Meeting of the Parliament

Meeting date: Wednesday, November 2, 2022

Official Report 1110KB pdf

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Western Isles Interconnector

The final item of business is a members’ business debate on motion S6M-06111, in the name of Alasdair Allan, on a Western Isles interconnector. The debate will be concluded without any question being put.

Motion debated,

That the Parliament welcomes the recent National Grid Electricity System Operator report, Pathway to 2030 Holistic Network Design, and the inclusion of a new 1.8GW interconnector to connect the Western Isles, which has been assessed as “required” to deliver 2030 offshore wind targets; understands that this new link is expected to have sufficient capacity to accommodate all known onshore wind contracted to connect in the Western Isles as well as the two ScotWind sites in closest proximity to the islands; welcomes the transformational economic impacts that investment in renewables and grid infrastructure will reportedly have on the Western Isles and Scottish economies; recognises what it sees as the significant contribution this investment will make towards net zero targets and securing Scotland’s future energy independence and energy security; notes with concern that the new link was not included in the energy regulator, Ofgem’s, recent consultation on accelerating onshore electricity transmission investment, and notes calls for Ofgem to ensure this new link is included in its final list of projects approved for accelerated investment, which is due to be published before the end of 2022.

18:03  

I thank members who signed the motion for the debate. I appreciate that, at first glance, this topic may appear to be niche or islands-centric. If it is, I offer little by way of apology for that. Whether the Western Isles interconnector goes ahead will, in fact, have a profound impact on Scotland’s ability to reach net zero and to play our part in the global fight against climate change.

I recognise the wide array of support that the project attracts. Locally, it is an issue that has the backing of the member of the United Kingdom Parliament, the MSP and the local authority, and the Scottish Government has played an important role over the years in trying to move the project on. All the parties that are represented in the chamber can justifiably claim to have played a role in supporting it, so I very much hope that we hear some of that support tonight.

Most important is that the need for the interconnector is recognised and accepted by the communities that I represent. The lighthouse at the Butt of Lewis has a mention in the Guinness books of world records for being the windiest place in the United Kingdom, and for generations, the wind in Scotland was something to be endured rather than harnessed. Now, with the renewables revolution, we have a huge development opportunity right on our doorstep. Renewables developments are capable of bringing to the islands substantial socioeconomic benefits, which we desperately need.

The islands that I represent are, by and large, economically fragile. The industries on which we have traditionally relied, including textiles, fishing and crofting, have faced challenges in recent decades. The public sector is by far the largest employer, which leaves us vulnerable through prolonged periods of UK austerity such as we are living through now. The greatest challenge that we face in the coming years is in tackling the dual problems of depopulation and having an ageing population.

The construction of a transmission link would unlock hundreds of millions of pounds’ worth of investment from shovel-ready renewables projects across the islands. It is anticipated that a sizeable number of jobs and millions of pounds’ worth of contracts for the local economy would be created during the construction phase. The community benefit funds that developers have pledged to establish would also bring in much-needed revenue.

It is worth noting that the Western Isles are at the forefront of Scotland’s drive to empower communities and to enable them to make decisions about their own areas. Community-owned land covers nearly half the land area and contains 70 per cent of our population. Community trusts have a key part to play in building stronger and more sustainable communities, and many have done so by establishing their own renewables projects. Indeed, community energy in the Western Isles has thrived. Substantial sums of money are brought directly into the community every year for important projects that deal with issues such as fuel poverty, housing, employment and additional community services.

There is, therefore, a real need for an interconnector. The history of the project stretches back over nearly two decades. There is—members will be glad to know—not enough time tonight for me to cover the whole story, but there have been many false dawns and broken promises. When there has been progress, it has felt painfully slow, and a step forward has always seemed to precede at least one step back.

In recent years, with the Scottish Government’s support, it has felt like momentum has built on the issue and it has been going in the right direction. In 2017, the UK Government reintroduced support for remote island wind, and 400MW of onshore wind in the Western Isles secured support through the contracts for difference auctions in the 2019 and 2022 rounds. However, in 2019, the Office of Gas and Electricity Markets rejected a Scottish and Southern Electricity Networks proposal for a 600MW link, and instead proposed a smaller 450MW connection that would have made projects unviable for developers. For the sake of a cost difference of less than 5 per cent, the larger link was rejected.

The need for enhanced grid infrastructure for the ScotWind offshore developments has breathed new life into the case for the interconnector. SSEN has been developing plans for a substantially bigger 1.8GW link, which would have sufficient capacity to accommodate all currently contracted onshore wind sites in the Western Isles and offshore wind in proximity to the Western Isles, with additional headroom for—I hope—future projects.

