Economy, Energy and Tourism Committee,

Meeting date: Wednesday, May 27, 2009

Official Report 328KB pdf

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Energy Inquiry

Item 2 is the final evidence-taking session of our energy inquiry. I welcome back the Minister for Enterprise, Energy and Tourism and thank him for giving us the opportunity to ask further questions on some of the key issues that we might want to address in our report. I do not think that there is any need to reintroduce the minister's team of officials, who all attended the previous meeting—welcome back. Lewis Macdonald will open up the questioning.

I have a couple of questions about the responses that you gave us the last time you appeared before us and the submission that you provided us with following that appearance. Given that you say that you are a full member of the Scottish energy advisory board, although you were unable to attend its first meeting, you will understand that I was extremely surprised to find that your name is still absent from the appendix to your submission that lists the members of the board. I take it that that is another administrative error rather than a change since the board's first meeting.

I think that that list is a cut-and-paste of the names of the people who attended the first meeting. I can assure you that I am embroiled and thoroughly involved in the board's work.

Is your name the only minister's name that is mysteriously missing from the list? Are there other ministers whose names ought to be there and are not?

The names that we have provided are those of the external players. You can assume that, in addition to my involvement, the First Minister will maintain a healthy involvement as we move forward.

Understood—thank you very much.

In response to some questions on renewable energy in general, you indicated to Marilyn Livingstone that you thought that your Government's consent rate over the past two years was

"about twice the going rate of consents under the previous Administration."—[Official Report, Economy, Energy and Tourism Committee, 13 May 2009; c 2106.]

That claim surprised me, which is why I asked a supplementary about the rejection rate.

The figures that you have provided us with make clear what both those rates are. Let me quote back to you from that information. Since May 2007, you have approved 22 projects with a combined renewable energy capacity of 1,686.1MW and have rejected five projects with a combined renewable energy capacity of 1,157.1MW. My reading of that is that you have rejected approximately 40 per cent of the renewable energy capacity of projects that you might have approved. According to the figures that you have provided us with, in its final four years the previous Administration approved 17 projects with a capacity of 1,413.1MW and rejected two projects with a capacity of 70MW. My reading of that is that the previous Administration approved 95 per cent of the capacity of projects that it could have approved, whereas your approval rate has been 59 per cent. That is quite a difference. In fact, the rate of return is about two thirds of what it was under the previous Administration. Do you accept that?

I accept that there might have been an element of procrastination under the previous Administration, which left us with a backlog of decisions in the pipeline on projects that we had good reasons to reject. On most of those projects, we honourably provided quick decisions. On the Lewis proposal, we initiated the Halcrow study and further studies on grid upgrades, and, in the case of Kyle and other proposals that would have been impacted by air traffic control issues, we engaged thoroughly with airports and the national air traffic control authorities.

But you must accept that it is the responsibility of ministers not to put applications in front of yourselves but to make decisions on them, and that your decisions are overwhelmingly more negative than those of the previous Administration. Your rejection rate of potential additional capacity is eight times higher than that of the previous Administration.

To be fair, if we consider the timeframes, the legacy element and what was in the pipeline with a strong predisposition to rejection, the previous Administration can claim wholesale paternity and maternity rights to the backlog.

I am sure that you do not mean to imply that you know what previous ministers would have done with applications that they did not determine. The responsibility for those determinations clearly lies with you.

You mentioned a legacy element, and have pointed out that the applications for the five major projects that you have rejected predated your appointment. How many of the applications for the 22 projects for which you have given consent predated your appointment?

A good number of them.

Can you tell us how many?

I cannot tell you exactly how many.

Did all or almost all of those applications predate your appointment?

In the early period, all of the applications would have done so. Obviously, that would be less so as time passed.

So you expect that nearly all of the 22 applications for which you have given consent predated your appointment. Are there any exceptions? Were any of the 22 applications made since the Government took office and you were appointed as minister?

I am not certain about that.

We can find information about that and send it to the committee.

The question is important if the argument is that applications were rejected because they were poor and that the poor applications were made under a previous Administration. It is clear that the same logic should be applied to the applications to which you have consented. Is that fair?

There is a new phase. Those who submit applications have a much clearer understanding that they must do a lot of work to ensure that environmental considerations are squared away, that they have an accord with communities, and that there is local buy-in. In that climate, with work being done beforehand, I think that there will be a higher percentage of consents. I do not think that such work was done to the extent that we now like it to be done. That is part of the evolutionary process.

My concern is that if developers think that there is a far higher chance of an application being rejected under the current Administration than under previous Administrations, that might impact on the number of applications that are submitted. Can you identify trends in the numbers of applications that have been submitted, particularly in the onshore wind sector? Is it possible to say whether the numbers of applications that have been made per annum or per month have gone up or down in the past two years?

I invite Jamie Hume to say something about application rates.

We would need to break down the sub-50MW applications and the 50MW-plus applications. Some have been extension applications. Since I started in the job, we have tried to analyse whether there is a clearly discernible pattern, but nothing has readily emerged. Applications appear to be relatively sporadic. However, there has been a lot of focus on making clearer to the developer community the pre-application work that needs to be done. The objective is to reduce demand in all the different bits of the system by reducing the number of applications that may end up at the inquiry stage, for example. We can certainly analyse the trends and find out whether any patterns emerge, despite our view that there is no particularly significant pattern.

I understand that you may not have all the information readily to hand, but you must have a feel for what is happening. Officials who see applications on their desks before they go to the minister must have a feel for whether more or fewer applications for developments with a capacity of more than 50MW are being submitted.

Colin Imrie, who ran the consents team for a couple of years, may have a view on that.

I refer to what we introduced in early 2008. In late 2007, the minister announced that we would work towards a nine-month target for the approval of applications. There was also a clear signal to the industry that it is important to try to resolve environmental, aviation and other issues in advance rather than try to solve them in the system. It is much more difficult for people to solve issues when they have to deal with the fact that they are in a process in which addendums must be advertised and so on. It is far better to try to solve issues in advance and get community buy-in.

I do not have the exact figures that are being sought, because I have not done the job for a few months, but I know that at least seven—perhaps more—well-prepared applications came in after that period. Some of those applications have now been approved, of course. The Siadar application met the nine-month target, and approval of the Whitelee wind farm extension application, which came in after that, was announced last week. Judging from where we were sitting in the consents unit, I am not aware of any particular slowdown—between seven and 10 applications came in after that period.

I would be very interested to have that information. I hear what you say about streamlining some of the process, but it would be interesting to know how developers view the situation. I am particularly interested in the onshore wind category above 50MW, which has been the subject of refusals. Has that acted as a disincentive to applications? To what extent can you identify that? Does Mr Imrie have some information on that?

I am sure that follow-up information can be provided. We have been advising applicants to be very careful in judging whether their applications will have a chance of succeeding. It is important to sort out the impacts in advance. The feedback that we have received at official level indicates that applicants welcome the chance to know what is and is not possible. Applicants can end up wasting a lot of money on applications that will not succeed, for whatever reason. Developers have therefore generally welcomed the opportunity to get a clearer signal in advance on what is practical.

