Scottish Energy Advisory Board minutes: September 2024

Attendees and apologies

Co-Chairs

• Rt. Hon. John Swinney MSP, First Minister (co-chair)

• Prof. Sir Jim McDonald, Principal Professor and Vice Chancellor, University of Strathclyde (co-chair)

Members in attendance

• Melfort Campbell, CEO, IMES Group

• Lewis Shand-Smith, Chair, Energy Consumers Commission

• Keith Anderson, CEO, Scottish Power

• Rozanne Foyer, General Secretary, STUC

• Adrian Gillespie, CEO, Scottish Enterprise

• Jim McColl, CEO, Clyde Blowers

• Damien Yeates, CEO, Skills Development Scotland (attending in place of Frank Mitchell)

• Sam Ghibaldan, CEO, Consumer Scotland

• Paul Wheelhouse, Head of Energy Transition, South of Scotland Enterprise (attending in place of Jane Morrison-Ross)

• Claire Mack, Chief Executive, Scottish Renewables

• Alistair Phillips-Davies, Chief Executive, Scottish and Southern Energy

• Mark Wilson, HSE & Operations Director, Offshore Energies UK

• Dr Stephen Wyatt, Director, ORE Catapult (attending in place of Andrew Walls)

• Matt Vickers, Director of Engineering and Customer Solutions, National Grid ESO (attending in place of Fintan Slye)       

• Philippa Parmiter, CEO, NECCUS

• Myrtle Dawes, CEO, Net Zero Technology Centre

• Willie Watt, Chair, Scottish National Investment Bank

Scottish Government attendees

• Michelle Quinn, Interim Director General for Net Zero

• Kersti Berge, Director for Energy and Climate Change

• Annabel Turpie, Director for Offshore Wind

• Christopher Mackie, Deputy Director for Onshore Electricity & Energy Consents

• Head of Energy Strategy and Markets Unit

• Colin McAllister, Special Adviser to the First Minister

• David Hutchison, Special Adviser to the First Minister

• SEAB Secretariat

UK Government attendees

• Chris Stark, Head of Clean Power 2030 Unit

• Juergen Maier, Chair of Great British Energy

• Fiona Mettam, Director of Energy Development and Resilience

• Private Secretary to the Chair of GB Energy

Apologies

• Fintan Slye, Director, National Grid ESO

• Mark Wild, CEO, Scottish Gas Networks

• Andrew Walls, Interim CEO, ORE Catapult

• David Whitehouse, Offshore Energy UK

• Keith MacLean, Director, Providence Policy

• Keith Bell, UK Climate Change Committee

• Jane Morrison-Ross, Chief Executive, South of Scotland Enterprise

• Stuart Black, Chief Executive, Highlands and Islands Enterprise

• Ian Marchant, CEO, Dunelm Energy

• Frank Mitchell, Chair, Skills Development Scotland

• David Pearson, Group Sustainable Development Director, Star Refrigeration

• Brian McFarlane, Chair/Head of Projects, SOWEC / SSE

• Simon Kilonback, Chief Financial Officer, SGN

Items and actions

Welcome and introductions

Sir Jim welcomed members and introduced the agenda.

The First Minister welcomed the commitment of Members and SEAB’s crucial role in achieving the Scottish Government’s energy and green economy ambitions. He described his priority of providing policy certainty in support of achieving Scotland’s potential for renewable, carbon capture, utilisation and storage (CCUS), and hydrogen growth. He noted that alignment across the Scottish and UK governments is essential for this and that the Scottish Government will collaborate with the UK Government to realise these ambitions. He closed by reflecting on the Tummel Power Station project as an example of bold ambition driving progress in the energy transition.

Updates on previous meeting

Sir Jim McDonald welcomed the First Minister’s remarks and the clear sense of focus behind the Board as an important forum for delivery. He welcomed Willie Watt, Chair of the Scottish National Investment Bank (SNIB), to SEAB for the first time, and noted that SNIB will now be a formal part of the membership to help ensure that vital ‘Team Scotland’ approach. He noted the ongoing action from the previous meeting for SG officials to meet with Rozanne Foyer of the STUC, and that items on SEAB’s structure and terms of reference will be discussed at the next meeting. Sir Jim then introduced Juergen Meier from Great British Energy (GBE).

