“Determining and delivering on Scotland's energy future”
The next item of business is a debate on motion S3M-4948, in the name of Iain Smith, on the Economy, Energy and Tourism Committee's report "Determining and delivering on Scotland's energy future".
I am delighted to open the debate on behalf of the Economy, Energy and Tourism Committee. The committee's report "Determining and delivering on Scotland's energy future" is the result of an in-depth and detailed year-long inquiry. At the outset, I thank everyone who was involved. We received a large volume of written evidence, took oral evidence from 120 witnesses and undertook fact-finding visits around Scotland and in Germany, Denmark and even into Swedish territorial waters. We also drew on the evidence that we received in the course of our inquiries on the national planning framework and the Climate Change (Scotland) Bill. I thank everyone who assisted the committee by providing evidence, particularly those who facilitated our visits, which were invaluable. Our clerking team was magnificent in keeping the inquiry on track, providing us with the background information and support that we needed and helping to draft the comprehensive and, with only one exception, consensual report that we are debating. Finally, I thank my committee members, whose constructive approach and hard work throughout the inquiry enabled us to produce a report that I believe sets a clear and challenging agenda. That agenda requires urgent action to deliver a step change in how we produce and use energy in Scotland. It is an agenda that recognises that Scotland is not an island, but part of a wider United Kingdom and European energy market; that the energy debate is not just about electricity generation or even transport, but about how we produce heat, which accounts for 50 per cent of our total energy use; and that Scotland can be a world leader in renewable energy, particularly in marine renewables.
The genesis of the inquiry was in comments from various people, including Ian Marchant of Scottish and Southern Energy, that members of the Scottish Parliament should launch an inquiry into the how and not the what, and that we did not need another analysis of the problems; we needed a political action plan that spelled out the decisions that the Parliament must make and what those decisions should be. We did not need to question the various targets on carbon reduction or renewable energy; we needed to consider how we would get there. The committee's report is just that—a vision for Scotland's energy future that was agreed unanimously in all but one area, and an action plan on how to realise that vision. I hope that the Minister for Enterprise, Energy and Tourism will say whether he shares that vision.
The key parts of our report are the chapters entitled "Scotland's Energy Future—Our Vision" and "Conclusions and Recommendations—The Political Action Plan". Those parts are on pages 25 to 36 of the report and members who are doing a bit of cramming should concentrate on them. Our vision identifies four interlinked goals for Scotland's energy future, which are efficiency, environmental sustainability, social justice and economic and employment opportunities. I will consider each of those in some detail.
We have said that it is no longer tolerable to waste energy, especially in a recession. Energy efficiency can no longer be seen as the Cinderella of energy policy. All eight members of the committee, across four parties, called for a radical shift in policy towards energy efficiency and for substantial investment of resources in initiatives that focus on maximising the efficiency of supply and reducing the consumption of energy.
I strongly commend the committee's clear recommendations on that. Does the member agree with the comments on the issue that Michael Levack made at the Economy, Energy and Tourism Committee meeting this morning, as part of its budget scrutiny? He pointed out that there are opportunities to make progress in the short term to take the issue much higher up the agenda.
I am sure that that will be reflected in our budget report that will be produced shortly, and in the remarks that I am about to make.
The committee believes that energy efficiency must come first in the hierarchy of priorities in Scottish energy policy. The committee recommends that the Scottish Government should consider increasing spending by something in the order of £100 million per year on an area-based and targeted energy efficiency programme that is designed to tackle fuel poverty and reduce energy demand. That was the point that Michael Levack emphasised during the committee's budget considerations today. We have seen this week that the current energy assistance programme is falling well short of what the committee is calling for. It is one area where the Scottish Government's written response falls short and the committee has agreed to look at it as part of its budget scrutiny.
It is not acceptable or sustainable for 65 per cent of the energy that we use in electricity generation simply to go up the chimney in waste heat. If we are to create an environmentally sustainable energy system, we must look critically at our centralised generation system that creates such waste. For example, much more needs to be done to encourage combined heat and power schemes, community generation, micro-generation and renewable heat. Although I welcome the Scottish Government's response as moving in the right direction, we need more action on heat mapping and to deliver more use of CHP and district heating schemes.
Our visit to Copenhagen showed what can be done if the Government takes the lead in that area. However, we also need action from the UK Government to change the ludicrous transmission charging regime, which actively discourages the development of decentralised generation and renewables. The committee was singularly unconvinced by the defence of the current regime by the Office of Gas and Electricity Markets. It is simply unacceptable for generators in the north of the UK to be charged £190 million to access the grid, while those in the south are actually paid £140 million to do so.
The vested interests of National Grid and the large generating companies who want to see the maintenance of a charging regime designed to support a centralised system of large thermal power stations, including nuclear, must be challenged. We heard evidence that renewable energy projects in the north of Scotland are being cancelled or not developed because those discriminatory charges make them unviable. Access to the grid and the cost of access to the grid are key issues in enabling community renewable schemes.
Finally on the environmental sustainability goal, we need clarity from the Scottish Government on just where it stands on new coal or gas-fired power stations. It is the unanimous view of the committee, expressed not just in our report but in our response to the national planning framework, that being carbon capture ready is not good enough. The committee agreed that we all support the idea of carbon capture and storage, provided that it can be brought on stream in the next decade and is affordable. New generating capacity, such as the proposed coal power station at Hunterston, must be fully carbon capture ready from day one if we are to have any chance of meeting our climate change targets. In the meantime, we all agreed that it might be necessary to extend the life of current nuclear power plants. However, by division, a majority of committee members agreed that new generation of nuclear power was not needed. That was the only paragraph in the report—all 586 of them—on which there was a division. For the majority, a focus on energy efficiency, renewables, cleaner coal and a decentralised system with greater use of CHP and district heating for example, was seen as the future.
The third strand of our vision is for a socially just energy system and the committee supports the statutory target of eliminating fuel poverty by 2016. We are about to enter the winter period and we consider fuel poverty to be an unacceptable blight on our society. That is why I am disappointed that, in his response to the committee's report, the minister is now committing to eliminating fuel poverty only
"so far as is reasonably practicable".
I appreciate that he sent further clarification on that point to the committee today and I am sure that he will refer to it in his remarks, but the 2016 statutory target is either just that or it is not. The committee believes that more action is required if we are to deliver that target, which refers to earlier comments about fuel efficiency.
I think that everyone in the chamber shares the view that Scotland can become the renewables powerhouse of Europe. If we can get it right, the economic and employment opportunities for Scotland are enormous. However, if we are to achieve that prize we need to be more ambitious in our aspirations. I was a little surprised that, when challenged on where his estimate of the potential jobs in Scotland from renewables came from, the minister's ambition extended only to achieving 10 per cent of the UK Government's estimate for Britain as a whole. Surely, even if the Scottish Government has not made its own calculation of the potential, our ambition should be for far more than 10 per cent of the number of UK jobs in renewables, because far more of the potential for renewable energy is in Scotland.
We all want an energy system that helps Scotland to maximise its jobs potential and contribution to economic growth. The committee agreed that we need to rethink skills support, fiscal regimes and Scottish Government policy in relation to the North Sea, green jobs and new coal technologies. We need co-ordinated investment in our port infrastructure to ensure that we can develop, construct and maintain offshore wind, wave and tidal devices. In marine renewables, where the potential might be greatest, the committee identified a clear gap in development finance that is needed to bring projects up to prototype scale.
Although we welcome the Saltire prize, the committee was of the unanimous view that it does not fill the gap left by the commitment of all the funds from the previous wave and tidal energy support scheme, and that a successor, or WATES 2, is required. I am pleased that ministers are now at least considering that, but the need is urgent if we are not to miss the boat or the tide. Time and tide wait for no man. I appreciate that the minister cannot comment on the Beauly to Denny transmission line, which ministers are considering, but the committee is unanimously of the view—it has expressed this view repeatedly—that an urgent decision is needed on the upgrade of that line if Scotland's full renewable potential is to be exploited.
In conclusion, I welcome some of the Scottish Government's response. I welcome its support for reform of the carbon emissions reduction target—CERT—scheme, for a roll-out of smart meters, and for a North Sea supergrid. However, the response on some of the big-ticket items leaves much to be desired. We need the minister to commit to energy efficiency through an improved and better-funded energy assistance programme, and we need a radical change in building standards, not just for new build, but for existing buildings. We need a commitment to solving the problems with heat in Scotland and a commitment to rapid growth in CHP, district heating and renewable heat. We need substantial investment in marine energy to get things into the marketplace rather than just relying on the Saltire prize, and we need an energy efficiency action plan in place, not just another draft produced in the next few days.
In short, we need a little less complacency from the Scottish Government, and fewer we-are-doing-it-all-already responses. If we believed that the Government was doing it all already, we would not have needed to make recommendations for change. If we are to make the step changes that we must make to meet our climate change objectives, address fuel poverty and exploit our full economic potential, we need a little more urgency from the Government and the delivery of the committee's action plan.
