I would like to update Parliament on the steps that we are taking to set out our vision for the future net zero energy system.
Earlier this year we consulted on the draft Energy Strategy and Just Transition Plan. Today we are publishing the responses to the consultation on the draft along with the independent analysis report that was commissioned to examine the responses received.
This report confirms broad support for our net zero vision and highlights the importance of providing policy certainty to enable the required investment in skills, infrastructure and technologies.
The analysis report also shows the need to reach net zero in a way that fairly spreads the benefits and costs of decarbonisation across society. That’s why our commitment to a just transition is so important. We are making available funding of almost £5 billion over this parliament in net zero energy transformation, including £1.8 billion to accelerate heat decarbonisation, with at least £465 million to support those least able to pay for the transition.
We are already making excellent progress in transforming our energy sector. Last week I was delighted to launch the Onshore Wind Sector Deal. This is a great example of a shared commitment between Government and industry that will bring forward investment in skills and the supply chain
The Sector Deal is a key part of the Bute House Agreement, and over the past two years the parties of Government have been working together to grow the renewables sector and to create economic opportunity and sustainable green jobs across Scotland.
There is still work to be done though. Whilst we were pleased with the result for onshore wind in Scotland in the recent Contracts for Difference Auction, the absence of offshore wind signals that the UK Government has failed to recognise the current market challenges that sector faces. We urge the UK Government to address this disastrous outcome in time for the next allocation round.
As we have set out in the ESJTP, we believe that any new extraction of fossil fuels must be subject to very strict climate compatibility tests. Our focus must be on meeting our energy security needs, reducing emissions, delivering affordable energy supplies, whilst ensuring a just transition for our oil and gas workforce as North Sea resources decline.
To achieve this, we need to harness the skills, talent, and experience located in the North East to support the buildout of net zero technologies in Scotland. We are already acting, for example, through our 10-year £500 million Just Transition Fund - but the UK Government need to play their part to enable this transition too.
The electricity network will be critical to delivering the ambitions set out in the draft Energy Strategy and Just Transition Plan.
High levels of investment in electricity transmission infrastructure in Scotland, and the wider GB electricity grid, are required to ensure clean, affordable renewable electricity is available where it is needed.
A significant amount of renewable generation in Scotland is currently ‘constrained’ as there is not enough space on the electricity network to transport the power.
Annual constraints costs across GB could reach up to £3 billion worth by the late 2020s. These costs are paid for, in large part, by consumers across GB. Many of the network projects currently proposed in Scotland are aimed at lowering these constraint costs as the cost of the infrastructure will be less than the potential costs of constraints.
While network build is vital, it must be delivered with lasting benefits for our economy and for the people of Scotland.
Scotland’s natural endowment makes it an extremely attractive place to site renewable generation. We must translate that huge potential into sustainable jobs, community benefit, skills and local economic development.
Investment in networks will play a crucial role in creating long-term, high quality, green jobs that will attract and retain talent in communities across Scotland.
I am aware that communities in areas that may be impacted by proposed electricity network developments may have concerns about network infrastructure.
As established in the National Planning Framework 4 (NPF4), which was approved by the Scottish Parliament earlier this year, the views of local communities are of the utmost importance. It is vital that everyone has the opportunity to engage in decisions about future development. This engagement must happen as early as possible and should be effective, collaborative and meaningful.
The NPF4 also ensures that appropriate checks and balances are in place, and that potential impacts on our environment and our natural heritage are fully assessed.
I can assure Parliament that potential impacts – on communities, nature, landscape and other valued natural assets – are very important considerations when determining applications for consent.
Despite the powers to mandate community benefits from renewable energy and grid infrastructure developments being reserved to the UK Government, we are continuing to work with communities and a wide range of energy businesses to maximise community benefit from existing and new developments.
Some developers are already leading the way. And as part of the Onshore Wind Sector Deal, developers have committed to meet or exceed the national benchmark set out in the Scottish Government’s Good Practice Principles from Onshore Renewable Energy Developments.
I want to see network companies take similar steps and I have strongly encouraged the network companies to bring forward tangible benefits to communities where infrastructure is proposed. This includes measures that can have a positive impact on household fuel costs. I have urged the network companies to be creative in these solutions, and work closely with communities to tailor them.
I welcome recent initiatives in this vein, and hope to see yet more innovation and good community engagement on how community benefit can be best deployed, in a way that meets communities’ own needs.
We remain committed to a net zero future and we will use every power at our disposal to support sustainable economic growth and maximise the opportunities of the green economy. This includes ensuring that electricity network infrastructure comes with economic and social benefits for Scotland.
By publishing the analysis report on the draft Energy Strategy and Just Transition Plan today, we’re demonstrating the open and transparent approach that is central to a just transition. As set out in the Programme for Government, we will continue to engage with a range of stakeholders across Scotland, including the Just Transition Commission and the Scottish Energy Advisory Board, as we work towards the final publication by summer 2024.
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