Economy, Energy and Tourism Committee

Meeting date: Tuesday, June 29, 2010

Official Report 310KB pdf

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Energy Inquiry

Item 4 is consideration of an update that the committee requested from the Scottish Government on the implementation of recommendations from our energy inquiry. Do members have any comments on what is quite a lengthy document? I also point out that a supplementary paper on recommendation 148 has just been submitted.

When I looked through the updates, one or two points caught my eye. This might be a question as much as a comment, because it might simply be an oversight on my part, but, when I read through the update on recommendation 118 on page 13 of the paper, I could not for the life of me find anything about the Beauly to Denny line, which seemed to be the single most important aspect of that recommendation. Is there any explanation for that? Has the Government not provided an update on that, or have I simply overlooked it?

I think that it has.

I do not see it. The paper mentions the Beauly to Dounreay, the Beauly to Keith, the east coast and various offshore transmission lines but does not appear to give an update on Beauly to Denny. The committee has already looked at that, but the fact is that it is the single most important project. If I am right and the Government has not provided an update, we should ask it to do so, because none of the rest of the projects around Beauly can happen until the Beauly to Denny line has been completed. We need to know the timescale in that respect.

There is a brief mention of

“consent for the Beauly Denny upgrade”

on page 17, but it is a matter of opinion whether that consent has come through yet.

When the Minister for Enterprise, Energy and Tourism came to tell us about the project in January, he said that there was a whole range of further developments that he expected to happen within a relatively short time, including the potential undergrounding of feeder cables and mitigation along the length of the Beauly to Denny line. There appears to be no update on any of that in this paper.

It is worth asking for a specific update on progress on dealing with outstanding planning issues with regard to the Beauly to Denny line.

Do members have any other comments?

We certainly need more clarity about community benefit, which is a subject that some of us were beginning to debate. After all, anyone who begins to collect information about the current situation in the country will find that there is a wide range of different kinds of benefit. In that respect, I found this morning’s discussion with Vattenfall very interesting. The fact that a high volume of oil was coming ashore at Sullom Voe led to a particular agreement for the Shetland Islands in the Zetland County Council Act 1974. However, smaller volumes with higher value are being proposed for wind and other renewables projects for community benefit purposes. We need to get some kind of overview of what is an acceptable paradigm for that. The matter affects a lot of people, it affects how people view the process of renewables and, in particular, it helps to strengthen people at the local level so that they can do things off their own bat. A much more comprehensive view needs to be taken. The examples show that councils are already taking control of resources; they are spreading their interests more widely. Indeed, there is talk in Highland of a levy, albeit that people are questioning its legality. People want to see a definite outcome for many aspects of the strategy. We should investigate the area, but we should also ask the Government for guidance.

Last week, we got the answer to our question on planning consents and community benefit. In effect, the answer was, “Sorry, we do not collect the data.” We have written again to say, “Don’t you think you should? Please do so.” I agree with Rob Gibson that we should ask the Government whether it has thought about creating a framework for community benefit in Scotland. In particular, we should ask whether legislation is required to facilitate agreements between local authorities and communities, and developers. Perhaps we should also ask the question of the Crown Estate, as that will put the issue on the horizon for it and put what it says on the record.

We made recommendations on the energy efficiency action plan. I think that we said that any delay beyond the end of 2009 would be unacceptable. A draft action plan has been published and a working group will meet over the course of the summer, but the final action plan will not be published until later in the year—it has slipped quite a lot. Reading through the 53 pages of the response, I note that three or four elements rest quite heavily on having a finalised energy efficiency action plan. We were robust in our view that the action plan should not slip beyond the end of 2009, but it is now doubtful whether we will get it in its final form in 2010.

I have a couple of points, first on reserved matters. The update on paragraph 128, on the fossil fuel levy, says simply that the United Kingdom Government has given a commitment to “review” the matter. From press coverage a few weeks ago, one might have deduced that the commitment goes a bit beyond that, so we should ask the Scottish Government for an update on any developments since that was drafted. In the update on paragraph 121, the Government says that it welcomed the cross-party support for a review of transmission charging in the debate on 21 April, but it does not say what developments or discussions have taken place since that time. It might be useful to have an update on that.