Update on Great British Energy (Juergen Maier)

Juergen Maier described GBE’s focus on policy stability, policy alignment, and bold vision, to boost investor confidence. He set out four key areas for GBE’s work:

• investment – GBE’s £8.3 billion capitalisation will be used to co-invest and crowd-in private investment, such as for newer technologies like floating offshore wind
• accelerating development – GBE will work with partners across the public sector and industry on port infrastructure, planning legislation, and grid connections
• community energy – GBE will look to standardise community benefit through its co-investments, potentially supported by changes being explored in policy or legislation
• supply chain – GBE will focus on bolstering the supply chain to help the whole system of energy investment work well

Juergen Maier closed by reflecting that the exciting opportunities of the energy transition can be achieved through partnership.

Q and A discussion – Great British Energy

Sir Jim McDonald welcomed GBE’s whole system approach and its alignment with the Royal Academy of Engineering’s recent report on achieving clean power.

Rozanne Foyer said that Trade Unions are happy to see the collaborative approach of the UK and Scottish Governments to realising the energy pipeline, and the opportunity for the industry and supply chain in Scotland, but that the timing of the transition is critical given that skilled Oil and Gas jobs are already under threat in the shorter term, whilst some of the future renewables jobs might be 10 years away.

Juergen Maier acknowledged the need for government to be open and clear in communications about the energy transition to enable workforce preparation and planning, whilst also being bold about driving growth in renewable alternatives, so that well paid jobs in Oil and Gas are replaced with equivalent roles in clean energy.

Melfort Campbell said that he is concerned about an underrepresentation of enterprise in discussions on the energy transition, given the need for new industrial capability in the supply chain whereby more of the value from renewables developments remains in the UK economy. He also noted that learning lessons from other countries will be helpful for achieving this.

Juergen Maier responded that the UK missed out on supply chain opportunities during the first wave of offshore wind, but noted that there is now a similar opportunity for enterprise and innovation in less mature technologies, such as floating offshore wind, CCUS, and hydrogen.

Lewis Shand-Smith reflected on the pace of development, noting that the recently completed Shetland interconnector project was first talked about in the late 1990s. He also said that community acceptance is vital to the progress of renewable energy developments, which has been relevant in Shetland recently in the construction of the Viking wind farm. He asked how GBE will accelerate development in this context.

Juergen Maier noted opportunities to learn from the examples of other countries on community engagement and benefits.

Claire Mack said that prioritisation, rather than trying to do everything, is key to driving progress on energy opportunities, and noted the importance of Rozanne Foyer’s point about the timing of the transition.

Adrian Gillespie stated that whilst there is a strong pipeline of energy developments, businesses are concerned about grid connections and maximising supply chain investment, such as the route to a purchase order being made.

Keith Anderson said that the gap in information about GBE has not been helpful for investors, and that public clarity on its priorities is needed. He also noted that there is an important role for CCUS and hydrogen in the energy system.

Myrtles Dawes said that the Net Zero Technology Centre can help address the points raised about the validation needed to encourage investment in technologies.

Juergen Maier stated that he has been engaging with the Department for Science, Innovation and Technology, and the Department for Business and Trade, to align the work of GBE with the innovation and business landscape. He noted that assets such as the National Manufacturing Institute Scotland will help with GBE’s work in this. He also welcomed the feedback on GBE’s communications and awareness in industry.

Willie Watt referred to the Scottish National Investment Bank’s work to drive investment in the transition. He welcomed the potential for GBE and SNIB to work together accelerate and target the deployment of capital in Scotland.

Paul Wheelhouse said that all the opportunities discussed in the meeting are dependent on the grid, and asked how GBE can accelerate grid connections.

Sam Ghibaldan welcomed the focus of GBE on communities benefitting from developments, and said this is particularly important for disadvantaged areas.

Juergen Maier responded that whilst the GBE Bill still needs to go through Parliament, a partnership approach is vital to address the points raised by SEAB Members. He said that GBE will engage with SNIB on aligning investment.

The First Minister welcomed that GBE’s focus is complementary to that of the Scottish Government, and emphasised the need for ongoing collaboration for it to achieve these shared aims. He raised the issue of lack of clarity from the previous UK Government on the Acorn project, and noted that the project is well advanced and can help with the just transition of sites such as Grangemouth.

Update on Clean Power 2030

Chris Stark described the background to the Clean Power 2030 mission, noting that bringing forward the ambition for decarbonised electricity supply from 2035 to 2030 sets a challenging target that the UK Government is absolutely committed to.