All that brings us to the latest point in the saga, and the real reason for tonight’s debate. In August, Ofgem consulted on how it could support accelerated delivery of the strategic electricity transmission network upgrades that are needed to meet the UK Government’s 2030 renewable electricity generation ambitions. Despite the 1.8GW transmission link meeting all the criteria, it was omitted from the consultation document’s list of projects, which means that investment in the project continues to be stalled.

I believe that this project is of national significance, that the Western Isles have an enormous role to play in Scotland’s renewables landscape in the coming decades and that the Western Isles transmission link is urgently needed in order to unlock that potential. However, I do not believe that those who have the power to do the unlocking—Ofgem and the UK Government—have treated the issue accordingly. Ofgem has a chance to change that by ensuring that the Western Isles transmission link is included in its final list of projects that are approved for accelerated investment, which is to be published at the end of this year. I hope that members will join me in calling on Ofgem to do just that.

18:09  

My colleague Alasdair Allan has my complete support in seeking a new interconnector for the Western Isles, which is one of many actions that Ofgem needs to take, but is not yet taking, in order to serve our constituents to even the most minimal standard. I appreciate his comments about the perception that it is a niche issue, but he and I both know that the situation is one of many indications of an ever-present and increasingly serious issue that has far-reaching consequences.

Since I was elected last May, I have spent a considerable amount of my time feeling concerned and frustrated by failures in UK energy policy. There is massive potential in my region—all sorts of potential, although I am, this evening, referring specifically to renewable energy potential—but UK energy policy continues to disadvantage the Highlands and Islands. It penalises us for providing clean green energy to the rest of the country, and it charges us more for the energy that we use, with Ofgem even implementing as-yet-unexplained higher standing charges for my constituents. If the goal is to tackle climate change, it does not make sense to leave our islands behind.

My region is leading the way in innovation and in finding community solutions to energy concerns. Earlier this year, I was honoured to host the University of the Highlands and Islands in the Parliament for an event about the research in energy that is being done in the university. Development of our region, which is rich in national resources, for the better requires being up close and familiar with it, and it requires real understanding of what its potential means to our people personally, as well as an understanding of how policy will ensure—or jeopardise—the continued existence of rural and island communities. It is hard to overstate the importance of a university that has skin in the game taking the lead on bringing us into a future in which we can lead—not only in Scotland, but globally—on tidal, wind and wave energy technologies.

Our unique environment deserves nothing less than people who are not only willing, but excited, to research where the resource is. That knowledge can then be shared. As we have seen from the international interest in the UHI’s work, people around the world are screaming out for the lessons that only the Highlands and Islands can teach.

My constituents often raise with me the unfairness of their being surrounded by green energy development while they face insurmountable fuel bills and are forced into poverty or away from their homes. It is a fair question, and it is another question that UHI research will be key to answering, if and when the powers that are needed to make changes to energy policy are given to Scotland. Investigations into how communities perceive renewables projects, and exploration of the community benefit that could be gained through local projects, will provide the fundamentals to ensure that we can build a system that means that the benefit of the work that is done, and of the energy that is generated in the region, is felt within the region.

As the Scottish National Party MP Stephen Flynn has said, we have the energy; we need the power. It is unforgivable that the Tory UK Government is preventing us from reaching our massive potential, and is instead frequently leaving many of my constituents in fuel poverty. We need powers over energy policy and full powers over social security in Scotland, but it is pretty clear that the UK Government does not want to give us those powers, so we need independence.

18:12  

I refer members to my entry in respect of renewable energy in my register of interests. I apologise for having to leave the debate early this evening.

I welcome the opportunity to contribute to the debate. I put on the record my continued support for the Western Isles’ bid to secure a subsea interconnector cable, and I thank Alasdair Allan for bringing the debate to the chamber. I am always keen to take part in niche islands debates, and this is one of them.

Having made representations on the issue in one form or another since I was first elected in 2016, I know that—as Alasdair Allan said—there is widespread support for an interconnector, and I acknowledge the cross-party support that he mentioned. I share his frustrations that we are still talking about the interconnector, rather than seeing its delivery. It is, as he described it, a “saga”.