On behalf of the Economy, Energy and Tourism Committee, I move,
That the Parliament notes the conclusions and recommendations contained in the Economy, Energy and Tourism Committee's 7th Report, 2009 (Session 3):
Determining and delivering on Scotland's energy future (SP Paper 313).
I strongly welcome the committee's report, but do not fully recognise the charge that there is a lack of urgency. The Government's focus on Scotland's energy future has been huge, and that focus stands audit against what has gone before. However, we are where we are.
The report contributes to the building and maintaining of a clear agenda for the delivery of Scotland's energy needs and potential. The data and opinions that have been collected and the recommendations are all valued as important contributions to the debate. The report has a healthy focus on delivery, which we think is right, and the committee and inquiry witnesses are now keen to see things happen. The report has consolidated the views of many people and many shades of opinion, and it reinforces many of the positive signals that we are giving to industry, generators, communities, regulators, grid operators, local government and the UK Government, Europe and others at home and abroad who see Scotland's potential.
There is a great deal of consensus in the report. The committee and the Government are not like-minded on all issues, but we are on the scale and vision for harnessing Scotland's energy potential. Areas that the Government is working on have been identified, and further specific action in a number of areas has been recommended. That shows a positive way forward. It shows that we are moving on with a more open debate, and not simply indulging in a collision of opposing ideas and opinions. We are reaching a previously unspoken conclusion that the optimal way forward can emerge and evolve from open-ended dialogue about Scotland's energy future. The report and the debate form important parts of that dialogue. The aim is to foster a high level of co-ordination and collaboration, investment, risk sharing, consistency and perseverance. I hope that we continue to produce more and more valid information to enable informed choices, and to create a climate in which we can monitor vigilantly the effectiveness of the actions that are taken.
There is already a great deal of consensus in Scotland. Many people are working with us to develop our energy sector. The Government has given a clear steer on that, and I welcome the clear steer that has come again from the committee.
Our consistent energy strategy is paying big dividends. Many other people and organisations are delivering an explosion of innovation and effort in Scotland, and it is becoming clear to me that the more motivated people there are out there actively involved, the more efficient and effective our energy sector will become.
Tidal energy developments in the far north are, of course, in the context of decommissioning and post-Dounreay regeneration. Will the minister assure me that, in his monitoring, he will look into the machinery that he has at hand, the personnel involved and the money stream to ensure that his objectives for my part of Scotland are being met by those whom he has entrusted to meet them?
I can give that commitment. I visited the member's constituency during the summer and met people who are working in common cause on the issue, which we will drive forward.
We see positive signals when we go to conferences, exhibitions, the European Marine Energy Centre and energy plants across Scotland. We are taking a systematic approach. The Scottish energy advisory board, chaired by the First Minister, is reported to by subsidiary boards on oil and gas, thermal energy and carbon capture, and renewables. The renewables subsidiary board is essentially the forum for renewable energy development in Scotland, which has sub-groups on marine energy, micro-hydro, hydrogen fuel cells, renewable heat and community energy.
Close engagement—bringing into play allies such as non-governmental organisations, communities, other sectors and the public sector—is a key part of the process. We are fostering a focus, with partners and allies, on the energy action plan, which will be published soon. Ministers for health and wellbeing, housing and communities and environment and climate change, as well as from my department, are coming together to support that process. The renewables action plan, which was published on 1 July, is on the table and is a working and evolving document. The marine energy road map was published in August, the renewable heat action plan is due and the carbon capture and storage road map is coming forward. Alongside all that, we have the guidance of the Climate Change (Scotland) Act 2009 and our energy pledges, which I will discuss later.
As the minister knows, the Council of Economic Advisers suggested that an independent report on energy be produced. Has he had a chance to study that report?
I have not yet studied it—it is in my in-tray.
I recognise and accept the key priorities that the committee sets: efficiency in energy use and system delivery, environmental sustainability, social justice, and maximising of economic and employment opportunities in the energy sector. It is important to have an open-ended goal for the maximisation of such opportunities in Scotland—there is a general appetite for that. Subsequent announcements will clarify the issue.
The Government is determined to act on the committee's recommendations, where it is not already doing so. Our intentions are set out in detail in our full response to the report, dated 2 September, which has been followed up by a response today. Iain Smith made a point about fuel poverty. There is no departure from the target set by the previous Administration. Section 88 of the Housing (Scotland) Act 2001 requires ministers to make a statement on fuel poverty
"so far as reasonably practicable".
In the 2002 fuel poverty statement, the target was articulated as being to ensure
"so far as reasonably practicable, that people are not living in fuel poverty in Scotland by November 2016."
There is total consistency.
Beyond that, we have a comprehensive programme around our 10 energy pledges, which were published in March; a progress report is due soon. The pledges set out a coherent approach to energy, covering many of the committee's recommendations, and a comprehensive programme of action, ranging from growing renewable energy and the oil and gas sector to supporting the development of a subsea offshore grid and action to improve energy efficiency. Because we see the energy sector for what it is—the key sector for growth, innovation and jobs—our efforts and those of the Economy, Energy and Tourism Committee and our enterprise agencies are focused on that sector.
We have an intense programme of activity on the key issues. We are making significant progress on streamlining and speeding up the planning and dissenting progress. I will say more about grid and transmission charging in my closing speech, but we are continuing to press for the equitable regime for which Iain Smith eloquently called. He termed the current system "ludicrous", "discriminatory" and "unacceptable", and argued that it "must be challenged". We endorse all those comments, and a challenge to the charging regime is in progress.
We are progressing significant and complex developments such as the Beauly to Denny power line, which Iain Smith mentioned. It is an important decision, so we must ensure that all views are fully and properly taken into account and that the public inquiry report is considered carefully. A decision on the project will be taken as expeditiously as possible.
I note the committee's comments on the fossil fuel levy—the £150 million—and welcome its encouragement for greater engagement with the United Kingdom Government on finding a way to release those funds without impacting on the Scottish consolidated fund. There is also the need to challenge deflationary pressures and to focus Westminster's attention on the benefits that can accrue from bringing forward capital expenditure.
As I mentioned, we are using our action plans and road maps including the renewables action plan and infrastructure investment plan to drive forward our overall agenda with key stakeholders and allies. We are also using the moneys that we are spending with the Carbon Trust and Energy Savings Trust, and the review of our innovation and investment work, to bring forward funding streams under a more co-ordinated approach. Furthermore, there is our support for Scottish Enterprise and Highlands and Islands Enterprise in looking into the need for greater investment in low-carbon technologies; our funding of marine and tidal development; investment in the Scottish European green energy centre; and our on-going engagement with Europe, which has seen considerable progress.
I welcome the report and the debate. This important work is already in hand and more of it is planned. I am pleased that we are working together with the shared aim of delivering Scotland's energy future.
Almost every witness who offered evidence to our inquiry said that energy policy should be about lower carbon emissions and higher energy security at the least cost to consumers and with the greatest benefit to the economy. The question was how to strike the right balance between what can be, at times, conflicting objectives.
I was impressed by the Royal Society of Edinburgh's concise formulation that public policy should give energy producers the freedom and support to use the widest range of generation technologies, maximise the connectivity of transmission and supply in Britain and Europe, and seek ways in which to reduce energy demand and increase energy efficiency.
If those are the right priorities, every policy proposition should be measured against them. Most of the propositions in the committee report pass those tests. The major exception—as the convener said, it was the one issue on which the committee divided—is the Scottish Government policy of ruling out new nuclear power. We divided equally on the issue and the convener's casting vote backed the Government position. If the Government gets those big choices wrong, we run the risk of having an energy policy that is unbalanced from the outset.
In the revised national planning framework, ministers recognise that
"There is a need for new baseload electricity generating capacity to replace that provided by the power stations programmed for closure over the next 20 years."
If ministers rule out new nuclear in meeting that need, low-carbon baseload electricity can come from only one source: carbon capture and storage.
A number of us saw carbon capture in operation at CCS Schwarze Pumpe in Germany. We know that it can be done. The British Government and the European Union have committed billions to demonstrating that carbon capture can work. However, the carbon that is captured at Schwarze Pumpe is trucked across country to be stored in a coal mine. In Germany, carbon transport and storage raise similar concerns to those that are raised by the transport and storage of waste from nuclear power stations.
I believe that carbon capture can deliver. The saline aquifers that are readily accessible below the North Sea offer an answer to the storage question; the most recent study will no doubt confirm that. The expertise of our offshore oil and gas industry provides much of the answer to carbon transport. That said, no technology is certain until it is operating on a commercial scale and nowhere in the world is that the case thus far. Ministers need to bear that in mind when they consider proposals for new coal-fired power stations. Clearly, those proposals are posited on the assumption that carbon capture will be put in place at some point.
