Chapter 5. Scotland's Natural Resources, Infrastructure and Place
Policy Priorities:Scotland's Natural Resources, Infrastructure and Place
Scotland's natural resources, strengths and existing infrastructure provide the perfect combination of factors for large scale clean hydrogen production and we will promote these unique selling points to support the growth of a hydrogen economy in Scotland.
We support the establishment of regional clusters of hydrogen activity.
We support the aspirations of our islands communities to become hubs of energy innovation and climate change leaders, with an emphasis on energy transition, renewable energy and hydrogen production.
The key ingredients in green hydrogen production are renewable energy and water. Scotland has an abundance of wind, both on and offshore, tides, and reliable water resources within public control with which to support electrolysis. Scotland's water services are provided by Scottish Water, a publicly-owned company answerable to Scottish Ministers.
To-date, Scotland has seen a significant amount of offshore wind energy activity, with 15 offshore wind farms (including three floating wind farms) having received consent, five of which are currently operational. This equates to a total generating capacity of just over 5GW and our aim is this will rise to 11GW by 2030.
Scotland is in the process of running a further leasing round for commercial scale offshore wind energy projects in Scottish waters, the Crown Estate Scotland Scotwind leasing round. The development of deep water wind technology also provides an opportunity to further develop offshore wind supply chains and to lever existing infrastructure and supply chain capabilities from the offshore oil and gas industry and help create the requisite conditions to position Scotland as a world leader in deep water wind technologies.
Due to its extensive coastline, Scotland has an estimated one third of the UK's tidal stream resources and two thirds of the UK's wave resources. The UK as a whole is estimated to have around 50% of Europe's tidal energy and 35% of its wave energy potential. Scotland is a world leader in wave and tidal energy as a result of consistent and committed support from the Scottish Government together with the expertise, investment and innovation of the industry itself. Although wave and tidal technologies are at an early stage of commercial development, the scale of Scotland's natural resource offers significant opportunity for renewable energy generation in the future.
Scotland also has plentiful wave and tidal energy renewable resource at sites off our shores which are producing renewable energy for use in electrolysis.
While bulk green hydrogen from renewable electricity appears an attractive opportunity for medium to longer-term, in the near to medium-term, low-carbon hydrogen demand and infrastructure could be developed in Scotland by aligning hydrogen production from fossil fuels with carbon capture and storage (CCS).
Scotland's key CCS resource is our vast potential for CO2 storage in the North Sea, estimated at 46Gt of CO2 storage in Scottish waters. Legacy oil and gas infrastructure offers us rare access to these storage sites.
Hydrogen production via methane reformation aligned with CCS will require locations near to sources of natural gas. Approximately 35% of the UK's natural gas comes ashore from the North Sea at the St Fergus Gas Terminal in the North East of Scotland. This is where the proposed Acorn CCS and Acorn Hydrogen projects are located.
Infrastructure and Planning
Significant investment in infrastructure will be needed to support new emission reduction technologies such as CCS and hydrogen.
This is recognised in our draft Infrastructure Investment Plan (IIP) which was published on 24 September. The IIP delivers the National Infrastructure Mission – and sets a long term vision of infrastructure supporting an inclusive, net zero carbon economy in Scotland.
The Plan includes details of around £24 billion of major projects and national programmes – with more to be confirmed in future years, including: more than £8 billion for environmental sustainability and the transition to net zero emissions, including £250 million to support 18,000 hectares of forestry and restoring peatlands.
We expect that our draft National Planning Framework (NPF4) will confirm that climate change will be the overarching priority for our spatial strategy and planning policy and will confirm our view that the Global Climate Emergency should be a material consideration in considering applications for appropriately located renewable energy developments.
CCS infrastructure; on and offshore renewable energy generation and networks; and clean hydrogen production and distribution have been identified as strategically important development opportunities in Scotland that should be reflected in NPF4. Our analysis of candidate projects for national development status is ongoing. The draft NPF4 will be subject to Parliamentary scrutiny and public consultation from autumn 2021, and we expect to adopt it by summer 2022.
We already possess key infrastructure assets that can assist in the transition to a hydrogen economy. We have a wealth of oil and gas infrastructure (pipelines and offshore platforms) that could be repurposed for hydrogen transportation and storage. We also have a large number of deep water ports and harbours across Scotland that could act as transportation and storage hubs for a future hydrogen industry.