That is interesting. I will mention a specific project—without, of course, expecting the minister to comment on it. The minister and his officials will be aware of the proposals for an offshore wind farm in Aberdeen bay, and I believe that there have been discussions on it. I would be interested to know whether that is the sort of project where the Scottish Government can talk to developers in advance of an application to facilitate its proceeding in an acceptable form.

We have been very much engaged in that. The issue is perhaps best addressed by Jamie Hume, who has been directly involved in it.

The project is fantastic, and would clearly be of tremendous benefit to Scotland, for a wide number of reasons, not least the potential to bring in turbine manufacturers to locate in Scotland and to establish the whole notion of a centre of excellence, with Scotland becoming the go-to place for offshore renewables development. It is fair to say that the project was taken by Aberdeen Renewable Energy Group to a point of relative clarity around the objectives and what would be needed to develop it, but the group's successful lobbying to get €40 million from Europe has added a harder edge as far as the timeframe is concerned.

As was announced at the all-energy conference last week, Duncan Botting, who takes over as the executive chair of the Scottish European green energy centre, is becoming directly involved and will help to pull together a kind of coalition of interests, which brings together for the first time the full range of experience and perspective that is needed for the project to succeed.

I have personally been talking through the issues with some local stakeholder groups, including Aberdeen Harbour Board. A range of quite difficult issues has arisen. On the one hand, the project is ambitious; on the other hand, it is not universally popular. We are 100 per cent supportive of the concept and we are 100 per cent behind any process that will lead to a successful application and a successful accessing of the money from Europe. However, there is still work to be done to frame the clear objectives. Should there be 28 turbines or 11 turbines? Who will be involved? Who will the end users be?

We have a slightly delicate line to follow between helping to get the project to the right stage and the fact that the consents unit sits in my team. For that reason, Government involvement in the project has been handed to SEGEC. The whole process is now taking place within that sphere—that is where we are at. The first fresh meeting on the matter took place at the all-energy conference last week. We are hopeful that the team that is now in place will be able to drive the project through to a successful conclusion.

That is helpful.

I have one final question for the minister. I acknowledge the points that have been made about seeking to address the aviation issues that have held up wind farm decisions, or negated them, as the minister described it. There is another potential set of similar issues to do with navigation. We have talked about those issues applying to offshore wind farms, but if wave and tidal energy projects were to develop in a commercial form, navigation issues would arise with them, too. Are you in discussion with Westminster colleagues and the relevant agencies on aviation and navigation issues? How far ahead must those discussions take place to avoid obstacles arising?

We have been heavily engaged on aviation throughout our period in office. Colin Imrie has led on much of that.

On navigation issues, we are open to full engagement. We recently had conversations with Ian Grant of the Crown Estate to consider what we can do to pull together the interests that can help us optimise the benefit from UK waters. We are looking to do that.

On developer attitude, a quote from a British Wind Energy Association annual report might be useful. It states:

"In 2007 the incoming Scottish Government promised to improve the system in order to maintain investor confidence in what is effectively the renewable powerhouse of the UK. These promises were kept, with a flurry of decisions coming after Government took office and a further voluntary pledge to make decisions on Section 36 projects within nine months of submission."

It continues:

"The role of Scotland cannot be overstated in"

becoming

"the powerhouse for wind energy in the UK".

It states:

"Even when taking into account the offshore contribution, which is all located south of the border, Scotland still currently contributes around half of the UK's overall operating capacity."

So a positive attitude is coming through.

To return to your point, I am particularly keen to engage with the Crown Estate at a national level, because we are talking about a potential 6.4GW capacity, which is material. Even in my constituency, there is potential for 2.4GW off Kintyre, Islay and Tiree, so there is an absolute imperative.

I welcome the engagement with the Crown Estate. The other agency that I hoped to hear you mention is the Maritime and Coastguard Agency, given its role. Is there engagement with that agency?

In essence, the logic of the conversation that I had with the Crown Estate in Tarbert just seven weeks ago was that we should sit down and identify all the stakeholders and ensure that we get them all in a room to have a plenary session. Clearly, that would include maritime and fishing interests.

I want to pursue the point about investor confidence. My questions are really about how policy is driven forward and the minister's role in that in Government. It is desirable for Scotland to realise its wind energy potential, but that requires investor confidence. We can make clear to developers their obligations, but there is a global market with global developers and they can simply choose to go elsewhere, whether that be Spain, Germany or Denmark. One piece of evidence that the committee has uncovered and which merits further study is that the rejection rate in local public inquiries in Scotland in the past five years has been higher than 50 per cent. I am not aware of any policy initiative from the Government to address that. Obviously, that relates to small-scale local projects, but it is a concern.

Frankly, warm words in a dated annual report are not the same as a potential investor considering the decisions that have been made and finding that the rejection rate in megawatts has gone from 5 to 40 per cent in the past two years. That is bound to have a negative effect on developers' locational decisions. I ask the minister to reflect on that. The evidence is that the manufacturing industry seems to be voting with its feet. Consider the energy that the Government has had to expend in trying to rescue the Vestas project. If we are really on the threshold of or even approaching realising our potential as the Saudi Arabia of wind power, how do you explain the fact that we have almost no embryonic manufacturing industry and that that which is here is relocating elsewhere? The reason for that is that it is much easier to get consent in other nations, such as Denmark or Spain, even if the efficiency of wind farms in those countries is comparable with or even less than that of wind farms in Scotland.

The relocation of manufacturers out of Scotland and the UK, or their ambivalence about locating here, is a matter of concern. As the energy minister, what policy developments are you driving? I know that we will hear about one rescue project that has been brokered by the Government. That is not the same as a vote of manufacturing industry confidence in this nation as a powerhouse. How do you respond to developers when they say that half of local public inquiries are hostile and that the number of applications rejected by ministers has risen from 5 to 40 per cent? In policy terms, what are you doing not simply to make it quicker for you to say no, but easier to get a yes?

I feel as if a negative tsunami has just washed over me. An annual report dated 2008-09 cannot be called dated—it is bang up to date. It is made even more up to date by the fact that we rubbed shoulders with the British Wind Energy Association immediately after I spoke at the all energy conference, where we felt the energy in the room. The atmosphere at the conference and at British Wind Energy Association events resembles that during the personal computer revolution of the 1970s, with lots of ideas and people coming forward. Many of the people who are developing new technologies and getting them market ready are indigenous to and rooted in Scotland. The manufacturing sector is beginning to warm up and to understand the potential that is here. Burntisland Fabrication Ltd is developing and opening up new engineering jobs in Stornoway.

The opening speeches at the conference by representatives of Welcon Towers Ltd, which is taking over from Vestas, were incredibly positive about Scotland and endorsed everything that the British Wind Energy Association said in its annual report. People are seeing not only the policy signals from the Government but its vision, goals and constancy of purpose in achieving those. When we came into Government, we set the goal of generating up to 31 per cent of electricity from renewables by 2011. From what has been built on the ground or is consented and will be ready for implementation before that date, we are in a position to say that that number is pretty much made. There is even scope for consenting and building more capacity within that timeframe. People are responding to the signals. When we take our proposition to Europe, showcase what is happening in Scotland and have a dialogue with people, we find that they listen with intent and are looking to learn from us. Even the rest of the UK is looking to learn from Scotland.