It was deeply disappointing when Ofgem rejected the initial proposal for a 600MW transmission link back in 2019. That said, I welcome the fact that the latest proposal would treble the capacity of the link to 1.8GW, and that National Grid Electricity System Operator’s “Pathway to 2030 Holistic Network Design” report has assessed the project as “essential” and “required” to deliver 2030 offshore wind targets. In April, the UK Government announced a boost to the UK’s previous target to deliver up to 40GW of offshore wind, by increasing it to delivery of 50GW by 2030.

Those are positive developments, but I also acknowledge that Ofgem is, once again, the issue, as it failed to include the proposals in its recent consultation on accelerating onshore electricity transmission investment. Ofgem is independent of the UK Government, and I believe that it is Ofgem, and not the UK Government, that is the object of frustration. It is very regrettable that Ofgem rejected the proposal in 2019.

As Alasdair Allan mentioned, there was a specific manifesto commitment from my party in 2017 to

“support the development of wind projects in the remote islands of Scotland, where they will directly benefit local communities.”

Given the current cost of living crisis, fluctuations in the global energy market and the on-going instability in Russia and elsewhere, it is imperative that we in Scotland and the United Kingdom continue the drive towards energy independence. Projects such as the 1.8GW transmission link to the Western Isles will unlock significant grid capacity, as well as reducing our reliance on fossil fuels for energy.

Crucially, any new wind project, whether onshore or offshore, must have community backing and result in long-standing benefits for people who live in the Western Isles. The various local groups that I have spoken to during visits to the Western Isles over the years have consistently emphasised that point.

In saying that, I know that support for an interconnector and the wind projects that come with that is not universal—it would be wrong not to acknowledge that. There are differences of opinion within crofting communities about the structure and arrangement of community benefits from renewable energy, and we must recognise those. That is why I believe that, as we seek to harness the untapped energy that the Western Isles can provide, people on the ground must see the benefits through greater investment in local infrastructure and community projects.

We all agree that there is a robust case for a new 1.8GW interconnector to connect the Western Isles. We, alongside community representatives, must make that case to Ofgem in order to realise that long-standing ambition. I call on Ofgem to include the bid in its final list of projects for accelerated investment, because of the benefits that it will bring to the Western Isles, to Scotland and to the whole of the United Kingdom.

18:16  

As niche debates go, this one is probably about as niche as it could be. I say that as a member for South Scotland and because I am giving this speech on behalf of my colleague Rhoda Grant, who cannot be here although she wanted to be.

I congratulate Alasdair Allan on securing the debate. It has long been recognised that the Western Isles have the ability to be a national source of renewable energy: weather patterns make that so. However, we have been unable to source that energy because of grid restrictions. Ofgem wasted time arguing that Scottish Hydro Electric Transmission Ltd’s proposed interconnector was too large for what was required, and would only consent to an interconnector of any capacity if it had already received planning permission. Ofgem refused to listen to arguments showing that, if the interconnector was built with spare capacity, that capacity would be snapped up.

The islands are made up of a large number of community-owned estates, which cannot afford to tie up capital for years in projects that might never come off. Therefore, their renewable energy ambitions are not yet going through the planning process—they cannot do so without the guarantee of transmission. However, if there was capacity in the grid, those groups would build onshore turbines. Those projects are shovel ready.

Ofgem previously insisted on a smaller capacity interconnector, which would have led to no community benefit. While that argument was going on, the ScotWind leasing process took place, resulting in the leasing of areas west of the islands for offshore wind. Now, suddenly, there is another delay, because the proposed interconnector is deemed to be not big enough. There is frustration. Ofgem has been told all this before, but it would not listen, and we now face further delays and increasing costs.

Meanwhile, the islands’ community-owned estates are being starved of much-needed income. Imagine what that investment would bring. It would transform those economies, but, yet again, it appears that Ofgem acts only in the interests of multinational energy companies and not in the interests of the people who live and work on the islands.

I welcome the commitment to a future-proofed interconnector, but regret that it has taken so long and that there has been so much delay. It is disappointing that the proposal is not included in the Ofgem accelerated strategic transmission investment framework. It is the only link in the National Grid ESO’s holistic network design that has not been included. It is therefore critical for Ofgem to change its position and ensure that the 1.8GW Western Isles link is included in its decision on the ASTI framework, which is due by the end of this year.

We saw what happened when the subsea cable from Skye failed: islands became dependent on diesel generators for electricity. That is frustrating because our islands have the ability to remove carbon from the grid for everyone.

I urge the Scottish Government to make every effort to progress this interconnector.

18:20  

I refer members to my entry in the register of members’ interests, as I am in receipt of the feed-in tariff and renewable heat incentive. I pass on my best wishes to my friend and our colleague Rhoda Grant.