The importance of location in the development of a hydrogen economy in Scotland cannot be understated. Co-location of renewable energy generation, transport infrastructure, legacy oil and gas sector assets (including CCS infrastructure) and links to export markets, all contribute to lower production costs and growth in local use and export opportunities.
The deployment of hydrogen in Scotland is likely to be region and geography specific, reflecting the location of production resources, existing infrastructure and demand patterns.
This is a key goal of the Grangemouth Future Industry Board (GFIB), announced in the 2020 Programme for Government. The Grangemouth cluster is responsible for approximately 30% of Scottish industrial emissions and comprises a range of businesses with significant expertise in oil refining, petrochemicals, engineering, ports/harbours and multi-model transport (road, sea and rail).
The cluster already produces and consumes large quantities of hydrogen, positioning the region as a potential future hub of low carbon hydrogen supply and demand. There is substantial capacity for the industries in this area to capitalise on their location, skills and expertise, pooling their collective demand for low-carbon energy or working together to advance the early development of low-carbon infrastructure at scale. Grangemouth's advantages for CCUS linking and the capture of industrial emissions make for what could be a key asset in Scotland's transition to a net zero emissions economy by 2045.
GFIB will seek to enhanced public sector coordination around Grangemouth, leveraging this opportunity to help identify and progress growth/investment opportunities; streamline effort; identify barriers to economic development or decarbonisation and improve the collective public sector input to decisions affecting the cluster to drive a just transition to net zero.
Hydrogen also offers an opportunity for remote and rural and island communities, where a whole systems approach could allow effective decarbonisation, while also creating substantial local economic benefits. Support for hydrogen production and use in these areas would also assist in job retention and creation in these areas.
Scotland's island and rural locations have access to vast renewable resources. Despite this, they suffer from high fuel costs resulting in high levels of fuel poverty. This is the result of a combination of factors including constrained electricity grids, limited penetration and/or interconnection of gas grids and the high costs of transporting fuel. High fuel prices and carbon intensive fuels have a negative impact on energy intensive industries and commercial activities, such as the whisky and distilling sectors.
An integrated energy system, that includes hydrogen, can allow better local management of supply and demand, allowing an increasing penetration of renewables in the system. Examples of this approach are emerging in the Western Isles and Orkney where hydrogen is being developed as a solution that can supply an increasing diversity of demand alongside increasing electrification.
In addition, proximity to large scale offshore renewables, may allow islands and rural locations to play a key role in production and export of hydrogen to the rest of Scotland, UK and Europe.
Our islands are microcosms of the rest of society. Many already have ambitious plans to be major renewable energy hubs, including establishing hydrogen production facilities to tap into the islands' wind, wave and tidal generation capacity. We wish to support and encourage this aided by the Islands Growth Deal which will target £100m funding to a range of areas including energy transition and local sustainable economic recovery and growth.
Case Study – Place based island projects
Islands offer the potential for valuable shared learning from pioneering hydrogen technology which could inform and accelerate decarbonisation in the hard-to-decarbonise sectors in Scotland, the UK and other carbon intensive countries. Recent Scottish Island projects include:
The Scottish Western Isles Ferry Transport using Hydrogen (SWIFTH2) - feasibility study conducted in 2019 sought to determine the viability of exploiting the isolated wind resource of the Western Isles to produce green hydrogen (isolated due to the size of the subsea connection cable, 33kV makes the Western Isles transmission network the weakest in the country).
PURE (Promoting Unst Renewable Energy) – early demonstration of integrating local wind production with hydrogen storage and displacement of fossil fuels in islands.
H2Seed (Hebridean Hydrogen Seed) – demonstration of renewable generation and AD biogas from municipal waste to produce hydrogen for a refuelling station.
Surf'n'Turf –production of green hydrogen from wind and EMEC-based tidal energy in Orkney to provide green power to quayside Marine ferries.
BIGHIT – building upon Surf 'n' Turf and implementing a fully integrated model of hydrogen production, storage, transportation and utilisation for heat, power and mobility with electrolysis from additional wind, based in Orkney.
OHLEH (Outer Hebrides Local Energy Hub) Utilising increased levels of industrial fish waste and smart wind generation it produces both hydrogen and oxygen; with the hydrogen being used to provide fuel for both a council refuse lorry and heat and power to a salmon hatchery, which also utilises the produced oxygen to rear the young fish.
HyDIME – the design and physical integration of a hydrogen injection system on a commercial passenger ferry.
HySPIRITS – design of the world's first hydrogen fuelled distillery.
HyFLYER – demonstration of the world's first hydrogen fuelled inter-island flight.