Any developer listening to this exchange would be more encouraged if you acknowledged that there was a problem, rather than saying that there is none. It is a matter of concern that local communities remain so hostile in many instances. It would be helpful if you indicated that you are concerned about how embryonic our manufacturing base is and mindful of the fact that the figures tend to suggest a rise in rejected megawatt capacity, which may give developers concern, and if you provided a menu of policy options that the Government is considering. Simply saying that there is no problem and that we are realising our potential is a signal that is not delivering for us in the international marketplace.

Minister, you inherited the crisis involving Vestas. Has the new company had to make provision for the building of larger wind towers?

Yes. I think that that is very much its ambition. It is looking to increase materially the footprint of the plant that it has at Machrihanish. I get the distinct impression that it is looking to evolve its product range over time, whereas its predecessor more or less left the plant with a mission around a static product that did not evolve. That is a key difference.

Are there lessons to be learned from the way in which support for the creation of the original Vestas factory in Campbeltown was given? Was it predicated on particular projects coming to fruition? Do you have any information about that, and can you share it with us?

I am not entirely privy to whether the support was connected to individual projects. However, we have spent considerable time getting in the room the people who are best able to interact with each other and move things forward. One of the key factors in getting the baton passed from Vestas to Skykon and Welcon Towers was the fact that early in the process, after it was announced that Vestas was minded to go to consultation and to withdraw, we got it in the room with developers, utilities, landowners and engineering interests and so on. In essence, we brainstormed to see what the potential was, which reinforced the other things that were happening. The Scottish Government's energy team was in the room talking about our direction of travel; our desire to see aviation, environmental and community interests sorted and squared before applications came forward; and our desire to create a more collegiate environment, whereby people work more in harmony together and we get further economic development and further development of the manufacturing base and we increase added value in Scotland.

So, there is a dynamic to the development of that company, which means that it will be able to adapt to Scottish conditions to a greater extent than Vestas was prepared to.

That is a fair comment.

My second question is on the rejection by public inquiry of certain schemes. We will leave aside the dodgy arithmetic around the number of rejections. One of the largest schemes was in Lewis. We will leave to the historians the question why that scheme was put forward in the form that it was. Is there a pattern whereby applications in certain parts of the country are regularly rejected?

I think not. However, I will let Jamie Hume answer that question.

A previous question was about policies to improve the degree of take-up in local areas. Engagement with local authorities on all these issues is high on our agenda. Last year a series of information-sharing and training seminars were held, which involved the Crown Estate and BWEA. There was discussion with planning officials and elected officials about the range of issues involved and about scope and opportunities. It is worth acknowledging that there is a fair way to travel here. We just did a bit of analysis of all the local authority single outcome agreements, of which only 15 mentioned renewable energy—the rest did not have that in their plans. That shows how much we have to engage with COSLA and local authorities to take forward a common base of understanding. We are planning an engagement session on that later in the summer.

The issue came up at the most recent meeting of the Renewables Advisory Board—it advises the UK minister—which I attended in London. There was a general acceptance in the room that it was not all down to local planning officials, given the pressure that anti-development campaigns are successful at mobilising. Those campaigns have become incredibly sophisticated—for example, by investigating the potential for judicial review of how processes were carried out. A sophisticated and well-organised local campaign can end up derailing a project that might well have been good for the local community. You are right to suggest that rejections are more prevalent in some areas than in others. Issues need to be addressed in areas where there is a high level of resource but a track record of no decisions being taken. However, we are doing what we can to make progress.

On the earlier panel of witnesses, with whom we discussed the Arbitration (Scotland) Bill, there happened to be one of the leading pleaders who take on wind farm applications. You mentioned discussions that you have had, but there seems to be a lack of a Scottish renewables strategy that gets planning rules and intentions through to every level of society including developers, environmentalists, communities and national bodies. When there are so many holes in the fabric of arguments in favour of developing renewables, it is more likely that people will be able to pick off individual applications. Is my analysis correct, and should there be a strategy?

The RSPB's March 2009 report on planning for wind farms says that it is essential to have a clear and well-understood message within central Government and its agencies, and that many stakeholders have held up the approach in Scotland as a good example. I can see that we could benefit from codifying the procedures and tightening them up, but I think that we are coming from quite a good place.

I have to question the urgency with which the issue is being dealt with. Some years ago, Highland Council wrote a huge document that made it nearly impossible for any developments to take place, even dozens of miles away from sensitive pieces of land. Drawing a Scottish strategy together could be one of the best legacies that this Government could leave.

The chief planner has brought his planning guidelines down from 330 pages to 36 pages. The trend is in that direction.

A former energy minister in Britain, Brian Wilson, when questioned on the community benefits of the likes of offshore renewables, said that places such as Shetland and Orkney would not receive the kind of funds that came from the oil industry. He said that communities would not receive that level of funds from the development of renewables.

The record is that community benefit has been pitiful from individual commercial wind farm applications. Communities have to get a full return from their resources, if at all possible. It would be a big help if you gave us a hint of how that kind of approach could be taken with the new marine renewables.

I wonder whether Sue Kearns could give us some insight on that. There have been material benefits of late from the Clyde installation.

We have a lot of experience in trying to maximise community benefits onshore, but you are right to suggest that we have to turn to the offshore side of things, where a lot of work will have to be done. Organisations have been set up, and we have a group looking into marine energy and offshore wind. One of the factors that the group will be looking into will be community benefits. It will be important to consider that right at the start, rather than leaving it to the end.

In Norway, local municipalities can sell hydropower to the national grid, so it is imperative that we give guidance on such issues to communities in Scotland that have opportunities to benefit from wind, wave and tidal power. I hope that you will share our sense of urgency.

We certainly share the sense of urgency. I note that Islay Energy Trust has been pretty successful in brokering arrangements with potential investors in its neck of the woods. Also, in relation to Lewis Macdonald's earlier point, we would envisage having communities in the room when we have that conversation with the Crown Estate and others on offshore wind.

That is an important point. The development of community renewables is really making a difference, particularly at the small-scale community level in rural areas. However, I suspect that there will also be opportunities in urban areas in future.

The issue of commercial wind farms has always been tricky. Under the planning rules, applicants have been specifically encouraged not to refer to community benefit in their application in case it is seen as a "bribe". One of the reasons why large-scale wind farms do not gather community support is that they are effectively seen as a lose-lose option. You are getting a large number of pylons or large towers on your hill and you are not getting any money out of it. If there are jobs, they tend to be for contractors who are bussed in from the cities. Once the contractors are there, there are few jobs left. It is important that those issues are addressed more seriously, whether they relate to planning, policy or the way in which applications for a development come forward.