The Secretary of State for Energy and Climate Change has been in contact with the Scottish Government. I got that information from John Swinney last week in an answer to a parliamentary question. I suspect that discussions are taking place in that regard.

I am sure that that is right, but it would be helpful for the committee to know as early as possible the substance of that.

On the first point, we wrote to ask for an update and have been told that we will be kept informed, so we will keep an eye on that. On the second point, we wrote to ask for a copy of the correspondence between Chris Huhne and the Scottish Government, but we have not yet received it. We also wrote to Chris Huhne to ask him to meet the committee at some point. Sources tell me that that may be being looked on favourably. We will wait and see.

Excellent. My other point is about new wind power developments. I am looking in particular at paragraphs 130 and 131. Paragraph 131 says that, in its response, the Scottish Government indicated its commitment to processing all new applications under the Electricity Act 1989 within nine months, other than those that have been referred to a public local inquiry. I am surprised that we have not been offered an update on how the Government is doing with that commitment. Without having added up the number of those applications, I suspect that the Government might have slipped somewhat behind its target. It would be useful to get an update from the Government on how many applications it has indeed completed within nine months, and how many it has not, with the figures split between those with and without a PLI. That would be helpful. That was a clear commitment, and I suspect that the Scottish Government might be struggling with it.

Still on those two questions, we also raised issues to do with consents. We pointed out that the record for approving new wind power developments has been pretty poor since 2007. I checked with my own sources to try and get an update on that this morning before the committee meeting. My understanding—just from accessing the website—is that the record since 2007 remains pretty poor. It appears that 16 applications for new wind power developments have been decided since May 2007—11 have been approved and five have been rejected. The 11 approvals account for 1,676MW and the five rejections count for 1,153MW. By my calculation, that means that more than 40 per cent of potential new wind power has been turned down over the past three years. We raised that point in our report. I consulted my own sources, but it would be helpful to get an official Government update on those numbers for new wind power developments determined by the Scottish Government since May 2007.

Did the sources that you used establish just how large the Lewis wind farm was going to be, and whether that accounted for a large part of the total?

Yes. The Lewis wind farm was to be 652MW. It would have been the biggest in Europe, had it been approved. Clearly, however, it was rejected, along with those at Calliacher, Clashindarroch, Greenock and Kyle. There is a long list of substantial projects that have been turned down. We need an update from the Scottish Government on how well it has been doing with consents for new wind power developments since May 2007.

I have two questions about paragraph 146. It mentions the forum for renewable energy development in Scotland and I was wondering about the timescale involved, as we raised a lot of points about institutional clutter.

Secondly, the second subparagraph covering the Government’s response says:

“the Scottish Government will bring forward a refresh of the Skills for Scotland Skills Strategy ... This will be published in the next few months.”

Considering the criticism of that strategy and the lack of consultation, I wish to know, before that refresh is published, what consultation will take place, and whether Parliament will get the opportunity to discuss any updated skills strategy. It is a hugely important aspect of the document before us.

I have some of my own points to raise, but I will let other members speak first.

There is not much happiness about relations with the Office of Gas and Electricity Markets. Judging from private conversations that I have had with people in the energy directorate in Glasgow, they are disturbed by an organisation that is based in the south and has no real commitment to renewables in Scotland having such an important say.

There also seems to be a strong grass-roots notion that it would be a good thing if the property of the Crown Estate off the Scottish coast were vested in the Scottish Government.

15:15

I am sure that there are people who say that.

We need to ask the new UK Government whether it intends to refocus the policy direction that is given to Ofgem, to enable Ofgem to concentrate more on how to develop renewables.

On that point, I am encouraged to hear that Chris Huhne might be available to come before the committee at some point. It is important that we structure that meeting to cover the areas that are of most value to us. There is a huge piece in today’s Financial Times about the new Government’s plans for a green investment bank and how it might be structured. According to the article, the Government wants to take away some of the institutional clutter, which would have profound implications for the Carbon Trust, the Energy Saving Trust and so on.

