Renewable Heat Action Plan
The next item of business is a statement by Jim Mather on the renewable heat action plan.
On a point of order, Presiding Officer. It is my understanding that ministerial statements are meant to be about announcements of Government policy on matters that are not yet in the public domain or are not substantially in it. The statement that we are about to hear relates to the Scottish renewable heat action plan, which was published on the Government's website on 5 November. I find it a little difficult to understand how that could be considered not to be in the public domain, other than the fact that the Government did not announce it by way of an inspired parliamentary question or provide an advance copy to either of the relevant committees. I seek clarification as to why we are having a ministerial statement about a document that was published two weeks ago.
I will look into that and will provide that clarification—considerably after we have had the statement—at decision time today.
The minister will take questions at the end of the statement. Therefore, there will be no interruptions or interventions during it.
I welcome the opportunity to mark the publication of the Scottish renewable heat action plan. It underpins the Government's commitment to make energy a priority in our economic recovery programme and contributes towards our ambitious, world-leading emissions reduction targets.
Heat in Scotland constitutes some 50 per cent of energy demand. Although the Government has attached great priority to developing Scotland's outstanding renewables potential, renewable heat has still to show its full potential here in Scotland. However, as is evident in our Climate Change (Scotland) Act 2009, the need for transformational change in that area is at the forefront of our minds. We have an ambition to create a completely decarbonised heat sector by 2050, with an interim target of deriving 11 per cent of heat from renewable sources by 2020. The action plan outlines the way in which the Government will begin to develop the sector by working in partnership to achieve a comprehensive delivery infrastructure, a supportive policy and a suitable regulatory framework.
Published in tandem with the action plan, a report by the Sustainable Development Commission Scotland identifies our current and potential renewable heat use. The report includes research that shows that current levels of renewable heat stand at a mere 1.4 per cent of heat usage. Despite that modest base, it also indicates that our target can still be reached and even exceeded. It should be noted that the report will be complemented in due course by further research on Scotland's potential for energy from waste.
Although it is reassuring to know that our ambitions are attainable, we recognise that they present a significant challenge. We must make the changes that have been identified today—changes that use and enhance technology; reform current regulations; and, perhaps most important, require a concerted and collaborative effort throughout Scotland.
The action plan highlights the need to use all available technological options at a range of scales. In the short to medium term, industrial and commercial-scale biomass will be the sector's key driver. In urban areas, there are tremendous opportunities for district heating schemes while, in rural areas that are off the gas grid, individual solutions such as biomass boilers or heat pumps will be particularly important.
I am pleased to say that progress is already under way. Renewable heat is the focus of an industry-chaired sub-group that reports to the main forum for renewable energy development in Scotland—FREDS—which I chair. FREDS brings together key stakeholders in renewable energy to make strategic decisions to develop the sector and was heavily involved in producing Scotland's renewables action plan, which was published in July this year.
The heat sub-group—chaired by Samantha Fuller of Scottish and Southern Energy—has taken enthusiastic and energetic steps to make progress. It has met twice and plans to do so again before the end of the year, developing clusters of expertise among its members to take forward key actions. The group will also ensure that those actions flex, change and evolve in order to maximise progress.
The most recent heat group meeting was held at Mitsubishi's air-source heat pump factory, which is based in Livingston. The plant is a prime example of how Scotland can utilise its outstanding skills base. It is clear that there is now a major opportunity for more people in Scotland to manufacture, install and maintain renewable heat equipment. The action plan ensures that Scotland has the skills in place to support growth in the market. As members might expect, focus has also been given to the funding that is needed to make those changes.
I was delighted to be able to announce further grants from the second round of the Scottish biomass heat scheme earlier this month. The Hill of Banchory district heating development—a pioneering scheme that uses heat from biomass to supply more than 200 homes—is one of 16 projects to share more than £1 million-worth of awards.
I announce that the third round of the Scottish biomass heat scheme is formally open for applications, with a closing date of 12 February 2010. The scheme is competitive and is open to small and medium-sized businesses that wish to install biomass boilers. We are particularly keen to receive applications for district heating schemes. At the same time as launching the third round of the scheme, we want to establish what the demand is for funding for larger-scale projects for district heating schemes and we seek expressions of interest. I will review the potential for continued support in the coming months.
However, we recognise that a greater stimulus to the market is required. From 2011, the United Kingdom Government will introduce a renewable heat incentive across England, Scotland and Wales, which will act as the principal driver to decarbonise the heat sector. Meanwhile, the promotion of renewable heat is a devolved matter. However, members may recall that the Economy, Energy and Tourism Committee agreed last year to the ceding of powers to the UK Parliament to legislate on our behalf in order that Scotland could benefit from the renewable heat incentive. That was necessary as the scheme is to be funded by a levy placed on suppliers of fossil fuels used for heating purposes, which is a reserved matter.
