Climate Change (Scotland) Act 2009 (Scottish Carbon Budgets) Amendment Regulations 2025: statement

Energy Supply

Decarbonisation of Scotland’s electricity sector has been a significant driver of emissions reduction over the past two decades. In 2023, 91% of electricity generated in Scotland was from zero or low carbon sources (including nuclear and pumped hydro).^[3] To decarbonise our energy supply, we must address the remaining sources of emissions arising from Scottish electricity generation, which are from three main sources: Peterhead gas-fired power station, Energy from Waste (“EfW”) sites and island diesel generators.

The largest remaining source of electricity emissions stems from Peterhead power station, which generated 0.6 MtCO2e in 2023. SSE, the operator of the existing Peterhead gas-fired power station, has submitted plans to develop and transition to a CCS-enabled Combined Cycle Gas Turbine (“CCGT”) to replace the current power station just after 2030. This is a live planning application which is with Scottish Ministers for consideration. Unabated gas will continue to play a back-up role throughout the transition to clean power, ensuring security of supply and providing sufficient capacity until it can be safely replaced by low carbon technologies. Proposals and policies set out in the next CCP will be focused on working with the UK Government and SSE to decarbonise CCGT generation in Scotland, through the use of CCS and alternative fuels.

The next largest remaining source of emissions is from EfW sites, which generated 0.3 MtCO2e in 2023. The focus of proposals and policies in the next CCP to tackle EfW emissions will be on reducing the amount of residual waste that Scotland produces and decarbonising what residual waste is produced, through removing high-carbon intensive materials from EfW feedstocks (for example, plastics), and taking opportunities to decarbonise existing and new EfW infrastructure, e.g. through the application of local heat networks (NP4 Policy 12),and carbon capture, utilisation and storage, and facilitating the development of a Sector-Led Plan to minimise the Carbon Impacts of the Energy from Waste Sector, for publication in 2027. Proposals and policies to reduce waste, maximise reuse and recycling and decarbonise any remaining residual waste are mainly accounted for in the waste management sector, as set out below. These are further supported by policies, such as the proposed expansion of the UK Emissions Trading Scheme (“ETS”) to include incineration, which aim to further divert plastic waste from incineration by placing a carbon price on such emissions.

Island diesel power stations make up a residual and relatively negligible source of emissions – 0.05 MtCO2e in 2023 – but play a crucial role in ensuring security of electricity supply for Scottish islands. These generator sites are all owned by SSEN plc., and include power stations on Shetland, Orkney, Lewis, South Uist, Barra and Islay. Diesel generation is carbon intensive, costly to operate and sometimes needs to operate for long periods while islands are disconnected from the mainland. Proposals and policies set out in the next CCP will highlight the need for collaboration with SSEN to drive forward progress in these areas, reduce reliance on island diesel power stations through supporting establishment of new connections between islands and mainland; and exploring the use of alternative, non-fossil-fuel based solutions to diesel for back-up supply.

Proposals and policies set out in the next CCP will also consider how to drive faster decarbonisation through increasing renewable energy capacity and hydrogen deployment, for example through hydrogen to power, which is the conversion of low carbon hydrogen to produce low carbon electricity.

As set out in the CCC’s Carbon Budget 7 report^[4], which provided advice to the UK Government on the level of the Seventh Carbon Budget (2038 to 2042), a key priority for reaching net zero is to make electricity cheaper, through rebalancing prices to remove policy levies. The proposals and policies in the next CCP will highlight the importance of working with the UK Government to influence the outcome of Review of Electricity Market Arrangements to focus on reducing remaining emissions in the power sector.