If carbon capture and storage does not deliver, we must not hear again the argument that we have heard in the chamber once or twice over the past couple of years that we need to produce only enough power to meet our own needs. Accepting the argument would, of course, involve us turning our backs on the existing strength of Scottish energy production as an export industry. It would be a big mistake for us to do that. For example, the Scottish oil and gas companies that operate in oil provinces around the world bring in export earnings in excess of £4 billion a year.
Scottish electricity production exceeds consumption most of the time. That is a good thing, given that it sustains jobs and economic activity in Scotland. Surplus power should not be used to justify cutting back generation; it would be far better for us to limit consumption and maximise export earnings while decarbonising as much as possible of our electricity output. It is in that context that Labour members of the committee believe that it would be a mistake to rule out any low-carbon source of electricity at this time.
There was broad agreement on the need to reduce demand where possible, while there was also recognition that reducing carbon emissions from heat and from transport may require the generation of more low-carbon electricity. Half of Scotland's energy consumption is of heat, so action on that offers some savings in emissions and in costs to consumers. As Iain Smith said, the committee had the opportunity to see one of the best exemplars of district heating when we visited Denmark and there are clearly useful lessons to be learned. At a power station such as Longannet, more energy is released into the atmosphere than is turned into electricity. Capturing that heat would be a significant gain for energy efficiency.
I was pleased that ministers agreed at stage 3 of the Climate Change (Scotland) Bill to reduce the burden of business rates on combined heat and power schemes. Aberdeen boasts one of the best exemplars of CHP anywhere in Britain; it has reduced both carbon emissions and costs to consumers, many of whom previously lived in fuel poverty. I hope that ministers will back up that decision, which was made in June, when they bring forward their renewable heat proposals. Ministers have received approximately £2 million in consequentials for money allocated in the last UK budget for district heating schemes elsewhere; it would show real commitment to this form of technology if that money were used to promote further CHP development in Aberdeen and Scotland's other cities.
Iain Smith mentioned the need for a new wave and tidal energy support scheme. That need was highlighted only last month by the Scottish Government's advisers in the marine energy group of FREDS. When the minister sums up, it would be useful to hear whether ministers will respond positively to the marine energy group's recommendation that there should be a replacement scheme for WATES and that it should have an increased budget for use year-on-year by developers.
Such commitments, whether they are in the single millions or the tens of millions, may not cost much compared with, for example, the multimillion pound commitments of the UK Government on carbon capture and storage or, indeed, the investments in grid infrastructure such as the Beauly to Denny power line, on which I hope we will very soon hear an announcement from the minister. However, they would be a positive signal of intent and I hope that ministers can respond positively on those matters today.
I thank the committee clerks for their very hard work in helping the committee to produce the report. I also thank the many dozens of witnesses who gave both oral and written testimony to allow us to reach the conclusions that we did.
After taking part in the inquiry, I am as convinced as ever that there are—as we have heard, but it is worth repeating—three fundamentals of energy policy: the price, security of supply and emissions. All three are interlinked and they are all critical to policy. What is required more than ever is a balanced mix, so that we have a sensible and sustainable energy policy for the long term. In that vein, I agree with Lewis Macdonald that the Scottish Government's position in ruling out nuclear at this stage is a mistake; I hope that it will reverse that position over time. However, I do not intend to dwell on that, because it is better to talk about the report's other conclusions than to focus on the main one with which there was disagreement.
The best way of summing up the Government's response so far, in its written response to the report, is to pick a quotation from the minister's opening speech, in which he referred to
"an intense programme of activity".
It is important to note that there is a difference between activity and action. Although there has been an intense programme of activity, the firm thrust of the committee's report is that there needs to be greater action from the Government in respect of deliverables and measurables and that action needs to happen sooner rather than later because, on many of the issues, time is crucial.
At the top of the energy hierarchy, the report focuses heavily on the theme of energy efficiency, which members have talked about today. Energy efficiency is good for the environment, because it saves energy, but it is also good for household expenditure; it is what we might call an energy win-win.
Is the member aware of the work that the Welsh Conservatives have been promoting in the National Assembly for Wales? His colleagues argue that reductions in carbon emissions, as well as the social and economic benefits of energy efficiency and reducing demand, can be achieved only if action is taken on a far more ambitious scale than has happened to date. Does he agree that this is the sort of issue that should acquire political support across the spectrum if we are to move things forward a great deal faster than we have done so far, and that it should be viewed as a matter of urgency?
I am delighted to learn that Patrick Harvie is a keen supporter of the Welsh Conservative party. With regard to his question, the committee report is clear and the committee did not divide on the matter—there was absolute agreement that energy efficiency needs to move up the agenda, and that that needs to happen quickly. In his earlier intervention, Patrick Harvie was right to mention the comments of Michael Levack of the Scottish Building Federation, who once again gave compelling testimony to the committee this morning.
I applaud the council tax rebate that the Government included in the climate change legislation—I was about to applaud it, anyway. It could have a positive role to play. However, as I said, energy efficiency needs to move further up the agenda. Last December's Audit Scotland report pointed out that central Government does not have a great track record on energy efficiency, and the hard work must begin there.
The energy efficiency action plan has moved at a very slow pace. When we scrutinised the Climate Change (Scotland) Bill, we had to push the Government to accelerate putting the plan out to consultation. At the weekend, I read about the lack of success, so far, of the home insulation scheme, which was announced as part of the previous budget. The press described the scheme as being in meltdown, although I do not know the veracity of that. It was suggested that no insulation was expected to be provided under the scheme before December this year. Will the minister comment on that in pulling together his closing remarks?
The committee heard about fuel poverty. I am grateful to the minister for clearing up the point about the target, but that must be set against the backdrop of where the statistics are going. In 2002, 13 per cent of households in Scotland were deemed to be fuel poor; in 2007, according to the most recent figures that I have been able to get hold of, 25 per cent of households were deemed to be fuel poor. It was clear to the committee that a sea change is required if we are to get anywhere near the 2016 target. In response, the minister said that the energy assistance package was that sea change. However, the evidence—and the reports that were around at the weekend—suggests that there has not yet been such a sea change. Indeed, it was indicated that only 173 installations have been carried out under the scheme in its first five months; I appreciate that installations will also be carried over from previous schemes. If installations continue at that rate, they will not represent the sea change that we hoped for.
We have the best potential marine energy resources in Europe, and possibly the second best in the world, but we are not the only ones in the game. We need only look across the water to Portugal to see that other countries are keen to get in on the action. Some fundamental points about that were put to us by industry representatives. What is being done to help prototype funding, which is where the blockage appears to occur? What support is there for the next 12 to 24 months? Industry feels that that period is critical. What is being done about infrastructure? The ports, harbours, manufacturing space and installation capacity are simply not there yet. We have great potential, but we need to ensure that marine renewables can play their part and that we can get away from the stage of simply having potential.
On behalf of the Liberal Democrats, I welcome the debate and congratulate the Economy, Energy and Tourism Committee, its hard-working clerks and all the stakeholders who were involved in producing the report.
The committee's vision is that any future energy system should be based around four key characteristics: efficiency maximisation, environmental sustainability, social justice and a maximisation of wealth and employment.
The report is an endorsement of what the Liberal Democrats have repeatedly called for in the energy sphere: no more new nuclear energy generation in Scotland; publication by the Government of the energy efficiency action plan; the introduction of a successor to the wave and tidal energy scheme—WATES, as it was known; an increase in attempts to tackle fuel poverty; the release of Scotland's entitlement to its share of the fossil fuel levy; and decentralisation of the supply network.
According to the Royal Society of Edinburgh, 53 per cent of energy use is for the generation of heat, as was indicated by Iain Smith, the committee convener. It is therefore wise to remember that investment in insulation and heat loss prevention makes good budgetary sense.
Efficiency maximisation is correctly highlighted in the report. The need for decentralisation of energy is key. The loss of electricity in power cables the further they travel, due to Ohm's law, suggests that in future local energy production will be helpful in the context of efficiency, as well as helping local economies.
Biomass cogeneration plants, or district heating plants, are a particular hobby-horse of mine. Such plants produce heat and electricity for communities and should be promoted. European examples in Austria and Scandinavia are worth exploring and demonstrate that Scotland is playing catch-up. We are not leading in the field. Biomass is a good use for the vast acres of forestry in Scotland, which are still in our ownership—I am thankful for that.
Biomass and other methods of renewable energy can go a long way towards addressing Scotland's energy efficiency needs. The committee is still waiting for the Government to publish its energy efficiency action plan and to launch its home insulation scheme. Both initiatives were negotiated during last year's budget discussions, but there has been a resounding silence since then. Perhaps when the Government announces those plans it will also announce access to the fossil fuel levy account. The First Minister boasted that that would happen during the first 100 days of the Government, but it has still not happened, although the Government is in its third year of office. Perhaps the issue is still in the First Minister's in-tray.