The latest ideas, particularly those that are coming out of the islands—such as Shetland, with its application for the Viking plant, and the Western Isles—show that to build community support for renewables, you need to build in a much clearer and more publicly acknowledged element of community benefit. An example of that could be community ownership of the land on which the wind farm is based, which would provide a much higher level of support to the community, and more direct involvement of the community than a simple, small pay-off per megawatt, which is what used to be the going rate. That is an important issue, which the committee will want to consider.

As a small coda, we could do with a list of the schemes that were rejected. It would be interesting to consider whether any public or community-owned land is involved in any of those schemes.

The Government's response contains a list of the rejected applications, which were at Lewis, Kyle, Greenock, Clashindarroch and Calliachar.

But no detail of whether there is community land involved, which is the point I was making for the community interest. I do not need to be corrected on that.

Minister, you have heard from all sides. This is a huge issue. I wonder whether you could ask one of your officials to take a look at our evidence session with those involved in the planning process, who were deeply frustrated that the terms of reference for local public inquiries in many ways militate against a positive decision. You have just heard from Colin Imrie, who was the head of the consents unit, on his view that we should be using community benefit as an incentive. Why has that not happened yet and when will it happen? Will you undertake to facilitate an early discussion on that at the forum for renewable energy development in Scotland? It is becoming one of the themes of the Scottish energy advisory board to consider changing the crazy situation in which developers are discouraged from highlighting community benefit as a central part of their application. If we can move on that as soon as possible it would make a significant difference at the local level.

I am genuinely open to that.

One other planning issue that is of considerable importance to this committee is the Beauly to Denny line. I am not expecting you or your officials to make any comment about whether it will be approved, but the committee is concerned about the timescale. At present, it seems that a decision on that will not be made until towards the end of the year. Could you assure us that the Government will do everything that it can to ensure that the decision is taken—whether for or against—as quickly as possible, and, if possible, earlier than is currently being indicated?

You can take that as read. I underline the key point that we have to be absolutely sure that due process is followed to the letter. That is what is consuming time at the moment.

I appreciate that due process must be followed. However, one wonders why due process must take several months rather than less time, considering that the inquiry has been completed.

I would say that the Council of Economic Advisers is quite an impressive group. It recommended strongly that the Government get an independent energy report. Why did it recommend that?

I would love to be a spokesman for the Council of Economic Advisers, but I am not. It has made its recommendation and, in the spirit of openness, we have taken that firmly on board.

So you are saying that, as the minister for energy, you do not know why the Council of Economic Advisers thinks that that is important.

I have accepted that it thinks that that is important.

What is the current state of play with regard to that independent report?

Work in progress.

Are there any indications of when that report is likely to be published?

I am not entirely sure. Colin, what do we think?

It is a work in progress.

Before Christmas?

The fact that it is independent means that the timescale is a little bit more out of our control than would otherwise be the case.

So no indication has been given with regard to when it might be finished.

I have been given no such indication.

I think that "work in progress" means that we will not see anything for a while.

I will leave that line of questioning there, then.

On energy efficiency, the last time that we spoke, I urged you to submit a better outline, and I have to say that I think that you have done. I am not an expert on energy efficiency but, in the 10 or 12 pages that I got yesterday, I think that there was something that I would call an outline. I am happy to give you credit for that.

In your submission, you state that the Government is due to publish its own carbon management plan. When will that be published?

A specific date for that has not been finalised yet.

I do not want to appear petty, but I would like to know when that might happen. Will it be before the recess, in the autumn or some other time? Has the work been done?

The work is being done as we speak, but I cannot give you a firm date for publication.

It is not within our patch, so I am not sure what timeline those folks are working to.

It is not within the energy portfolio. Is that right?

It is on the climate change side of the house.

But it will feed in to work that we are doing on energy efficiency.

It might help, minister, if I asked your colleagues in the climate change unit whether they could give us an indication of the rough timetable for the publication of the plan.

We are taking that marker away with us.

You specifically referred to the 2011 target. In the report that you gave us two or three weeks ago, just before the previous time that you appeared before this committee, you said that Scotland has 5.5GW of renewables installed, consented or under construction. Can you give me a rough idea of how that figure breaks down into those three categories?

I think that the figure is nearer 6GW now, following the announcement last week.

With the Whitelee wind farm coming on stream, well over 3GW is operational and at least 2.5GW is in construction or just about to be in construction.

So 3GW is operational—

Well over 3GW. I do not have the figure to hand. Do you know the figure, Jamie?

Not any more precisely than that.

It is going up. I think that, following Whitelee coming on stream, the figure is 3.4GW. I can get the exact figures and come back to you.

That would be helpful.

Minister, you talked about the target of having 31 per cent of our electricity coming from renewable sources by 2011. Given the figure for operational renewables that you just mentioned, what percentage of the electricity that is consumed in this country comes from renewables today?

Marginally ahead of 20 per cent.

The last year for which we have figures available is 2007, when the figure was something over 19 per cent. We will clarify that for you.

Was that the figure for consumption?

Yes.

So it is roughly 20 per cent.

We cannot be sure until we get hold of the statistics that will come through later, but, given that we now have well over 3GW of operational renewables, we would expect the percentage of electricity that comes from renewable sources now to be around 25 per cent.

The next set of figures will come out around the end of the year.

And they will be for 2008, will they not?

Yes.

Our estimate, as I said, is that we will be coming near to the 25 per cent mark.

The last published figure was around 20 per cent, but you think that, if the data were published today, the figure would be around 25 per cent. Is that correct?

Yes, particularly because the Whitelee wind farm adds 312MW to our capacity, which is a significant amount.

What discussions have taken place on the North Sea supergrid in the past 12 months or so?

Work is being done on that through the strategic environmental assessment. We have also had first-class connections with Europe on the matter. The First Minister made some good overtures in his dialogue with Andris Piebalgs, the European energy commissioner, which we followed up on. He put us in touch with Georg Adamowitsch, the European grid co-ordinator.

Adamowitsch is a significant player. We know for a fact that he will be the continuity figure after the European elections. We briefed him extensively about Scotland's potential in a way that opened his mind: we had him make presentations to conferences here, and we spent two very full days with him, which included an extensive meeting with the First Minister. The net result of that has been that Scottish Government energy officials now sit on his grid working party for Europe. We have plugged in to the main stream and are doing everything that we can in that area, as well as maintaining a dialogue with National Grid, the Office of Gas and Electricity Markets, the Crown Estates and others.

We were represented on and made a presentation to Adamowitsch's grid group in February and attended a conference in Marseilles in March.

I should also stress the fact that we are working closely with the United Kingdom Government officials in that regard. In many senses, the blueprint for a grid with interconnections across the North Sea can be built on the back of the proposals that are already set out in UK terms through national planning framework 2 and, in particular, the report of the electricity network strategy group, which came out in March and puts in place agreements on interconnections between the Scottish islands and the mainland and proposes connections between Scotland and England to allow for increased exports of electricity from Scotland. The interconnections in that blueprint will, of course, include connections with the offshore wind farms in the North Sea, which, by 2015, should include developments off the Scottish coast to the east and west—that is why the on-going work with Ireland is important.