I thank Alasdair Allan for lodging the motion; he knows that I stand shoulder to shoulder with him on bringing any and all island issues to the chamber—the more niche the better. However, we are due a wrestle to the death over whether Orkney or the Western Isles are the windiest of our islands.

The issue of interconnectors to our islands has been around for some time. I agreed to speak in the debate with some trepidation, because the delivery of an interconnector has been seen as, “The Western Isles’ gain might be Orkney or Shetland’s pain.” We are beyond that now—as Alasdair Allan said, it is patently obvious that it will require all our islands to meet their full potential in the delivery of renewables if we are to achieve our renewables and net zero targets.

The story that we have heard about the Western Isles interconnector is reflected in the story that surrounds the attempts to get an interconnector to Orkney. In 2019, the needs case for a 220kW link was made, which Ofgem accepted, but only subject to some arbitrary and pretty excessive conditions. Despite the cost benefit analysis from Scottish and Southern Electricity Networks, which indicated that projects generating around 70MW or 80MW were required in order to justify that sort of investment, Ofgem came back with a figure of around 135MW, which seems excessive.

Ofgem’s timetable also seemed far tighter and more stringent than was necessary. That timetable has been elongated a bit, largely due to the restrictions imposed by Covid. However, it does not suggest an approach that encourages the development of renewables in our islands.

The Parliament takes pride, quite rightly, in our world-leading legislation on climate change, although we are all seized of the fact that the delivery of the legislation will be far more difficult than the passing of it. The fulfilling of our renewables potential can only be achieved through our islands being able to play their full part, which will require interconnectors, regardless of what happens in relation to storage and the development of other technologies.

It is largely Ofgem, rather than the UK Government, that needs to reflect far more. There are indeed issues of energy cost for consumers and around the security of supply. However, the project is also integral to achieving our net zero targets, and Ofgem’s approach to that balance of statutory duties needs a bit of a refresh.

I caution Emma Roddick on drawing this into a debate around the constitution. I do not think that the break-up of the UK or the fragmentation of the energy market—not something that anybody in the energy sector is really arguing for—would help. There is cross-party support for the delivery of interconnectors, not just to the Western Isles but to all our islands, so that we can achieve our net zero targets and allow our islands to fulfil their potential.

I commit to playing my part in the continuation of that cross-party consensus on the issue, and I look forward to hearing what the minister has to say.

I call Patrick Harvie to respond on behalf of the Scottish Government.

18:24  

Even if it is a niche debate, it is an extremely important niche. Not everyone is drawn to the slightly more technical aspects of such an issue, but the realisation of the project to which Alasdair Allan has drawn our attention will benefit huge numbers of people across Scotland, in particular in communities such as those that he represents.

Scotland has a long and positive history of harnessing renewable energy, and our capacity to generate it will have to increase to meet our climate change targets. Increased electrification and deployment of renewables to meet expected growth in demand will require significant investment in our electricity infrastructure, in order to maintain resilience and increase transfer capability between Scotland and the rest of the Great Britain market, as well as to meet our own increased needs.

As Liam McArthur says, our island communities, including those that Alasdair Allan represents, have a critical role to play in that, so of course we welcome the inclusion in National Grid ESO’s report, “Pathway to 2030—Holistic Network Design” of a new 1.8GW transmission line to connect the Western Isles. Alasdair Allan, in bringing the motion to the chamber, is quite right to highlight—as other members have done—that expectations are now on Ofgem to ensure that the project goes ahead.

The proposed line will accommodate the renewable energy generated from all known onshore and offshore wind in and around the Western Isles. That is a significant and important step, which will be key to enabling Scotland’s transition to net zero, as well as supporting long-term energy security.

We are well on the road to fully decarbonising our electricity system in Scotland, but it is vital that we continue to work together to enable all of those critical investments, while making sure that regulatory levers continue to drive down costs and increase benefits for energy customers as well as communities.

We must not repeat the mistakes of the past. We must ensure a managed and fair transition to net zero. That is why we will work collaboratively with the regulator, the UK Government and communities and industry to secure that just transition and harness opportunities across all sectors to build a better and more equal Scotland. However, we can do that only if the necessary infrastructure is in place to meet our growing renewable energy generating capacity.