A controversial issue for some committee members is that the report does not recommend a new wave of nuclear power stations. I support that approach. Conservative and Labour members support new nuclear power stations, as does the First Minister's Council of Economic Advisers, so the Liberal Democrats are the only main party to oppose new nuclear capacity. Apart from the obvious danger and sustainability issues that are associated with nuclear power, we think that there should be further investment in renewable energy production, so that we can meet the Liberal Democrat target of 100 per cent renewable electricity generation by 2050.
There is a need for clarity in the planning process. A balance must be struck between communities' wishes and needs, so that renewables projects have as their aim public and social goods and are not simply business opportunities for developers. Full community involvement at every stage is crucial.
The report strongly recommends the establishment of a successor scheme to the wave and tidal energy support scheme, which the Government cancelled.
The member mentioned a Liberal Democrat goal to produce 100 per cent renewable energy by 2050. Does that mean that Liberal Democrats do not support carbon capture and storage?
The goal is for 100 per cent renewable electricity by 2050.
The Saltire prize does not go far enough to make a difference. We need many projects, not just one. The prize has been announced again and again but it is a one-winner-takes-all prize, which will not be won until six years from now. The Government's marine energy group and the Institution of Mechanical Engineers agree with us that what we need now is not grandstanding but investment. Liam McArthur has approached Mr Swinney on that issue. We look to the minister to turn the tide and introduce WATES 2.
Liberal Democrats are concerned that the Government is no longer on track to eradicate fuel poverty by 2016, as the report says. The problem will not be helped by the cutting of energy assistance packages. I hope that the minister will talk about how we can tackle fuel poverty effectively.
I congratulate the committee and clerks on the comprehensive and welcome report that they produced. The committee has a duty to hold the Government to account and did so by highlighting several issues on which the Government is falling short. We are 70 per cent reliant on fossil fuels in Scotland. The resource is finite and we must address the issue now. I have tried to cover areas of concern that are mentioned in the report. The Scottish Government needs to do much better and I hope that it will realise the urgency of the situation and act on the report. As the report hints, we can do better.
I appreciate the opportunity to speak in the debate on the Economy, Energy and Tourism Committee's report.
I dissent from some of the recommendations in the report, for example the acceptance of
"the need to extend the operating lifetimes of the current generation of nuclear power stations."
I have seen those mausolea rise and fall. Terrorist attacks and the disposal of the nuclear waste that they produce will dog them for the 30,000 or so years that they will be with us. The compromise in the report would squander on an outdated energy source that is only 35 per cent efficient money that is urgently needed for research in, and the development of, renewable energy resources.
Scotland can, soon, become a major supplier of energy and a gravedigger for CO2—the North Sea oil-bearing strata can accommodate 150 billion tonnes. We need to focus on those strengths and not cling to a nuclear past that is all too much tied up with the notion of nuclear deterrence. We must be prudent when it comes to planning and investing in energy and, before we replicate the expensive toxic ruins of our nuclear power, we must carefully consider and eliminate the potential health and landscape risks of waste incinerator plants or overhead power lines such as the one between Beauly and Denny.
I have news for Lewis Macdonald: an intermediate technology that can produce baseline power cheaply is to hand. It has just been launched—Mr Johnstone will doubtless be amused that it has been launched in Germany but, after all, they have industry there and we do not—and it showcases the need to be in the lead of renewable technology. It is called the Zuhauskraftwerk or the personal power station. People can have one in their cellar if they wish. It is manufactured by no less a company than Volkswagen, which adapted its Golf engine to use natural gas or biofuel and produced an engine and heating system that is 92 per cent efficient. Not only that: the system can be strung together like Wikipedia or Google to produce a combined power output of about 2,000MW. Longannet produces 2,400MW and wastes an additional 64 per cent of its heat by blasting it into the air.
The system has just been launched and, already, about 50,000 people have signed up for the personal power stations. I am not making a plug for Volkswagen—as members know, I have not driven a car for 30-odd years—but the system provides a baseline power unit that can be shifted around. It can be installed in a house to supply much-needed heat to, for instance, old-age pensioners and, once the house has become a passive house—enjoying a normal European standard of insulation—removed and installed elsewhere. That seems to me an admirable method of using an intermediate technology. Not only that: if the units are to be manufactured in Scotland—there is the possibility of entering into some agreement with Volkswagen—we have companies such as Aggreko and the Wood Group that have plenty of experience in installing light, portable power units. The personal power station was a new technology to me when I saw it, but I have been through the printouts and downloads and it seems to me that it is the next great thing.
The committee's report sensibly emphasises energy efficiency, considering that 53 per cent of our energy demand goes on space heating. Among nearly 140,000 houses in Britain that were surveyed over a year, only four reached the European Union energy rating band A. Most of our stock struggles hard to reach band C, so we will not cure the problem with a bit of do-it-yourself. We have to redesign our housing stock and insulate it so well that it barely requires heat. It will resemble—alas—few houses so far built in the United Kingdom.
As with houses, so with shops. Should we succumb to every offer by a supermarket to create 200 jobs without querying the carbon footprint that it will leave—the buildings have to be heated and cooled; trucks bring in the goods and cars take them out—and the damage that it will inevitably do to the commercial fabric of the small-town communities that the Conservatives and I are pledged to retain?
I turn to transport. In time, there might be electric cars, but there are great problems with batteries and their recycling, with hybrid engines and with the absence of a second-hand market. Remember that, in Victoria's age, it took 40 years to make the transition from the three-master cargo sailing ship to the tramp steamer. I do not think that we will be any smarter by going down the way of electric cars. Rather, we must prioritise social solutions—walking, cycling and public transport—particularly in our central belt, which is 75 per cent urban. In Copenhagen, cycles carry 36 per cent of commuters; in Edinburgh, they carry 2 per cent. On that score, our mark can only read: "Must do better in future."
Like others, I acknowledge that the work done by the committee—ably steered by its convener, Iain Smith, and its clerks—was made possible by the many people across Scotland who contributed to our findings. I will draw attention to two assessments of our report that have been made by that wider constituency in Scotland: RSPB Scotland has applauded the committee on producing a wide-ranging and strategic piece of work; Scottish and Southern Energy has said that the strength of the inquiry was that it focused on delivery and recognised the need for urgent action. That call for urgent action is what I will focus my remarks on today.
Today's debate takes place midway through the countdown to Copenhagen, which has been colloquially described by campaigners as "100 days to save the world". Whether or not members share that view, the countdown to Copenhagen should caution us all against complacency. Despite the visionary legislation that the Parliament passed before the summer recess, there should be no descent into mutual back-slapping, predictable positioning or a reliance on targets that only our grandchildren will be able to fulfil for us.
The issue for today, therefore, is Copenhagen. I fully understand why Scottish National Party ministers might wish to take part in the conference—it is human to want to be around when history is being made—but the wider countdown to Copenhagen campaign calls all of us to action now. Therefore, let me use my time to highlight just three things that the Scottish Government might do to demonstrate its Copenhagen commitment.
Action point 1 is that we need absolute clarity as soon as possible on new coal-fired power station consents in Scotland. If the Scottish Government decides, as it has committed to doing, to ignore nuclear power—a point on which I disagree with it—fossil fuels demand to be rapidly decarbonised. That is why the committee's report
"calls for the Scottish Government to conclude its consultation on section 36 … consents as soon as possible".
The Scottish Government is delaying. I ask the Minister for Enterprise, Energy and Tourism to confirm whether new applications for unabated coal power stations—such as that for Hunterston, which is currently included within the national planning framework—will now be rejected.
A second action point on the countdown to Copenhagen, as my colleague Lewis Macdonald mentioned, is a decision on the Beauly to Denny power line. The decision should have been made during the past 100 days, never mind the next 100 days. The public inquiry report that was submitted to the Government 200 days ago called for the matter to be resolved. Scottish Renewables is clear that half of the renewable energy projects in the planning system in Scotland will be able to be plugged in only if the Beauly to Denny line goes ahead. We call on ministers to approve the upgrade of the Beauly transmission line without any conditions that could result in further delays. I say gently to the minister that if President Obama can get to grips with the entire international agenda on carbon reduction in less than 300 days, Jim Mather should be able to make a decision on the Beauly to Denny line in less than 300 days. We look for a decision on that before Copenhagen.
Action point 3 for the Government in the countdown to Copenhagen is to commit to the home insulation scheme that was first promoted by the Green party in last year's budget negotiations, and to make it big scale, with a big impact. It should adopt a street-by-street, house-by-house approach to improving energy efficiency. I predict that that is what will be done in a few years' time, so why do we not just get on with it now? That is what the committee wanted—an area-based, targeted energy efficiency programme
"in the order of £100-170 million per year over the next decade to come".