The European Union has now recognised the North Sea grid development as one of its six strategic energy priorities alongside more effective connection of gas corridors in south-east Europe and the improvement of diversity of supply for security purposes through the involvement of the northern seas, which include the North Sea and the Irish Sea. Our work at ministerial and official level and in co-operation with the UK is designed to take forward those European strategic priorities; indeed, we are trying to find collaborative projects to develop as part of the European economic recovery programme and to take forward the North Sea concept. Given all that and the plans for island interconnections from the Shetland Islands and the Western Isles that have already been identified as priorities in the UK's ENSG report, Scotland has the opportunity to be at the leading edge of developing the technology to integrate direct current cables into alternating current systems.

Your supplementary evidence refers to

"Potential gaps / risks to reaching our 2020 target and options for reducing these".

I have a couple of questions on enterprise, energy productivity and skills and jobs. First, with regard to the energy and construction sector, you highlight the need to retain existing jobs, to keep us competitive and to create new jobs. What additional funding is Scottish Enterprise making available to the companies that most need support at this difficult time?

There is much more of a focus on ensuring that the sector comes together and that there is more cohesion. A central plank of the recovery programme is to ensure that the energy sector realises its potential and attracts the full involvement of commercial interests. That is business as usual, and those signals are being recognised by Vestas and other companies.

The construction industry's role will obviously be crucial. You say that it is business as usual, minister, but the fact is that for many companies that is simply not the case. They are under real threat, and many people, including apprentices, are losing their jobs—Michael Levack, for instance, told us that the industries were experiencing a flight of skills. There is huge concern that business as usual simply will not do, and I seriously believe that Scottish Enterprise has to refocus its efforts. I know that it is carrying out a lot of work with account-managed businesses and business gateway but, from evidence that I have seen in my constituency and in other areas, the group of businesses caught in the middle is giving rise to concern.

Instead of the business-as-usual approach, which is just not good enough, we must have specific policies to ensure that we remain competitive and that the flight of skills does not happen. After all, the question is whether we will be in fine enough fettle when we finally come out of the recession.

The member should look, for example, at the money that we are putting into encouraging energy efficiency and our work on that front with the Scottish Builders Federation and the Scottish Construction Forum. Many house builders are successfully migrating to installing replacement windows and other energy efficiency measures, and they are managing to maintain the integrity of their businesses with support from and as a result of work with the Carbon Trust and the Energy Savings Trust and funding from the Scottish Government. There are huge opportunities, and I am happy to say that many contracting businesses are taking advantage of them.

As you have said, we need to retain skills in the sector and, indeed, upskill workers. However, week after week, more and more apprentices are being made redundant. What influence do you have over the skills agenda? I have been very disconcerted by a number of developments, including the fact that funding for level 2 modern apprenticeships is lower than the level that the industry thinks it needs to deliver the places and much lower than the funding being made available south of the border. As a result—and as the sector skills council for the construction industry has told us loud and clear—companies, which are already under extreme pressure, cannot take on redundant or new apprentices.

Evidence from the sector suggests that we are not training enough apprentices and that the package for those who have been made redundant is not good enough. When I recall how we lost a whole generation of people as a result of the miners' strike, I have grave concerns about the folk who have lost their jobs and what we are doing for them.

As for retraining engineers to carry out retrofitting, install heat pumps and so on, we are talking about specialist trades that the industry has said require work placements. Those placements are no longer available because companies that are losing apprentices and other employees are reluctant to take on such work. Given that that is a huge issue for the Government, how are you working with the Cabinet Secretary for Education and Lifelong Learning to address it, and what funding is being made available?

We held the apprenticeships summit last month, and we are working very closely on the issue with the Cabinet Secretary for Education and Lifelong Learning and with Skills Development Scotland. Indeed, SDS's chairman, Willy Roe, is also chairman of Highlands and Islands Enterprise and as such is very much aligned with the work. We are also bringing forward £95 million of European money to ensure that 75,000 places will be delivered over the piece.

Moreover, we are continuing our very open discussion with the industry, which has made it clear that maintaining continuity of employment and retaining skills will be important for what happens when the recession ends. The oil and gas sector, in particular, retains the folk memory of what happened back in the 1980s, when it downsized its operations and lost a lot of people and talent, especially the young talent in the pipeline. When the good times came round again, the sector found that, when it pressed down on the accelerator, it did not have the skills that it needed to drive forward. In essence, we are trying to create a climate in which everyone realises that we are all in this together and are looking to work with the industry, sector by sector, to achieve that end. In fact, that has been a recurring theme in our work with 50-plus industrial sectors over the past two years, and efforts to address the issue have woven in the involvement of the Cabinet Secretary for Education and Lifelong Learning, Skills Development Scotland and others.

Concerns have also been expressed about capacity in our universities and colleges and, in particular, the situation with school leavers. As you know, applications to those institutions have increased by 30 to 40 per cent and, with the caps that have been put in place, courses in many key subjects are now full.

There has also been an increase in applications for bursary funding. Because of the number of people staying on, my own college, Adam Smith College in Kirkcaldy, needs £500,000 of additional money to meet the demand for bursaries. I think that the figure for Scotland overall is £4.5 million. Minister, I do not have to quote all the statistics; you already know them. How do you plan to support people who have lost their jobs or their apprenticeship places to enter university and college, and what discussions have you and your Cabinet colleagues had on alleviating the situation?

What I can say is that the early indications that more people want to educate or upskill themselves are a heartening sign. I know that the cabinet secretary, the Cabinet and Skills Development Scotland are working closely with the colleges to see how they can channel that enthusiasm through the available resource to ensure that we make best use of it for education. However, that is not my distinct remit, and I am loth to be a spokesman for my colleagues.

What I am saying is that it is important that you have that dialogue in the areas where you will require those skills. If people cannot get into the sectors that are required, that is a big issue for your portfolio. I am asking what influence you are going to have on that agenda.

It is key that we work closely with the sector skills councils. We must also show a willingness to work with each of the sectors, which we have done since we came into government. We have a shared opportunity to channel that enthusiasm and get it to work through.

I have the odd cheap political point to make first. People looking at the technical innovation in this country and the supply of skilled labour will note that they are about a fifth of those of several of our major industrial competitors on the continent—I refer to my experience of teaching in Germany. They will also notice that the biggest technology projects that we have running are not wind farms or anything like that—they are building another Trident and two aircraft carriers, which are all a bit of a folie de grandeur for a rather small and not particularly successful European economy.

What advantages can we gain from our involvement in North Sea oil in terms of routes, expertise and the recycling of equipment that is destined for oil rigs—for instance, generators, combined cycle equipment and the like—to provide a means both of training up manpower, in reconditioning and adapting those things for onshore use, and of producing a much more decentralised form of conventional carbon burning power than we have at the moment? Our interviewees in Denmark were astonished to find that we had a colossal power station—Longannet—that had no connection to any form of district heating. District heating reaches 64 per cent of Danish households. That is a form of intermediate technology that we can develop along with new forms of renewable generation.