We are in contact with our counterparts at the Department of Energy and Climate Change to discuss the design of the scheme, taking into consideration Scotland's specific needs; the differences in climatic conditions; the number of houses off the gas grid; and the level of fuel poverty in some regions. A public consultation on the incentive is due to be announced before the end of the year, and the Scottish Government will provide a comprehensive response.
Like many others, I want to see this sector take control of its future. Equally, like many others, I know that there are issues to be resolved and problems to face, but I am confident that there are solutions. In early 2010, I propose that we bring together stakeholders from across the industry—from factory manufacturers to installers; from electricity suppliers to community groups; and from people in urban and rural areas—for an event during which we can tap into the aspirations and ideas of such a wide group. It is clear that only through such close relationships and a common goal will we be able to transform and strengthen the sector. The event will take place in Glasgow on 22 February, and I encourage all those who have an interest to ensure that they are involved and present on the day.
Meanwhile, the Government has made clear its intention to pursue an ambitious programme for renewable heat. Through our action plan, we are placing this crucial area rightly in the spotlight, maximising its chances of playing a vital role in addressing climate change and our renewable energy ambitions, and taking advantage of the vast opportunities that exist for renewable energy to drive sustainable growth in Scotland. It is a huge challenge, but the opportunities are huge and the challenges are surmountable. It is vital now that Scotland prepares for a new post-renewable heat incentive, beginning in the area of renewable heat.
As I intimated earlier, the minister will take questions on any issues raised in his statement. We have until just after 3 o'clock for questions. We will take front-bench questions first, starting with Lewis Macdonald.
I thank the minister for the advance copy of his statement and I welcome his announcement today on biomass heat. However, does he not recognise that district heating schemes will be critical in promoting low-carbon heat going forward, whatever the fuel source that is used? The Sustainable Development Commission Scotland report to which he referred, which was released with the action plan, is clear that action to support district heating should be taken forward as part of Government work to stimulate low-carbon heat sources between now and 2020, even though larger urban district schemes are likely to be fuelled in the short term by fossil rather than renewable fuels. Does the minister not agree with the SDC that we need to move now to put in place district heating or combined heat and power schemes, because doing so will make the conversion from fossil fuel heating to renewable heating much simpler in urban areas later on?
The Government's consultation on energy efficiency raises the possibility of financial support for up-front costs or for local councils to establish companies to develop district heating schemes or combined heat and power schemes. This year's UK budget, as the minister knows—I have written to him on the matter—offered Scottish ministers £2 million to do just that. Why has that not been done? Why has that opportunity not been taken? Why does the renewable heat action plan offer no action on that particular front?
The member will find that our emphasis on district heating schemes, and the priority that we place on combined heat and power, is there in what we are doing with renewables obligation certificates. That is where we have put the priority. We are genuinely trying to create a new, open beginning and a situation whereby, in advance of the new market mechanism coming through, which will be material—changing one thing at a time is a sensible way to go—we move forward in as collegiate a way as possible to achieve our goals, which are important. We have a massive issue of fuel poverty, and there is no doubt that district heating schemes could play an enormous part in addressing that.
We need to be open going through this phase. That is why the event on 22 February will be so important. We all have our own ideas, including what might be the truth and the best strategy going forward, but we must be generous and blend in other ideas that are coming forward. I suspect that engagement in the group will produce a similar phenomenon to what has happened in FREDS, whereby sub-groups of interest are beginning to come forward to collaborate and to compete with one another. I hope that we can have representatives of the Economy, Energy and Tourism Committee in the room during the 22 February event, as that will provide a comprehensive help.
This is a new beginning and we are open to all ideas. We want to work together to achieve our goal, because the issue is terribly important for Scotland. In essence, heat accounts for 50 per cent of our energy requirements, so getting the issue right will allow us to make big moves on every front.
I thank the minister for the advance copy of his statement and the—even greater in advance—copy of the renewable heat action plan. I am pleased that renewable heat is the subject of an action plan and ministerial statement.
The minister stated that the Government's target of increasing the amount of heat produced from renewable sources from 1.4 to 11 per cent can be reached and even exceeded. My fear is that the Government has made some very rosy assumptions about what will happen in the short and medium term. On the short-term assumptions that appear on page 4 of the plan, how many megawatts of renewable heating are currently under construction, how many are in planning, how many have received planning consent and how many are in "other known projects", as referred to on page 4?