Currently, the home insulation scheme receives £15 million a year. The draft budget that has been published in the past month proposes a 17 per cent cut in capital budgets in Scotland next year, the value of which is hundreds of millions of pounds. Let us put £100 million back into an area-based targeted energy scheme.
Those are my three action points. Action should be taken on unabated coal-fired power station proposals, a decision should be made on the Beauly to Denny line, and the home insulation scheme should be improved. Those are the areas that should be on our agenda as part of the countdown to Copenhagen.
Time eludes me, so I will quickly add just a few additional action points. As others have said, energy efficiency is the key to reducing demand. There is no better way to reduce demand than to change behaviour. We have the evidence that council tax reductions are effective in changing behaviour on energy efficiency. Can we have a decision on that issue, too, by the time of the Copenhagen summit?
When we passed the Climate Change (Scotland) Bill last summer, the Opposition parties pressed the Government to end the planning restrictions on householders in Scotland who wanted to use mini wind turbines or air-source heat pumps for their homes. That is a fifth area on which action could easily be taken in the countdown to Copenhagen.
I hope that we can have our own countdown to Copenhagen in Scotland by not giving consent to unabated coal-fired power station applications, by consenting to the Beauly to Denny line, by extending the home insulation scheme, by publishing an energy efficiency action plan as opposed to another consultation, by introducing council tax rebates for energy efficiency and by removing the planning constraints on domestic wind turbines. I ask the minister to reflect on whether he anticipates being able to make a decision on any of those five areas in the part of the 100 days that remains before the Copenhagen summit.
Like other members, I pay tribute to the members, clerking team and support staff of the Economy, Energy and Tourism Committee, who worked so hard to produce a comprehensive report.
The Scottish Conservatives have consistently argued that, in future, Scotland's energy needs will be met by having a diverse and balanced range of energy sources. Much of the evidence that was submitted to the committee during its inquiry backed up that approach. The Scottish Chambers of Commerce hit the nail on the head when it said in its submission:
"there must be a recognition that our future energy needs will not be supplied by a single source rather by an energy mix".
I believe that wind and hydro should be looked at in tandem. Within that mix, my region of the Highlands and Islands is already playing a major role in the development of renewables—particularly in onshore wind—and can be expected to play an even greater role in future. Scotland has 25 per cent of Europe's offshore wind power and 25 per cent of Europe's tidal power potential. It is estimated that 21.5GW of commercial capacity is available from the waters around Scotland. There is particular potential around the northern isles and in the Pentland Firth.
In its useful briefing to members for today's debate, the Crown Estate says that the first stage of the Pentland Firth and Orkney waters wave and tidal leasing round should be completed by early next year. The Crown Estate received a total of 42 applications from 20 bidders for wave and tidal energy leases that will deliver at least 700MW of power by 2020. The Crown Estate is also doing good work in enabling the expansion of offshore wind energy and by investing in research and in carbon capture and storage.
As every MSP will know from their mailbag, onshore wind energy remains controversial. With every planning application, there are strongly held opinions on both sides. Now that some wind farms have been built, it might be interesting to conduct a survey of reactions to them.
Onshore wind farms are not appropriate for every site but are suitable for some and, in those instances, should be supported appropriately as one part of the diverse bag of energy sources. Ministers could help matters by providing the guidance on the siting of wind farms, for which we have called for a long time. That would offer clarity to local authorities, developers and communities.
On the issue of offshore wind, I recently met a businessman constituent of mine who is involved in the renewables sector and believes strongly that Scotland should establish an onshore test facility for the offshore turbines that are currently under development and which need to undergo testing before commercial deployment in the North Sea. There is an existing site at Bremerhaven in Germany, but having such a site in Scotland would keep us at the cutting edge of the expertise and support services that are emerging for offshore wind and would help to ensure that the assembly and manufacture of as many elements of the offshore turbines as possible could take place in Scotland. I hope that ministers and other agencies can take up this idea and work with the industry to make it a reality.
We must not forget that the construction of wind turbines in Scotland could be a good source of employment. It is currently a good source of employment in Machrihanish, and it could supply jobs in other areas as well.
Although Glendoe, which I have visited—and which, as we all know, has been temporarily closed by an internal rock fall in the water tunnel, which I hope will soon be remedied—will probably be the last hydro power station of that scale, the Scottish Conservatives are positive about the role of small-scale hydro schemes. I am therefore encouraged that the Minister for Environment recently said that our publicly owned Scottish forests will be opened up to encourage small-scale hydro-electric developments. It has always surprised me that the Forestry Commission has not done that before, given the potential that exists in burns and river tributaries in its land.
As a Highlands and Islands MSP, I must also mention the Beauly to Denny transmission line. Although we all recognise the need to put in place an infrastructure system that will allow us to get the power generated in the north of the country to the south, the construction of the overhead line remains a real concern for many of my constituents. I continue to take the position that the Government must consider all the latest evidence on the Beauly to Denny power line that has arisen since the inquiry finished, including evidence on the possibility of alternative options to the pylons.
Why is it that the interconnector line from Ayrshire to Ireland does not have to carry the same spare capacity as the lines that are in central and northern Scotland? I would like an answer to that question, if the minister can give it to me.
Today's debate is important, as it concerns the putting in place of a framework that allows for a secure supply of energy for our people and our businesses, which is one of the key responsibilities of any Government. Scotland has massive potential as a provider of renewable energy, but no responsible Government would argue that renewables can provide all the answers. The committee's report contains many useful recommendations, and we look to ministers, working in partnership with the energy industry, to implement them as we deal with the challenges and grasp the opportunities that are presented by our low-carbon future.
I am delighted to take part in this afternoon's debate as the newest member of the Economy, Energy and Tourism Committee. When I became a member of the committee earlier this year, much of the research had already been done and a great deal of the evidence had already been taken, but there were still some areas to cover, as well as three fact-finding visits to be made—to the north of Scotland, to Berlin and to Sweden and Denmark. I will speak about the Berlin visit later.
Before I continue, I would like to put on record my sincere thanks to the committee clerks for their support since I joined the committee, particularly during the energy inquiry. I remember thinking, when Stephen Imrie first gave me my folder of paperwork for the committee, "Well, that's my bedtime reading for the next seven months."
The most obvious issue that came out of the report was nuclear power, and it will come as no surprise that that issue went to the casting vote of the convener and that the votes were split down party lines. I am sure that members of all parties considered the evidence properly but, in the end, we did not deviate from our respective party policies. I do not intend to rerun the debate, as I am sure that that will not progress today's debate any further. I will instead highlight other aspects of the report.
Does the member believe that it is important that the independent study carried out on behalf of the Council of Economic Advisers comes back to Parliament after the Government has considered it so that we can discuss and debate its findings?
I am sure that any report that the Council of Economic Advisers produces will be debated through the proper channels.
At one of the first evidence sessions that I attended as a committee member, we heard evidence from a representative of Community Energy Scotland. I was previously not too aware of what the organisation did, but I was impressed to learn of its activities. Only the week before, I had been contacted by a constituent who had a suggestion for a community energy scheme, and I was in the process of investigating the matter on his behalf. The committee meeting was timely to say the least, and the knowledge that such an organisation exists to assist local groups with energy proposals is vital, as it ensures that normal people can play their part in Scotland's renewable future.
Paragraph 128 of the committee's report concerns the fossil fuel levy. I whole-heartedly agree with our recommendation, which calls on the Scottish and UK Governments to work together to release the £164 million that is currently held with Ofgem. However, there really is no point in this Parliament getting all or even some of that money if the resultant knock-on effect is a reduction in the Scottish consolidated fund. The £164 million would be a massive injection in renewable projects, which would allow Scotland and the UK to go some way towards reaching renewable targets. I was content that the committee did not divide over that issue—I am sure we all agree that Scotland can provide so much more in the way of renewable projects and that, as such, the fossil fuel levy should not be used as a political football.
Paragraph 131 is an important section of the report, as it considers planning applications and the level of consent refusals. In two years, the Scottish Government has approved 26 applications, which are worth 1.8GW of capacity in total, and another 33 applications are being considered. Those figures are significant.
The Scottish Government response that it recognises the need for more renewables projects to be given consent is telling, but the point that stands out is that consent should not be at any price. Our local communities will not thank us, or any elected representative, if projects go ahead on a whim while local concerns are disregarded, irrespective of what the project is. I echo the Scottish Government's response that
"the best applications are those that … take care to resolve environmental and other concerns in advance."
As is the case with other issues that we consider in the chamber, prevention is always better than cure, and I do not see how any party can argue against that response.
I will touch on the carbon capture and storage section in paragraph 140. The committee is fully supportive of the concept of CCS technology, and our recommendation is self-explanatory. I look forward to reading the carbon capture and storage road map when it is published in the autumn.