That is an interesting question on innovation. I often ask myself why we have lower levels and what is different in this country. One key issue in Scotland is the lack of economic powers, which means a consolidation of ownership elsewhere that creates that predisposition, but there is perhaps also a wider British industrial malaise vis-à-vis research and development, the value of which is not properly understood.

In fact, there is perhaps a failure to pick up—I will indulge Gavin Brown here—on the Deming approach of continuous improvement, continuous focus on what the customer wants and being hard wired to an innovative mindset. If we stick with what we have got, that is stasis, and stasis will see other people going past us. If we do not develop, others will. I recognise that and applaud the work of Professor Umit Bititci at the University of Strathclyde, who is bringing that into play through an organisation called the Strathclyde institute for operations management.

The advantages that we can gain from our involvement in the North Sea oil industry have been a repeated theme in every speech that I have made to an oil and gas audience over the past two years, and it is beginning to get real traction. When I was at the offshore technology conference in Houston, Texas, I found that the delegates from Scotland were very receptive to it. It was particularly heartwarming to go to the all energy conference last week and find that people are migrating and diversifying from an oil and gas expertise base. The appetite to do that is material, and it can and will only grow. Those people have considerable expertise, and they realise that cause and effect has given them an industry that will survive beyond the life of hydrocarbons in the North Sea, which is exactly what we want from renewables.

I think that the penny is dropping on district heating, and it will feature in what we are doing on renewable heat. Lessons are being learned, and I noticed an example in my constituency recently. A district heating system in Lochgilphead had been less than wonderful because the insulation on the pipes from the boiler house to the homes was less than wonderfully efficient. That lesson has been learned in other installations in Argyll and Bute, which now have things right. We are in an evolutionary process, but some of the low-hanging fruit associated with our major generating stations must be addressed.

Christopher Harvie mentioned renewable heat. One plan under the energy efficiency action plan is to address non-renewable heat, because it is clear that we do not take advantage of waste heat as we should do. We need to do more about that, but we must recognise that it will be a long and difficult task to change the process. Our country had cheap coal and everybody had coal fires, and then we suddenly moved to having cheap gas, at least for properties that are on the gas grid. As in countries such as the Netherlands, people installed boilers in their houses. That has been the general approach, and it will be difficult to change that. We are not in the same position as Denmark, which went down a different road.

Nevertheless, there are some good examples of joint working, such as the combined heat and power systems in tower blocks in Aberdeen and the opportunities through the new sustainable Glasgow project. Trying to change the process overall is an important way of demonstrating that we are moving towards a more energy efficient future.

In the section of your supplementary evidence on new coal-fired power stations, you state:

"As a general principle, the Scottish Government considers that new generating plant should be sited adjacent to existing thermal power stations, where it can make use of existing supporting infrastructure."

Should you not also make it a principle that new generating plant should be situated where the waste heat can be used effectively and efficiently?

I think that that almost applies.

It does not apply at the moment. None of the existing thermal power stations has a district heating scheme attached to it, and some of the stations are quite distant from major urban centres. They are not unsuitable for it, but they are not in the best locations for making best use of district heating.

You can expect that to be covered in the guidance.

We know from our Danish experience that the Danish heat grid can be up to 60 or 70km away from where the heat is generated—the heat pipes are very efficient. It is not beyond the bounds of possibility that, with adaptation, Longannet could supply places as distant as Glasgow.

On a more general point, I often read supposedly optimistic articles in the papers that fill me with dread, in which a supermarket company announces that its new supermarket is 70 per cent more heat efficient than its existing supermarkets. It is when one glances round all the existing supermarkets and watches them simultaneously freezing and warming themselves, with a minimal degree of insulation, that one realises that that, in combination with the total road orientation of delivery and purchase, means that a revolution has been going on in Scotland over the past 20 years that is totally negative as far as conservation is concerned. We therefore need audits and improvements in retail to give us a much more conservationist type of operation.

Another chilling point came up at last week's committee meeting when the housing associations were asked whether they would be interested in new-build property in Britain that could not be let. They said, "Not on your life. The stuff just does not reach the standards that we would want." That was one of the most chilling reflections on the housing boom in Britain. Again, we need an audit of what can be done to improve such buildings so that they are not only modern but bearable.

I believe that you can expect what you seek from the on-going work of the Carbon Trust, which will be supported by the provisions of the Climate Change (Scotland) Bill. That would have been more evident to you if you had joined me yesterday at the new energy technology centre in East Kilbride, which is funded by Interreg money. The plan is to take over what is largely a 1950s campus, with many 1950s buildings that are worse even than those that you described a moment ago, in order to test the spectrum of technology for energy efficiency. The centre will assess new forms of bricks with energy-efficiency elements and the use of air-source heat pumps, solar energy and so on, in order to improve the fabric of the buildings.

There was a great turnout of people yesterday at the meeting at the East Kilbride centre: there must have been 60 or 70 in the room who were committed to contributing to the process. Meanwhile, at the other end of the equation, Marks and Spencer is trying to hone its corporate social responsibility by seeking to move its premises to an energy neutral position.

Members want to come in, but I will ask a couple of questions first. I want to explore a bit more the purpose of the energy advisory board and the advisory themed groups. They were announced during our previous meeting with the minister, so we did not have a chance to consider them in depth. However, at that meeting Lewis Macdonald raised the absence from the board of a couple of key sectors: the nuclear industry and, more significant, energy efficiency people. The board seems to be made up primarily of people with an interest in production rather than in reducing consumption. What role does the advisory board have in driving forward measures for energy efficiency and reducing consumption?

It has a comprehensive role. In the speeches on the issue that we have made over the past year, we have increasingly highlighted energy efficiency as the low-hanging fruit that allows us to get to where we want to be on the overall climate change issue and Scotland's competitiveness. When I gave evidence to the committee on 13 May, I may have eclipsed the role of Ian Marchant of Scottish and Southern Energy as probably the one person on the board whom I believe will do the most effective job on energy efficiency, because he has a strong vested interest in doing so. He regards energy efficiency as a key, added string to his company's bow. I suspect that Scottish Power's board will take the same generic approach. We are now beginning to see an approach that considers the totality of energy and regards generation, distribution and energy efficiency as parts of the whole. I expect Nick Horler of Scottish Power and Ian Marchant to play as big a role in that approach as anyone.

Will you explain the themed groups' link with the advisory board? To what extent are they subordinate to the board, in the sense that they will take instructions from and report to the board, or is each group self-standing, as FREDS is, with a link that does not necessarily involve a subordinate role?

To view their role as subordinate or to have an excessive focus on processes is not entirely helpful. The groups are, essentially, entities that will, from the bottom up, feed into the advisory board and give it the additional focus on specific areas that would be harder to achieve in that macro forum. We are involved in trying to bring things together, in a very collegiate spirit, to ensure that, at the advisory board level, Scotland gets the best possible overview of energy in relation to our overall competitiveness and economic development.

I raise the issue because, although FREDS has obviously been a very successful innovation, I am concerned to ensure that we do not end up with a bureaucratic system in which the work that it does is slowed down because it has to go through reporting processes and so on. Will the themed groups be able to carry on their work while reporting into and informing the advisory board? Will they be able to take forward their own initiatives without having to wait for permission from the advisory board?

