evidenced policy drivers and efficient consenting and planning processes. The Scottish Government is working closely with Scottish Transmission Owners and National Grid ESO through our Major Electricity Projects Group (MEPG) to identify and address barriers to delivery of the transmission infrastructure required to support our transition to net-zero.
8.3. Network Charging
8.3.1. We know that transmission charging remains a barrier, and a particular disadvantage, for onshore wind projects located in Scotland. These charges and this system reflect an approach whose logic and design has been overtaken in large part by the global climate emergency, and the essential role of onshore wind and other forms of renewable electricity in decarbonising energy demand across our society and economy.
8.3.2. Ofgem's minded-to position following its recent review of access and forward-looking charges has signalled that it still intends to apply Transmission Network Use of System (TNUoS) to small (less than 100MW) distribution-connected generation, which could be particularly detrimental to Scottish renewable developments and to investment in new onshore wind capacity.
8.3.3. In a net zero world, it is counterproductive in the extreme to care more about where generation is situated than what type of generation it is. A new approach is needed here, rather than small modifications to methodologies. We will continue to raise this with Ofgem and the UK Government and push for a fairer solution that recognises the renewable capability of Scotland.
8.3.4. We are therefore deeply concerned by some stakeholder proposals to introduce Locational Marginal Pricing in the GB wholesale electricity market. The UK Government's Review of Electricity Market Arrangements presents an opportunity to reflect on the structure of the market and consider what we can do to ensure it serves the best interests of consumers and delivery of net zero.
8.4. Security of Supply & Storage Potential
8.4.1. We believe that onshore wind can play a greater part in helping to address the substantial challenges of maintaining security of supply and network resilience in a decarbonised electricity system. This will mean an increasing ability to provide some of the services and responses that are currently provided by thermal generation, and market / regulatory arrangements which can incentivise and support such outcomes.
8.4.2. The Scottish Government has helped enable a project which underlined some of the potential here. We provided £550,000 to support a demonstration project delivered by ScottishPower Renewables at its Dersalloch Wind Farm, looking at the potential for delivering Black Start (the ability to re-energise the GB electricity system after a total blackout) from wind. The project delivered a global first during a test in October 2020 by delivering black start capability from wind power to re-start part of the electricity system.
8.4.3. More innovation of this kind can help onshore wind to play as full a part as possible within a net zero electricity network. However, there are other means by which onshore wind output can be managed and help assist the operation of the system.
8.4.4. These include the potential of co-location with hydrogen electrolysers. The renewable hydrogen produced from such processes can serve a number of highly valuable purposes; in addition to greatly reducing network constraint payments and costs, the renewable hydrogen produced could help meet demand for zero carbon heat and transport as well as being used to generate electricity and provide vital flexibility at key strategic locations on the network.
8.4.5. We have already seen an increase in onshore wind developments co-located with battery storage facilities and, as we continue to progress towards the decarbonisation of our energy system, battery storage will be more and more prevalent. On-site battery storage not only reduces pressures from the grid, but enables more locally focussed energy provision, and reduces costs to consumers.
8.4.6. The Scottish Government will continue to support the co-location of both battery storage and hydrogen production facilities with onshore wind developments to help balance electricity demand and supply, add resilience to the energy system and support the production of renewable hydrogen to meet our future demands.
8.5.1. Our Hydrogen Action Plan (published on 14 December 2022) sets out the actions necessary to implement the ambitions in our Hydrogen Policy Statement. These actions will help put us on the pathway to becoming a leading hydrogen nation by 2045 in the production of reliable, competitive, sustainable hydrogen. The Action Plan is supported by a £100m capital funding programme, designed to accelerate and maximise the production of renewable hydrogen in Scotland to meet our target of 5 GW of renewable and low carbon hydrogen production by 2030 and 25 GW by 2045.
8.5.2. We will continue to work with key stakeholders to evaluate the most advantageous locations for hydrogen electrolysis to reduce electricity constraints and deliver maximum value. A report on the assessment of electrolysers was published in October 2022.
8.5.3. We see the growth of renewables and a hydrogen economy as complementary; we need a strong renewables sector to support the development of a range of small and large scale renewable hydrogen projects. Scotland's huge potential for renewable energy generation complements our ambitions to produce industrial scale quantities of renewable hydrogen for domestic use and export. Scaling up renewables and hydrogen production will be key to unlocking Scotland's potential to be a leading exporter of hydrogen to the rest of the UK and Europe.
8.5.4. A strong onshore wind sector will support the development of a range of small and large-scale renewable hydrogen projects. As these hydrogen production projects come online they will assist the efficiency of the energy system by addressing renewable intermittency with production by electrolysis at times of excess electricity supply.
8.5.5. Hydrogen is set to play a significant part in the decarbonisation of our global energy system. A combination of increased renewable electricity, energy efficiency and hydrogen will be required to decarbonise the most difficult parts of our economy including industry, transport and power. We will seek to build on our evidence base to support the steady growth of renewable hydrogen production from onshore renewables.
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