As I mentioned earlier, a delegation from the committee went to Berlin towards the end of the series of evidence sessions. The primary aim of the visit was to look at the CCS demonstration plant at Schwarze Pumpe. The site visit was fascinating, and all the visits during the two days were extremely interesting and worth while. I came away with a better appreciation of CCS technology and a better understanding of how the authorities in Germany have been tackling and plan to tackle energy issues.
It is obvious that we can no longer allow carbon pollution to continue. All of us, irrespective of political party, must ensure that the legacy that we leave for future generations is far better than that which has been left to us. In effect, we are attempting to clean up the mess that we have inherited.
I commend the report to Parliament for several reasons. First, it is a massive piece of work that has involved pulling together a whole host of information and attempting to break it down for public consumption. Secondly, although I know that the report is not a blueprint for a 100 per cent renewable energy future, I hope that it can be considered to be a framework for what should be possible. Finally, the report has ensured clarity of purpose for the members of the committee and, as the committee's convener said in his opening remarks, it should provide a clear and challenging agenda for Scotland's energy future.
As someone who is not a member of the Economy, Energy and Tourism Committee, I pay tribute to the committee members and the clerking team for putting together a comprehensive report. It comes at a good time, because it is important for us to consider energy policy and our strategy for it, and the report makes an important contribution to that debate.
I worked in the energy sector for a number of years. People who work in the sector sometimes get caught up in buzzwords, such as line loss factors and group correction factors, but looking from a bit more distance it strikes me that there are two key issues: we must produce a secure and efficient energy system that supports the economy, and we must ensure that we have policies that contribute to lower carbon emissions and lower bills, particularly for our pensioners. From that point of view, the report is crucial in that it highlights the importance of a political action plan in relation to energy. It strikes me that, although the minister may have a lot of initiatives and he obviously put a lot of work into the Climate Change (Scotland) Act 2009, we need a bit more speed and urgency in several areas if we are to address concerns about energy in Scotland.
It is important to recognise the importance of energy to the economy. As Lewis Macdonald pointed out, Scotland is a net exporter of electricity via the interconnector to Northern Ireland and down to England. We want to ensure that our electricity system continues to produce surplus energy so that we can export it and, in the process, support the economy and Scottish workers' jobs. From that point of view, it is disappointing that the minister has yet to review the Council of Economic Advisers' report on energy, which can make an important contribution to the debate. I urge the minister to look at that promptly.
As others have said, it is important that we support renewables and get more on stream, but that must be tied to action on the Beauly to Denny line, which is an important part of the link. The Crown Estate has noted that its scheme to bring online 1000MW from the Pentland Firth depends on approval of the Beauly to Denny line. The minister needs to take a decision on that quickly.
There is clear support for new technologies, including carbon capture, but it is important that we have a diverse energy policy. It will be a long time before carbon capture comes fully on stream. On renewables, 60 per cent of the planning applications that have gone to public inquiries have been rejected, so there is concern that we are not getting the newer technologies on stream as quickly as we would like. From that point of view, it is short-sighted to rule out new nuclear. Nuclear provides stability and provides low-carbon energy at a low and competitive cost. It should not be ruled out.
What would the member do with the waste that is generated from nuclear energy?
I do not think that we need to get caught up in that, as there are a number of good international examples that show how waste can be treated. The point is that, if we are considering low-carbon solutions, nuclear power has to be on the table.
The other side of the equation is how we reduce consumption and bring down bills, particularly for pensioners. I was concerned to read in the report Wood Mackenzie's estimate that energy consumption might rise by 10 per cent over a number of years; that must be tackled, particularly given that public buildings account for 40 per cent of what we might call waste. We need to be more efficient and, in that respect, the minister has to give more of a priority to publishing the energy efficiency plan.
I can highlight a number of examples of efficiency in my own constituency. The Rutherglen and Cambuslang Housing Association's use of solar heating panels has been very effective in bringing down heating bills, particularly for pensioners and, with a grant from the climate challenge fund, the Lightburn Elderly Association Project is doing a lot of good work in advising older people on reducing their bills. We must also look at microgeneration and smart meters.
We need to get the policy right. It is important that we have a diverse energy policy and use every mechanism to drive down fuel bills. I urge the minister to hurry up and address some of the issues that have been highlighted in the debate because we need to keep the lights on and get energy bills down.
I want to develop a point that was raised by Iain Smith in his opening speech, and by Lewis Macdonald and Wendy Alexander. In paragraph 141 of its report, the committee
"calls for the Scottish Government to conclude its consultation on section 36 consents as soon as possible and to use this opportunity to drive the development of carbon capture and storage technology."
For the benefit of Gavin Brown, who is absent, I point out that the fact that the Liberal Democrats want to promote 100 per cent renewables does not mean that we turn a blind eye to new technological developments. We share the view that we should be driving the development of CCS. However, I am bound to tell the minister that we have grave reservations about the Government's apparent direction of travel.
We do not want to be luddite about this. In an effort to be constructive, I make it clear that we share the view of the leading environmental organisations in Scotland that the Government must draw a distinction between existing coal-fired and gas-fired stations and new coal-fired and gas-fired stations. For example, we believe that the Longannet proposal is a step in the right direction. Because it is an existing station with an existing level of CO2 emissions from its 2,400MW output, the promotion of CCS technology at that plant could, if it proved to be financially and technologically feasible, contribute substantially to reducing the CO2 content of emissions, and help to prove the technology. It is a possible win-win situation. However, if I have understood the Government's pronouncements on this issue, that would not be the case with a new coal-fired power station. There are two issues to address, and the overarching question is this: given the Government's support for the huge potential for renewable energy, which has been backed by the recent "The Power of Scotland Renewed" report, what is the strategic need and case for a new coal-fired power station?
On a more detailed level, Jim Mather, in response to a parliamentary question that was lodged by Kenny Gibson, indicated that the Government is minded to follow the direction of travel that has been set out in the Department of Energy and Climate Change's consultation paper, which was issued on 17 June. There's the rub: the proposal in that paper was that to qualify as carbon capture ready, a new coal-fired power station would have to demonstrate at the outset that it had a CCS capacity of only 400MW gross. If we apply that thinking to the proposed 1,600MW coal-fired power station at Hunterston, 75 per cent of the CO2 emissions will continue unabated until the technology is proven.
It is no exaggeration to say that the very useful and needed development of CCS technology is almost bound to take 15 to 20 years because, in addition to proving the carbon capture technology, we must prove that commercial-scale storage is possible, whether or not it is in North Sea aquifers. There is the equally challenging business of meeting the standards for storage and transportation of CO2.
If new power stations are built, there will be new emissions. It is impossible to see how that level of unabated emissions can be squared with the targets in the Government's Climate Change (Scotland) Act 2009. There is a real danger that, if the low threshold that I mentioned is applied to new applications, developers will simply exploit that provision to promote new power stations with 75 per cent of their CO2 emissions unabated.
The report contains many excellent suggestions and, as the minister said in his opening remarks, there is a great deal of consensus on many of them. However, as the minister has heard from the opening speakers and from Wendy Alexander and me, there is no consensus on carbon capture and storage, so we look to the minister for clarity on that important issue. I repeat: we are asking for a clear strategic case from the Government on why Scotland needs new coal-fired stations, given all the evidence about our renewables potential. Crucially, we need to know whether, at a commercial scale, the Government will confine the technology to existing stations and therefore prevent unabated CO2 emissions from being unleashed on Scotland. I say to the minister that that latter proposition is unacceptable.
As other members have done, I welcome the report. I do so as a non-member of the Economy, Energy and Tourism Committee. I particularly welcome the emphasis that Iain Smith placed on energy efficiency as a key part of the future strategy if we are to reduce consumption. However, I will focus on generation, and on renewables in particular, and the vital need to exploit more of our renewables potential. I emphasise that that potential provides particular opportunities for my region, the Highlands and Islands, which is blessed with an abundance of land and wind, as well as a coastline with lots of tidal movement and, especially on our west coast, lots of rain. The Highlands and Islands are well placed to make the biggest contribution in the UK to the overall renewables scene.
It is important that the Highlands and Islands plays its full part in contributing to meeting the national needs, as it has done before with hydro schemes in the 1950s and oil production support in the 1970s. Although the area is often characterised as being the beneficiary of national goods, it has an opportunity to make a positive contribution to the nation as a whole. That is not always possible in the wider economy of the Highlands and Islands, so we must take the opportunity with considerable courage and a great deal of commitment. As Wendy Alexander said when she talked about the Copenhagen summit and the days leading up to it, we need to see the big picture, which is that we must contribute as a nation to Europe's and the world's reduction of carbon emissions, and we must do so within our boundaries. We should not simply see in all circumstances the local picture and the local arguments about particular applications.