We are all working to the same worthy goals: ensuring security of supply and optimisation of energy in Scotland; ensuring Scotland's competitiveness; and having the quality of life and level of economic development that allow more people to be in work, using energy and paying their bills—the whole totality of it. We are looking to have energy as a key platform in Scotland's overall competitiveness and wellbeing.

As an illustration, it is perhaps worth adding that the thermal generation and carbon capture and storage group and the oil and gas advisory group will work very closely with Scottish Enterprise, which will provide the secretariat and will work very closely with them in its industry-related roles. Last week, David Rennie discussed with Brian Nixon from Scottish Enterprise how the system will work.

Brian Nixon and I discussed, first, the formation of the thermal generation group and, in particular, the oil and gas group. Membership is still being clarified, but there will be an obvious linkage between the three sub-groups and the main advisory board. In some cases, members of the sub-groups will also be represented on the advisory board. That will enable communication, discussion and the feeding through of papers, requests for information and so on. We hope that the first meeting of the oil and gas group will take place within the next few months. Brian Nixon is taking the lead on that, but we are working closely with him.

The creation of the Scottish energy advisory board is a welcome development. The minister talked about how it will look at the totality of issues. I am therefore puzzled as to why we are setting up a completely separate programme board on energy efficiency, which is not a themed group and does not report into the Scottish energy advisory board. Why is that the case?

That board has been set up because of the volume of work that has to be done and the level of detail that has to be covered, and because it provides the opportunity to bring in people who are particularly knowledgeable about those areas and can take them forward to the right level in a proper way.

I can think of nobody more high powered than the First Minister, Jim McDonald, who is our foremost academic in the area, Nick Horler and Ian Marchant, who are the chief executives of their respective corporations, and Brian Nixon at Scottish Enterprise. They all sit on the Scottish energy advisory board, but we are to have a separate programme board on energy efficiency that will be denied the expertise of those individuals. I know that the minister is a keen student of the international marketplace in ideas. He would have seen the new energy secretary in the United States—a Nobel prize-winner—saying last night that energy efficiency should be the number 1 priority. The minister has set up a body that he says looks at the totality of the issues but he has shoved energy efficiency off into a wee group on its own. It is unlikely that any of those individuals—Jim McDonald, the First Minister, Nick Horler, Ian Marchant or Brian Nixon—will be asked to sit on both bodies. Even if they were, why is energy efficiency not an integral part of the Scottish energy advisory board's work? Will the minister reconsider the wisdom of putting energy efficiency into a group on its own, given the risk that it will become a Cinderella subject? I do not expect an answer now, but the issue merits reflection.

We have given it considerable reflection. I get the feeling that if we had gone for one big consolidated entity that met much more frequently than could possibly be sustained, we would be nailed for that, too.

In essence, we have a terrific group of people on the advisory board and in the themed groups who are committed to making things better in Scotland. We should applaud them all for their time and effort in taking part.

I agree whole-heartedly, but that does not answer my question. Why is there not a themed group for energy efficiency? Why is energy efficiency not part of the energy advisory board's work?

Energy efficiency is in the bone marrow of every single element of the process. Colin Imrie might want to add to that.

It is not mentioned in the remit or the terms of reference in your supplementary evidence, and you have now set up a parallel body. Why?

The programme board will work within the Scottish Government and will involve the public sector. Its job will be to drive forward the preparation of the action plan. The consultation document will be published in the summer and brought to the main advisory board when it meets again in the autumn, which will be a major opportunity to bring in the external stakeholders.

It is helpful that you have clarified that the programme board will work within the Government. However, that still leaves the fact that the US energy secretary and many others say that energy efficiency is our greatest challenge in the energy sector, and yet there will not be a themed group to examine the issue as part of the all-Scotland stakeholders organisation. I wonder whether the issue merits further reflection, given the universal impression that the Government has given experts in the field that energy efficiency is a Cinderella subject.

Energy efficiency is covered in annex D to the supplementary evidence.

Will the minister consider making it a themed group?

The committee might wish to reflect on that in its report—and the minister might wish to reflect on it, too, following the points that have been made.

We will certainly reflect on the vehemence with which the subject has been mentioned, but I reiterate that we agree with the view from the US that energy efficiency is up there as the number 1 issue. It is low-hanging fruit on which we can make big progress; that view is reflected in pretty much every public statement that we have made on the issue during the past two years.

I will pick up a couple of points. Can anyone explain what is meant by the paragraph in the supplementary evidence that states:

"Each themed group will be chaired jointly by the Minister and an Industry member. For instances when the Minister is not able to make a meeting, the appointed industry member will stand in. The Chair and Deputy Chair will rotate bi-annually. The chairs and co-chairs of these groups will also be members of the strategic steering group".

It mentions co-chairs, chairs, deputy chairs and rotating chairs. That does not seem to make any sense. Who exactly will chair—or co-chair—the groups?

I have a pretty good track record of turning up for FREDS, but we discovered early on that there was a positive benefit in bringing in as a co-chair someone who was steeped in the issues full time. The experience of working with Jason Ormiston as my co-chair on FREDS has been really good. I come from a tradition that says that experts are usually the people who do the work, and given Jason's background the co-chairing aspect has worked well.

I think that that approach will work in this case, too, but I commit to making myself available because it is an important learning exercise. We have developed the way in which we run the sessions to help elevate the process and ensure that we get a genuine flow of ideas.

I have no problem with the groups having co-chairs; I am simply concerned that the paragraph that relates to chairs, co-chairs and deputy chairs is a bit confusing and perhaps needs to be clarified.

On a slightly more serious point, will the thermal generation and carbon capture and storage group examine, as part of its task or theme, the issues of waste heat and district heating schemes? Will it also look at issues such as energy from waste and CHP plants?

Absolutely, on both counts.

Is energy from waste allied to district heating an integral part of the Government's plans for Scotland's energy future?

When I was at the all energy conference last week, I was impressed by the progress that the Austrians are making on the use of waste. We have material plans on the renewable heat side.

Energy from waste will form part of the renewable heat action plan; we are looking for a really strong contribution from our waste policy colleagues on the issue. There is a cap on the contribution of energy from municipal solid waste—members probably know that 25 per cent of MSW can go towards energy. There is much more that can be done in the commercial and industrial sector. We need to look closely at that area, as we can get a lot out of it in the future. Energy from waste is a key part of renewables targets.

What is the logic of the cap?

You must put that question to waste colleagues. I think that it relates to the waste hierarchy. It is more efficient, in waste efficiency terms, to begin with recycling and so on and to go last to energy from waste.

I have no problem with that, but I am not entirely sure that I see the logic of having a cap on the amount of energy that can be generated from waste.

It is to ensure that the other mechanisms are used first.

I do not think that there is a logic to that. If we have done everything that we can to reduce, reuse and recycle—the hierarchy should ensure that that happens—why should we be able to use only a certain amount of what is left for energy? About 50 per cent of waste, on average, cannot be reused or recycled. It makes no sense to set a cap of 25 per cent. Should we not have a restriction on what can be sent to landfill? In Denmark, nothing that can be reused, recycled or combusted can be sent to landfill.