I thank the member for his question and urge him to approach the issue with a further degree of positivism. We are building a database about what we have, and we want 2GW of renewable heat power to be available within the 2020 timeframe. We are also carrying out a pilot mapping exercise in Highland to understand where the renewable heat is and how that might be better mapped to where the conurbations and communities are. As I said, we are making a new start for a new beginning. As an accountant, I always appreciate the fact that the member's legal training gives him a strong focus on numeracy, but I promise him that we will focus very much on the numbers to manage the issue. However, we need first to take the comprehensive snapshot by building a database of what we have just now before we can move forward.
I thank the minister for providing an advance copy of his statement and of the action plan.
I certainly agree that renewable heat is a critical area of policy that provides significant opportunities. However, why has the minister adopted an interim target of 11 per cent for renewable heat, whereas the FREDS group to which he referred indicated in February 2008 that a 20 per cent target is achievable? Is that connected to the Government's decision to support an amendment during the 11 June debate on waste policy strategy that called for large-scale waste-to-energy plants to be ruled out in the future? Will he assure us that the Sustainable Development Commission will be invited and encouraged to overturn that position as part of its research into Scotland's potential for energy from waste?
As the member will understand, the Sustainable Development Commission has been firmly involved in helping us to carry out research to help us to define the target. The 11 per cent target is based on factoring in the renewable heat incentive, so we feel that it can be sensibly achieved. I will be delighted if we exceed the target and we will certainly put in energy to ensure that we have every chance of doing so.
We have a strong focus on energy from waste. We have assumed that the amount of solid waste that will be used in renewable heat will be capped at 25 per cent, but we think that energy from waste could provide as much as 5 per cent of Scotland's heat requirements, which is a significant contribution. I repeat that we must bring together those threads—weaving in the issues that the member has raised—and do so openly, so I encourage him, too, to attend the event on 22 February. We need people to be involved in that open debate, in which we will try to get the sector to work together as collegiately as possible. If necessary, we can break out into individual groups on different strands, such as waste and biomass, to ensure that we get the best possible future for renewable heat in Scotland.
We come to back-bench questions.
As someone who successfully lodged an amendment to beef up the delivery of the renewable heat plan in the Climate Change (Scotland) Act 2009, I am delighted by today's statement. What contribution does the minister foresee the plan and renewable heat as a sector making to the European target of meeting 20 per cent of our energy needs from renewable energy by 2020? How do our targets in that area compare with those of the rest of the United Kingdom?
We see the plan making a highly material contribution to the meeting of that target. It is worth noting that our target for 2020 is to meet 20 per cent of our energy needs from renewable sources, whereas the UK's target is only 15 per cent. We must take advantage of our comparative advantage and consolidate that. We anticipate that renewable heat could make up 20 per cent of the overall 20 per cent target for 2020. The contribution that renewable heat will make in Scotland—11 per cent of our heat will be produced from renewable sources—represents about 8.9 per cent of the UK target, so we are ahead of our pro rata population share.
We believe that there are indicators that we will get the necessary momentum. The fact that on 22 February we will fill the room with industry representatives and all the other allies and stakeholders who could help us to meet our target or who would benefit from what we are doing is indicative that we are on course to achieve the results that the member and I want us to achieve.
The minister helpfully made it clear in his statement that the report by the Sustainable Development Commission Scotland was published in tandem with his Government's action plan. The SDC's report includes a section entitled "Policy Recommendations for 2020". Are any of those recommendations not being taken forward by his Government in its action plan? If so, why is that the case?
To give the member the accuracy that she requires, I would prefer to reply to that question in writing. My ability to memorise two reports, do a check and balance, and compare and contrast them is not total. It is a good question, which opens up an extra stream of work that we could and should do, and probably have done, but we will report back and fulfil on that front.
I always thought that civil servants wrote speeches for ministers so that they did not have to memorise everything.
I am at a bit of a loss. I always thought that it was traditional for an action plan to include lots of bold, new actions for us to discuss, so that we could identify what they would achieve. The minister could have told us that from now on the planning system would ensure that no new buildings would be put up in Scotland without incorporating renewable heat or that local authorities would be required to focus on the real polluters when it comes to air quality, rather than making life difficult for wood-fuelled biomass, or he could have announced an increase in the paltry £2 million loan scheme for buildings that cannot take insulation. He did not do that. He told us that in four months' time there will be a meeting of stakeholders. Is that not all a bit limp?
I am trying not to be limp. The glass-half-empty approach is not the most constructive one for Patrick Harvie to take.