We must make more of a reality of some of the rhetoric that we hear from Government about renewables. The opportunities are clear, although there are challenges, many of which are technical. Some members have mentioned some of those challenges, such as grid connections and cables.
There are also wider challenges, because the environment that gives the Highlands and Islands the opportunities to contribute is an environment that people want to protect, which is why controversy over particular proposals is so common, whether they involve pylons or onshore wind development, and whether the issue is about habitat or species protection, peatlands or scenic considerations. From a mountaineer's point of view, from that of someone who admires wild land and wants to preserve it, or even from that of the people who simply want to maintain the scenic quality of Scotland, it is nice to think of nothing further intervening in our landscape. The issue generates strong emotions in people. Of course, there are few parts of the Highlands and Islands landscape where humankind has not intervened—deforestation, management of grouse moors, hydro dams, pylons and cables, hill tracks and roads have all intervened in our environment.
In this debate about renewables, it is important to find a balance between the competing interests in our society, but far more renewables opportunities must be realised if we are to make our contribution to world issues, meet our climate-change targets and generate the economic opportunities to which everybody on the committee has pointed.
Wind farms are the most controversial aspect of renewables activity that affects my area, although they have a far bigger part to play than they have been allowed to play so far. In that respect, the siting of wind farms is crucial. It is proper that local councillors or ministers who have been democratically elected make the final decisions. We need to acknowledge that not everywhere is suitable for wind farms, but there must be many suitable potential sites in my area that can be exploited.
There is a disappointing predictability about how battle lines form around specific applications. We must realise potential and ensure that pre-planning application processes are more thorough than they have been thus far so that disagreements and concerns can be resolved before the formal planning stage. I am glad that the committee and the minister, in his response, have acknowledged that.
A big proposal in Lewis was turned down by the Government. It is a lost economic opportunity, not only for the local community but for the nation as a whole. There was also a lost carbon saving opportunity. We cannot keep turning down existing economic opportunities and big schemes such as those if we are to meet our targets.
Debate is currently raging in Shetland about the Viking Energy proposal. There is, in that proposal, huge potential that is of national significance. It would help not just Shetland, but the rest of the nation, become carbon neutral and would provide a long-term revenue stream to the islands, just as oil revenues—which are in danger of diminishing over time—have done in the past. Shetland has taken advantage of oil to transform its economy. Viking Energy is its next big chance. It would be a joint venture, astutely negotiated as we would expect from Shetlanders, with a major electricity company—I see that the Orcadian member is shaking his head in marginal disagreement with that proposition, but that is always the case between Orkney and Shetland. Nonetheless, it would be an astutely negotiated opportunity for Shetland to share in the profits of what could be a major development.
It is a good thing that there is local debate in order to air concerns and to allow people to ask important questions. One's having legitimate questions and concerns, however, does not mean that one always has to oppose the principle of a development. Equally, supporting such a principle does not mean that there is no need to compromise in the proposals, to seek accommodations with objectors and to address legitimate concerns.
Shetland has an enormous opportunity that I hope it can take. If it does not do that in partnership with Viking Energy, as is the current proposal, I predict confidently that the proposals will become a purely private project and the community might not have the same opportunity to access long-term revenue streams. I hope that the community can find a way forward to help itself, to help us as a nation to meet our targets, to be as bold as it was in the 1970s in grasping that opportunity and in seeking to address as many of the legitimate concerns as possible. Ultimately, it might well fall to the minister to make those difficult decisions. I hope that he does so while bearing in mind the importance of the big picture, as Wendy Alexander described, and our need, on the way to Copenhagen, to make a big contribution to dealing with the world's problems.
We move to the wind-up speeches. Liam McArthur has up to eight minutes.
Thank you. That is very generous. I extend my apologies to you, Presiding Officer, to the minister and to Parliament for being absent from the beginning of the debate. I had to attend a meeting on urgent constituency business.
I congratulate the committee on its report. As other members have done, and although I am not a member of the Economy, Energy and Tourism Committee, I recognise not only its excellent work but its commitment to gathering evidence as widely as possible from those who are interested and involved in delivering our energy future. I know that the committee's visit to my constituency was very well received. It is acknowledged that the words "I'm from the Government and I'm here to help" can chill the blood of even the boldest of business leaders, but it appears that the words "I'm from the Parliament and I'm here to listen" can at times act like a healing balm.
Parliament's willingness to listen goes some way towards explaining the broad welcome that the report's recommendations have received. As Iain Smith suggested, the focus on delivery rather than on prognosis is refreshing, and it was absolutely right to highlight efficiency maximisation, environmental sustainability, social justice and wealth and employment.
It is also gratifying to note the committee's calls for a ban on new nuclear power in Scotland, the urgent publication of the Government's energy efficiency action plan, a dedicated research and development fund for wave and tidal energy research, scaled-up action on fuel poverty, and the decentralisation of the supply network. Those are all long-standing items on the Liberal Democrat agenda on energy. However, I heed the warning in SSE's briefing for this debate that delivery of energy objectives cannot be treated as a political football. Robust debate is certainly needed, but I know from talking to, for example, marine energy developers that agreement across the parties on the importance of the sector, and on renewables as a whole, is a valued asset. In effect, such agreement de-risks a process that already has its fair share of attached risks. In that regard, I welcome the Cabinet Secretary for Finance and Sustainable Growth's consistent acknowledgment of his predecessors' work on delivering the objective of creating a renewables powerhouse in Scotland. I will return to that shortly.
As Peter Peacock, Patrick Harvie and others did, I applaud the committee's decision to put energy efficiency at the centre of its vision for Scotland's energy future. The benefits of not only reducing harmful emissions but of cutting costs and tackling fuel poverty make that a win-win-win approach. As Iain Smith said, there is now broad agreement that reducing our energy demand is crucial to delivery of our energy objectives, and that reducing our energy demand can no longer be seen as the Cinderella of the energy debate.
In responding to the committee, ministers have claimed that those points will be addressed in an energy efficiency action plan. That is a sensible approach, but it begs the question why ministers still have to publish their plan at this stage, despite Mr Mather's claim back in March 2007 that it would be an early priority. Now that we have a reassurance in the Government's response to the committee, I hope that we can comfort ourselves as we brace ourselves for the early autumn with knowing that the plan will be with us very soon.
I hope that in the plan, as well as setting out how the public sector will take a more ambitious lead and how the significant emissions contribution of non-domestic buildings can be reined in, ministers will address failures in the home insulation programme. The committee called for a scaling up of that effort. The home insulation scheme has been described as having been set up to fail. The budget was slashed in half during a very public falling out between Mr Swinney and Mr Patrick Harvie, and it seems that match funding for the scheme has failed to materialise. That is a concern, but Wendy Alexander has made it clear that the task ahead is of an altogether greater magnitude.
The committee was right to place heavy emphasis on Scotland's renewables potential. Scotland is well placed in respect of its natural resources and expertise, but serious challenges remain. I have made it clear for a long time that we need to build on the success of the wave and tidal energy scheme, which my colleague Nicol Stephen introduced. The lack of access to a dedicated marine research and development scheme is acknowledged by the committee and the Government's advisers as being a serious inhibitor to development of the sector. In the past, ministers have claimed that WATES money is still available, but under cross-examination, they have been unable to quantify that money or explain how it can be accessed. The Government cannot ignore any longer the marine energy group's call for a flexible, use-it-or-lose-it fund. I hope that an early decision on that will be taken.
The grid remains a major concern for everyone who is involved in the sector. I echo the calls of Iain Smith, Wendy Alexander and others for an early positive decision on the Beauly to Denny line. I whole-heartedly endorse the committee's call for subsea cables to the islands. It has also called for extended bootstraps down the east and west coasts and the development of a North Sea supergrid. I acknowledge the Government's commitment to those objectives, but caution that we cannot wait until the electricity is ready to flow before we put those things in place. I am also happy to echo the calls of the committee, ministers, Scottish Power, SSE, local authorities such as Orkney Islands Council and many others relating to the iniquitous charging regime for transmission. That regime must be reformed if we are truly to unlock our renewables potential.
The report's focus on supply chain issues is also welcome, although ministers have rather belatedly turned their attention to that matter. There must be substantive work on that—there cannot be merely a desk-based exercise. In that context, I was concerned that, far from being invited to comment, some of the experts in my constituency were not even made aware of the exercise.
Iain Smith highlighted the need for a more decentralised model of generation that can empower individuals, businesses and communities to a far greater extent than is the case at present. Smart meters and smart grids have roles to play, as do feed-in tariffs. I was pleased to see that the UK Energy Act 2008 has given the green light to those.
However, more attention must be paid to how we capture the benefit of renewables developments, both onshore and offshore, for communities. I assure Peter Peacock that even we Orcadians acknowledge the wily negotiating skills of our colleagues up in Shetland. Planning needs to be made as efficient as possible, but where individuals and communities take decisions in their interests and for their long-term benefit, planning issues can be resolved more readily.