Top of my list for discussion with the secretary of state are the role and function of the green investment bank, including in relation to financing offshore investment; the role of Ofgem and the transmission charging regime; energy efficiency, in relation to which I think that significant changes are under way to consolidate things; smart meters; and tackling fuel poverty.

Members might want to raise other issues; I set out my list to illustrate how meaty the agenda is. I am struck that much of what is in the Scottish Government’s response is contingent on the approach that the UK Government will take. A serious session that covered some of the issues would be immensely valuable and would help us in further sessions with Scottish Government ministers.

In paragraph 138 of our report, we talked about supporting the oil and gas industry in relation to diversification and skills development. When we took evidence in Aberdeen, the witness from OPITO—the oil and gas academy—raised an issue about the application of the offshore oil and gas safety regime and training standards to the offshore renewables industry. The same issue has been raised in informal discussions with oil and electricity companies. It would be helpful to know whether the Scottish Government supports the application of the offshore regime, which has been developed over 40 years of oil and gas exploitation, to the new sector of offshore wind and marine renewables.

Gavin Brown’s point about the energy efficiency action plan is important. It is unacceptable that the Government is using the short-life working group that is considering the climate change targets as an excuse to further delay the plan’s publication. If there is no movement on the energy efficiency action plan, it will not matter what targets are set, because we will never meet them. The plan is crucial to meeting the targets.

The plan has been in the pipeline since 2004 and it is unacceptable that, in the middle of 2010, it has still not been published. As Gavin Brown said, a number of other important matters relate to the plan. We should make clear to the Government in no uncertain terms that further delay to the plan’s publication is not acceptable to the committee. We have made it clear that we should have had a published plan—and not just another consultation—by the end of last year.

There does not seem to have been much progress on permitted development rights for microrenewables, in particular air-source heat pumps. The response refers to the granting of permitted development rights for air-source heat pumps from March 2010. However, that applies only to installations that are not within 100m of another property, which is not much use to anyone. I think that the Minister for Enterprise, Energy and Tourism has visited Mitsubishi Electric Air Conditioning Systems Europe since we last spoke to him, but progress on the issue seems to be slower than it should be. We should raise the issue again.

On the saltire prize and wave and tidal energy support scheme funding, we should ask the Government whether the money to which it referred in the budget discussions has been made available for investment in wind, wave and tidal support schemes in the current financial year, as the Government indicated that it would be, and, if so, how the money has been allocated.

I want to ask a question on the fossil fuel levy fund. It would be useful to ask the Government not just what discussions it is having with UK ministers on having that money released but what discussions it is having on how that money will be used once it is released. The general requirement is to “promote renewable energy”, which is a pretty broad phrase. I would like to know exactly what the Government considers that to include.

You could try to ask a supplementary to my question on that on Thursday morning.

Jim Mather has already said in Parliament that he supports the proposition that there should be wide consultation on that issue.

I think that that consultation should be starting sooner rather than later. If the money becomes available, we should be in a position to spend it as quickly and efficiently as possible.

The final point, which I meant to mention earlier, is similar to the point on the Beauly to Denny line. I want to get an update from the Government on progress on the supergrid, as that is a key issue. I should declare the interest that I was at a Climate Parliament meeting in Seville last week, which was paid for entirely by the Climate Parliament with support from the European Climate Foundation. One point that was made was that, if we get the supergrid in place for the North Sea and for the solar farms in the south, we will reduce the capacity that we require from renewables projects by 30 to 40 per cent. We will balance the different needs much more effectively if we have the supergrid in place, so it is important that we make that progress.

The clerks are looking like they have plenty to be getting on with over the summer. Are we content to raise with ministers the issues that have been mentioned by members?

Members indicated agreement.

That takes us to item 5, which will be in private. Let me say, before I conclude the public part of the meeting, that I hope that everyone has an enjoyable, if all-too-brief, summer recess. I am sure that you will all be working very hard, as I will be and certainly as SPICe and the clerks will be after the work that we have given them today. Have a very good summer.

15:21 Meeting continued in private until 15:51.