We are moving in the right direction. We are trying to get everyone involved. A further independent report will be published later in the year, which will look at issues such as permitted development rights for air-source heat pumps and micro wind turbines. Recommendations from the report will be included in the planning guidance thereafter.
We are trying to move forward. A negative approach does not get us very far. If we frame things positively, we will make better progress. I heard recently that at one of its plants in Japan, Toyota gets 46 suggestions a year. General Motors averages zero. Volvo, which copies Toyota, gets three. The reason why Toyota gets so many is that all the suggestions are framed in the positive. Everything is evaluated and an effort is made to make everything work. That is the climate that we need to create here. I would welcome Mr Harvie's conversion in due course.
The Scottish biomass heat scheme, which is now in its third round, is specifically targeted at small and medium-sized enterprises. SMEs are vital for jobs and the economy, and they have a huge potential in contributing towards cutting Scotland's emissions. Will SMEs be able to benefit from the upcoming UK renewable heat incentive funding stream? How is it envisaged that SMEs will contribute as a sector to delivery of the plan?
The short answer is that SMEs will benefit in business installations and in being part of the supply chain. Indeed, before the RHI, they are already benefiting from the biomass scheme. In my constituency, Sandy Brunton, who runs the post office in Fionnphort on the Ross of Mull, is giving up his post office and retail outlet in favour of going full time at air-source heat pumps. Holiday homes in the Kintra area of Mull might benefit from that in due course. There are real opportunities for small businesses to be the backbone and a catalyst of the renewable heat revolution. Such opportunities merge with energy efficiency in the potential business mix. The building trade is seeing real potential in that respect; we may even have a new trade. I would certainly welcome SMEs as individual organisations and SMEs' representative organisations engaging with us as we proceed with the debate.
The Scottish Government has still not responded to calls to introduce permitted development rights for air-source heat pumps. The renewable heat action plan commits it only to commissioning work to explore the feasibility of introducing permitted development rights by the end of March next year. Can the minister not simply move ahead and inform members today that he will introduce permitted development rights for air-source heat pumps and include micro wind generation in that?
I mentioned that an independent report that is due to be published by the end of the year will outline what factors should be considered in the context of permitted development rights for air-source heat pumps and micro wind turbines. Its recommendations will be considered and included in planning guidance thereafter.
On top of that, technology is developing. I have heard of various visits to the Mitsubishi air-source heat pump plant in Livingston. I am looking forward to the development of such technologies and products in Scotland and to their having attributes that will make them things that we all want to have and which have favourable permitted developments behind them.
An action plan should contain action and it should be a plan. I concur with what Patrick Harvie said about the lack of action or a plan in the document that we are discussing.
I will follow up Marilyn Livingstone's question. I am disappointed about the lack of progress on air-source heat pumps. The Economy, Energy and Tourism Committee has pressed for progress to be made on them for a considerable time. Has the minister visited Mitsubishi yet to see an air-source heat pump and discover why air-source heat pumps should be given permitted development rights? On the Climate Change (Scotland) Act 2009, when might the microgeneration council tax reduction proposals come forward?
I have not yet visited Mitsubishi, but, having twice given it a punt today, I am morally obliged to do so. I am personally interested in visiting it.
The member masks the fact that we have a plan that will really kick into action when the renewable heat incentive comes along and which is fuelled by a group that we have put excellent people on. That group has already met twice, is meeting again and is producing action out there with real companies. That is the real climate. The idea that everything can be done in the chamber is fanciful. We need to get out there, consider ideas, and get prospects of meeting genuinely commercial requirements that will give us 2GW on the ground through connecting with the sector. We are doing that and I expect that to continue. I look forward to working with the committee on the matter as the weeks and months pass.
The target that the Government has set for renewable heat is most welcome, given the challenging carbon reduction targets that the Parliament agreed in the Climate Change (Scotland) Act 2009. However, can the minister expand on the role that the renewable heat sector can play in alleviating fuel poverty and on how renewable heat can be used in homes in general?
The FREDS community renewables implementation sub-group will shortly meet for the first time. That group will add some focus on the issue to which the member refers. We also have the energy assistance package, which was announced back in April and which has the full backing of the Scottish fuel poverty forum. That is supported by a budget of £60 million in 2009-10, and it is helping social sector tenants and tackling poverty by offering, for the first time, innovative technologies such as air-source heat pumps in a rural setting. Beyond that and beyond the central heating programme, which continues, we have the prospect of 5.1 million innovative people throughout Scotland using hybrids and variants of those technologies and broadcasting that to their friends and neighbours. The experience of that and the volume that it will bring will, I hope, bring down the price of such technologies. With the incentive schemes, it will create a renewable heat revolution in Scotland.