A ban on sending biomass to landfill is being considered.

The issue of planning gain and whether community benefit can be considered alongside applications was raised earlier. Energy from waste and planning gain are examples of issues where there has been a fairly narrow focus by distinct policy areas across the public sector and in government. In the current climate, we are trying to push at the boundaries and to identify obstacles. As Sue Kearns said, we want to open up conversations and to look at changing policy in areas that are closely linked but peripheral to our key policy. Much of our work is focused on that.

I seek total clarity on the Government's position on carbon capture and storage from coal or gas-fired power plants. The supplementary evidence refers to

"the aim of decarbonising the electricity generation sector by 2030."

Is it a reasonable assumption that the Government's position is that it will allow new coal-fired power stations that do not have carbon capture operating at the time of build, provided that it is in place by 2030?

You should wait until we produce the guidance, once we have assimilated the views that are expressed in response to the consultation and taken on board the UK Government's policy statements on the matter. It is too early to reach the conclusion that you have set out.

What is the timescale for publication of the guidance?

We plan to produce it during the summer.

Do you expect any carbon capture and storage plants to be operational in Scotland by 2015?

We are hopeful that we will do well in the demonstrator competition. The proposals that have been submitted for Scotland make a compelling case. There is huge competence at the Scottish carbon capture and storage centre, especially in the person of Stuart Hazeldine, who is a stellar figure. When we took him to Norway to discuss the issue, we got an enormous amount of interest, as we did when we took him to Brussels.

There is an awareness that carbon capture and storage is particularly suited to Scotland, as we have the appropriate geology and infrastructure in the North Sea. There is potential to involve the method in enhanced oil recovery and to have a grid in Scotland that could serve carbon capture facilities throughout Europe. Those points have been well raised and have attracted interest from Europe.

The UK Government announced at the end of April that it plans to consult during the summer on a proposed levy or feed-in tariff to support up to four demonstrators throughout the UK. We have been working closely with the UK Government on that. The Scottish Government has responsibilities for the issue in relation to regulation and the way in which such money would be spent. Scotland has real opportunities to play a key role in the UK demonstrator competition and more widely. The UK Government plans to consult on the issue over the summer, in partnership with the Scottish Government.

It is worth mentioning "Opportunities for CO2 Storage around Scotland—an integrated strategic research study", which the First Minister launched on 1 May. We have the interest of the EU, whose overall economic recovery plan seeks to support carbon capture and storage projects. We are considering what we can do on that.

At the time of the CCS report launch, the First Minister gave a commitment to publish a road-map on CCS. That will involve a range of partners. One good thing that came out of the research project and report to which the minister referred was that 19 organisations were involved, which shows the breadth of expertise and interest in Scotland. We are seeking to build on that so that we do not just have a report, full stop. Discussions are taking place between various individuals and partners in those 19 organisations about what happens next, how they want to be involved in the road-map and how they want to progress.

There is a particular opportunity through the EU economic recovery programme to make progress with practical projects that could lead the way in Europe, whether on storage or demonstration. Those are being worked on. We hope that ideas will be produced in the next week or two.

In evidence that we heard on fuel poverty during our inquiry, it was suggested that investment of £1 billion to £1.2 billion is required to meet our fuel poverty targets. That amounts to about £100 million a year in area-based energy efficiency schemes. Is there any prospect of the Scottish Government including sums of that order in future budgets to meet the fuel poverty targets and to contribute to meeting climate change targets?

We continue to fund the Carbon Trust and the Energy Saving Trust. We are also working on the energy assistance package, which is supported by £60 million of Scottish Government funding and by carbon emissions reduction target—CERT—funding from the energy companies. A lot is happening and, as we come through the economic challenge that we face, I hope that we will be able to do more. We will consider that at the time. We will also seek to have a more effective economy that gets more people into work and takes more people out of the fuel poverty net through the vehicle of their having fulfilling and productive lives in the workplace.

At the all energy conference last week, I met representatives of several enterprising companies that are involved in heat, including ones that are considering the use of biomass to produce heat. The minister will be aware that the project involving Aberdeen City Council and the Aberdeen Heat and Power Company is a good model, but that other local authorities have not yet been able to replicate it. As Colin Imrie suggested, in part, that might be because of the existing infrastructure in other places.

However, one of the things that Aberdeen Heat and Power brought to our attention when we met it was that, in Scotland, the parts of our district heating systems or combined heat and power systems that are subject to business rates are more extensive than they are south of the border. For example, pipes that lead into people's homes, to which the minister referred in relation to Lochgilphead, are subject to business rates in the high-rise blocks in Aberdeen, and I presume that that will also apply if such projects are developed in Glasgow. However, that is not the case south of the border. Does the minister think that Government can address that?

In my experience, when you get individuals together to discuss trying to optimise a locality and get better results for people, they tend to change their position. I am always keen to try to get as many people in the room at one time as possible to have that debate. I offer an Aberdonian example: when the Food Standards Agency came to engage on aquaculture, it came into the room determined to protect public health, full stop. That was its limited vision at the time, but it left the room three hours later wanting to help the industry produce more safe, healthy, nutritious food in order to protect public health.

When there are potential constraints and difficulties, let us try to broker a meeting at which we get the two sides of the equation in the room. When we have successes, such as the one in Aberdeen, let us find ways to broadcast them in a climate in which other people are broadcasting their successes, from which Aberdeen might learn.

Can I take it from what you say that ministers would be prepared to consider the issue?

We are prepared to broker the debate because when you get reasonable people in a room with a unifying goal—for example, making Aberdeen as compelling a place to live and work in as possible—all things are possible.

I appreciate that you have to leave shortly, but I have a final, brief question. In response to a written question, your colleague Stewart Stevenson told me that a study on whether air-source heat pumps should have permitted development rights is out to tender. The study will cost around £25,000 to £30,000, and the decision is to be made towards the end of the year. Do you not think that it would be better value for public money to spend £25 on sending ministers and a couple of officials to Mitsubishi to look at its heat pump?

Who is to say that both things are not happening?

Okay. On that note, I thank you and your team very much for your evidence. I am sure that you will look forward to our report.

As this is the end of the information and evidence gathering for the energy inquiry, I place on record the committee's appreciation of everyone who has given oral or written evidence and those who have facilitated any of our fact-finding visits during our extensive inquiry. We have gathered a huge body of information, and over the next couple of weeks we will craft a report that I am sure will be challenging and valuable. We look forward to publishing the report some time in June and to the Government's ultimate response to it.

That brings us to the end—

Before we close, may I ask whether we will receive a paper from the clerks on a banking inquiry?

If you will allow me to complete my business, I will tell you what is happening.

We will see the minister next week in connection with the Arbitration (Scotland) Bill—I am sure that he is mugging up on it, as we are. We look forward to that. Next week, we will also discuss our future work programme, when the subject of banking will come up. That concludes today's business.

Meeting closed at 13:04.