As we move towards a net zero society, the electrification of heat and transport will increase our demand for electricity. It is vital that that demand is met by renewables and flexible solutions, rather than by fossil fuels and nuclear generation. Taking advantage of our extensive offshore wind resource will enable us to do that, but there must be a means to transport that power to where it is needed. Heat in buildings, for example, accounts for 20 per cent of Scotland’s greenhouse gas emissions. The climate change plan envelope for buildings, and our heat in buildings strategy, require more than 1 million on-gas homes to convert to zero emissions heat by the end of this decade, and for emissions from homes and buildings to fall by 68 per cent over the same period.

I visited the Western Isles back in May and heard directly from people there about the challenges of decarbonising homes and buildings on the islands. Changing how we heat our homes and use energy in our homes and buildings is fundamentally about addressing climate change, but it can also strengthen our energy security and, if we get the details right, can represent a stepping stone toward not just a greener but a fairer Scotland for everyone. That is why we have committed to continuing to make our homes more energy efficient and to decarbonise heat, with at least £1.8 billion being made available during the course of this session of Parliament.

Although the Scottish Government does not have the power to mandate community benefits, we expect delivery partners of the transmission link to work with local communities and ensure that they share in the benefits of the project.

Our seas are home to some of the best offshore wind resources in the world, and Scotland’s ambition to capitalise on our offshore wind generation capacity is part of the bold action that we are taking to become a net zero society. I am aware that projects in Scottish waters are at a competitive disadvantage compared to projects further south as a result of the more challenging conditions and the higher transmission costs. We are actively engaged in the offshore transmission network review to consider how the offshore transmission network is designed and delivered here in Scotland.

The decisions and actions that we take now will shape the Scotland that future generations live and work in. Recognising the undeniable benefits to our economy, the Scottish Government has consistently provided a supportive environment for both offshore and onshore wind over the past decade.

The Scottish ministers have made it clear time and again that we will use every lever at our disposal to maximise the wider economic returns for Scotland from the wind sector. ScotWind is the world’s largest commercial leasing round for floating offshore wind and puts Scotland at the forefront of offshore wind development globally. Together with the option fees for the clearing round, ScotWind will deliver more than £700 million in revenues to the public purse for the initial awards alone.

The Scottish ministers are considering how the ScotWind revenue should be invested to maximise the benefits for the people of Scotland. In addition, ScotWind will deliver several billion pounds more in rental revenues when projects become operational. That, too, will be invested for the benefit of the people of Scotland.

I do not want to sound a discordant note but I simply observe that ScotWind appears to be the exception to commitments that the Scottish Government has previously made about the revenues from sea bed assets transferring to local authorities. The financial impact that that is having on communities such as Orkney is significant. I ask the Scottish Government to reflect on that.

I am happy, as I am sure fellow ministers will be, to explore those issues further with Mr McArthur. Far from sounding a discordant note, I hope that all members recognise that ScotWind promises to be transformational in delivering economic supply chain benefits as well as a huge amount of renewable electricity generation.

We welcome the commitment of developers to invest an average of £1.4 billion in Scotland per project. That equates to more than £28 billion across the 20 ScotWind offshore wind projects. The two ScotWind projects that are in close proximity to the Western Isles are no exception. The 1.8GW link marks a major step forward in unlocking the renewable potential of the islands. Although we share the disappointment that has been expressed about the delay to the planned 600MW interconnector, we welcome the news that the interconnector that National Grid ESO now states as being required will be significantly larger than originally planned and will accommodate the energy generated from all known onshore and offshore wind in and around the Western Isles.

The timescale for such multimillion-pound projects has slipped in the past and the Scottish Government will continue to seek assurances that the interconnector will now progress swiftly and without further delay. Final investment will be subject to Ofgem approval and necessary planning consent. As Alasdair Allan did in his opening speech, we continue to call on Ofgem to ensure that the new 1.8GW interconnector is included in its final list of projects approved for accelerated development.

We strongly encourage National Grid ESO to explore all avenues to accelerate the timelines for our other ScotWind projects. We are pleased that it has announced its intention to progress with a transmission entry capacity amnesty, which might help to free up transmission capacity that is being held for some legacy projects that are not progressing.

Scotland’s long and positive association with renewables continues to go from strength to strength. It is central to our green recovery. In 2021, Scotland generated enough renewable electricity to power all households here for almost three years. That is a huge achievement.

We recognise the importance of energy generated in the Western Isles in contributing to the decarbonisation of Scotland’s energy supply and to our just transition towards net zero by 2045. We are pleased that National Grid ESO also recognises its importance and we call on Ofgem to ensure that the new 1.8GW link is included in its final list of projects for accelerated investment so that that vital piece of work can be completed well ahead of our 2030 targets.

Meeting closed at 18:33.