He said that the UK Government will work closely with the Scottish Government, which has the consenting and planning powers to help achieve the mission.

He noted that one advantage of the earlier date of 2030 is that it precedes most of the anticipated growth in electricity demand, and that there is now enough in the projects pipeline to achieve the mission, but that work is needed to realise this.

Chris Stark also described the various aspects of achieving the mission, including that: Contracts for Difference will continue to be important in boosting investor confidence; the UK needs to build around six times more grid infrastructure in the next six years that it has in the last 30; decisions will be needed to curate the queue of energy generation projects to focus on the optimal system; and there is a need to address the issue of gas still setting the price of electricity, alongside flexibility services and infrastructure to complement the renewables-based system.

He stated that the UK Government’s plan for achieving the clean power mission will draw on published advise from the National Energy System Operator. He said that to drive progress, Mission Control will collect project-level information and specifically follow up on these to remove barriers, engaging with the Scottish Government.

Q and A discussion – Clean Power 2030

Alistair Phillips-Davies noted the challenge of achieving clean power to this ambitious timescale, but that SSE are keen to hear more detail on the plan so that they can play their part well in delivering it.

Keith Anderson emphasised the need for government to engage with industry, and said that an interventionist approach will be needed to deliver the mission. He called for certainty for industry on the Review of Electricity Markets Arrangements.

Chris Stark acknowledged that spending too long consulting and not deciding has slowed progress, and that clear direction is needed on things like workforce planning and skills provision on a location basis. He said that the Clean Power 2030 Unit will be working closely with industry on delivery.

Philippa Parmiter said that policy certainty is key for CCUS, and asked whether the plan will differentiate between CCUS for power and CCUS for industrial processes.

Chris Stark responded that only some of the anticipated power CCUS is likely to be active pre-2030, and so the mission also has to prioritise dispatchable clean power. He also noted that ‘clean power’ does not mean no gas power generation, but rather that any unabated gas power generation only has a role as a strategic reserve.

Claire Mack said that there is a need for a match between legislation and policy ambitions so that these do not conflict – such as the proposed changes to planning legislation alongside the Crown Estate Bill.

Chris Stark stated that clean power is modelled on the vaccine taskforce in bringing together different parties across government and industry around a clear goal.

Jim McColl said that companies need investment banks to provide guarantees, and referred to the example of Germany issuing bonds that were not counted as national debt. Willie Watt said that the UKIB offering this would require Treasury approval.

Chris Stark said that to achieve the mission, the pre-2030 projects pipeline of offshore wind projects is crucial, and that throughout the transition, the pace, industry benefit, and consumer cost need to all be considered together.

Sam Ghibaldan referred to research showing that people are unclear about the behaviour change needed as part of achieving net zero, and that cost and convenience remain the most important driving factors in this.

Rozanne Foyer said that she is pleased to hear that workforce planning is being considered and that the Scottish and UK governments are aligned on the clean power mission, given the skills shortage and the need to focus both on young workers and clarity for the existing workforce.

Lewis Shand-Smith highlighted the need to consider the importance of the regulator (Ofgem) in achieving these ambitions by removing obstacles. Chris Stark responded that Ofgem are fully engaged and on board with the work of the Clean Power Unit.

Paul Wheelhouse said that there is potential for flexibility pilot schemes in regions with more renewables such as the south of Scotland. Chris Stark noted this opportunity as well as the market challenges in establishing such a scheme.

Any other business and close

The First Minister thanked attendees, and said that he is heartened by the clear and coherent focus in the GBE and Clean Power work described. He welcomed that the agenda behind these is aligned with that of the Scottish Government, and the opportunities for collaboration. He called for clear legislation to provide certainty in the transition, and for work to ensure consumers benefit from these opportunities in terms of energy costs. He concluded by welcoming the vital role of SEAB’s expertise in driving progress on Scotland’s energy opportunities.

Sir Jim McDonald closed the meeting by welcoming the focus on delivery at SEAB, as well as the opportunities for alignment and collaboration identified at this meeting.

Summary of actions

GBE and SNIB to liaise on investment plans and alignment.

SEAB terms of reference and strategic leadership group structure to be discussed at the next meeting.

Scottish Government officials to consider the opportunity for further GBE and Clean Power updates at future SEAB meetings.