As Iain Smith suggested, a decentralised model would open up significant opportunities in relation to renewable heat. I welcome the Government's commitment to heat mapping, but the climate change delivery plan must take urgent steps to ensure that greater incentives are provided to develop community CHP schemes across the country. From the evidence that was taken by the committee, it is clear that we have much to learn from others—notably, the Danes. It is regrettable that earlier this year the Government chose to back Green Party calls to rule out for the future energy-from-waste plants.
It is unrealistic to expect a transition away from fossil fuels in the short term. Abatement and decarbonisation of existing energy sources will be necessary. CCS presents real opportunities, but it is not a "Get out of jail free" card; it must be applied robustly and demonstrated at scale. The points that Ross Finnie made in relation to Longannet and Hunterston were valid. In passing, I congratulate my colleague Chris Davies MEP on his efforts in securing funding at European Union level for demonstration roll-out.
This has been a good and constructive debate. On the whole, members have taken up the challenge from the committee and Ian Marchant to focus on how, rather than on what, we deliver. The minister has his work cut out in the months leading up to Copenhagen and beyond, but I hope that he feels assured that he has Parliament's support and can draw on the findings of the Economy, Energy and Tourism Committee's report in that work.
I can offer all closing speakers nearly two minutes more than they were offered previously. They are welcome to take up that time, if possible.
That is one opportunity that I cannot resist, Presiding Officer. I hope that by the end of my speech you will not have to tell me to shut up and sit down.
It is inevitable.
Hear, hear.
I discover that that is a popular idea.
Today's debate affords us the chance to talk about energy issues. We used to discuss them a lot in the Parliament, but we have done so less in recent years. The committee's report gives us an opportunity to look at work that has been done in great depth.
As a substitute member of the committee, I have attended only one of its meetings—that which took place in the city chambers in Aberdeen. At the meeting, members were given the opportunity to talk to, question and consult representatives of the Aberdeen-based energy sector, and were reminded that energy is, and has been for many years, one of Scotland's strong suits. I left the discussion with the worry that our oil and gas industry may now be so specialised in its outlook that its appetite to expand into other areas of energy production is not as great as its appetite to expand into oil and gas production in other areas. The minister must face that challenge. There is an enormous amount of expertise here in Scotland. We must ensure that it is used not only to exploit the resources that we know we have but to exploit the resources that, technologically, we must yet find ways of exploiting. Nevertheless, the meeting was a good opportunity for me to see at first hand how the committee works. I commend it on the way in which it conducted its inquiry.
Today, we have an opportunity to discuss the detail of the report. There is a great deal of common ground on which we all agree. Right at the top of my list of priorities is energy efficiency. As we have heard, energy efficiency is, of course, the easiest way to cut emissions. As members have pointed out—and deservedly so—building standards are a key element in achieving energy efficiency over time.
The committee discussed a range of issues, many of which we agreed on, although the issue that I intend to finish on is one that we may not agree on. Government has admitted the need for baseload capacity in Scotland's electricity generation—a concession that set an argument running today—while pursuing carbon capture and storage as the solution. Wendy Alexander and Ross Finnie spoke eloquently on the need for the Government to clarify exactly how, given its preferred solution, it expects to achieve its objectives.
I will embark on a more general tour of the debate. Members raised extremely important issues, including decentralisation of energy supply, the concept of which I fully support. However, some members confuse the idea: they think that a wind turbine development in the Western Isles or Pentland Firth amounts to decentralisation of energy production, but the two things are not the same. Closing a major power station in central Scotland and replacing it with 500 wind turbines in the north of Scotland is simply centralisation, albeit in another place. Decentralisation is much more than that: it is about placing energy production in the heart of communities. That will allow us to pursue developments such as combined heat and power, which is being done well in Aberdeen and could be done better and more efficiently in other areas of Scotland.
I was going to say what I am about to say even if Christopher Harvie was not present, but I am delighted that he has returned to the chamber to hear it. From his remarks, it was obvious that Christopher knows that I have noted his tendency to mention Germany. Indeed, in just about every contribution that he makes in the chamber, he mentions Germany. I do not have a problem with that. I simply remarked in a previous debate that I had noted that fact. Germany is a place where there has been great innovation and there have been courageous moves over many years. That has continued even into this very week with the return of a conservative Government. It cannot all be wrong.
Does the member recognise that the Free Democratic Party, which is the sister party to the Liberal Democrats, made the biggest gain in the general election? Surely that suggests a return to Liberalism.
A trend that I am sure will not continue in this country.
In closing, I turn to the issue that has provoked much debate: how to achieve baseload capacity without contributing to carbon dioxide emissions. Efficiency is the highest priority. That said, if we require baseload capacity in future—as the Government appears to concede in its national planning framework—we have to consider nuclear energy. Members will find nothing new in that statement; I have said it on many occasions. The irony is that members of some political parties will not consider replacing our nuclear power stations but they expect to extend the lifetimes of those stations as long as possible to take advantage of the cheap carbon-free electricity that they supply. That position is short-sighted and inappropriate. If we replaced our two existing nuclear power stations the new stations would be cleaner, safer and more efficient than the current ones. Also, the new stations would have an up-front carbon emission load, and by 2050 would be producing safe, clean electricity with virtually zero carbon emissions.
Will the member give way?
I am coming to my closing remarks.
I will deal once more with the issue of nuclear waste. We have a problem with historic nuclear waste, due to the early days of our energy programmes, but there is also a military component and even a medical component, because our health service produces nuclear waste. However, a new generation of nuclear power stations will add insignificantly to that problem of nuclear waste and make it no harder to solve than it is today. We should not and cannot afford to miss this opportunity. If we do so because of this Government's determination to pursue a dogmatic line, it will result in Scotland becoming a country that is hamstrung by its dependence on a single energy source.
Like all members who have spoken in this debate, I congratulate the convener and committee members and I commend the clerks for their hard work in pulling together a very substantial report. I never fail to be impressed by the volume and quality of the work that comes into the chamber from the committees. When we consider the length of the inquiry—12 months—and the fact that evidence was taken from 120 witnesses, it is no surprise that we have such a substantial document in front of us.
My colleague Lewis Macdonald started his speech by saying that almost every witness who offered evidence to the inquiry said that the energy policy should be about lower carbon emissions and higher energy security, and the delivery of energy at the least cost to consumers with the greatest benefit to the economy. That sums up this afternoon's debate, which has been of high quality. It will be clear to those outside the Parliament that there is a lot of enthusiasm—even if there is not always 100 per cent agreement on how we get there—for ensuring that Scotland is a key player in the global energy industry and that security of energy supply is at the centre of our sustainable economic growth.
Iain Smith outlined the vision that has come out of the committee's report. It is an exciting vision, but also a challenging one. One of the key figures that Iain Smith mentioned, which I had not fully comprehended before, is the level of energy waste—65 per cent of our heat generated by electricity is lost. That is one of the biggest challenges facing us.
I repeat the point that every chemical engineer has to repeat occasionally: when we run a thermal cycle power station, two thirds of the heat is not lost or wasted; it is simply a necessary by-product of that cycle, although we have to accept that it can be used in CHP processes.
My understanding of Iain Smith's point is that it is also about energy loss within the domestic market and from houses.
Energy efficiency is obviously central to addressing fuel poverty, and microgeneration is central to addressing energy efficiency. Wendy Alexander outlined the important role that microgeneration could play. Microgeneration is a key aspect of future energy use, but affordability is an issue, which is why the council tax rebate for microgeneration that Wendy Alexander spoke about deserves serious consideration.
I hope that the Climate Change (Scotland) Act 2009 will address some of the serious planning issues that have impacted negatively on microgeneration projects. I was disturbed to discover recently some of the difficulties faced by families in gaining planning permission to install, for example, air-source heat pumps. There have been issues about noise and where pumps can be located. Many such practical difficulties prevent people from taking the first step into the realm of microgeneration. We must remember that although there are many microgeneration proposals and that the technologies are available, the costs are somewhat prohibitive. Individuals have big outlays, but the returns through lower energy costs and cheaper bills are much further into the future. It is difficult to manage when they have to pay out a lot of money initially.
Alex Johnstone addressed nuclear power when he summed up. He made some interesting points, but I point out that, as far as we have been led to believe, the issue is being addressed by the Council of Economic Advisers.
In response to a point that Gavin Brown made in an intervention during the minister's opening speech, Mr Mather indicated that the independent report commissioned by the Council of Economic Advisers is now with the Scottish Government. If that is the case, it would be useful if the minister, when summing up, provided a bit more detail on the timescales. When will the Scottish Government consider the report? When will the Council of Economic Advisers consider it? When will we in the Parliament get an opportunity—either in the chamber or in committee—to discuss its findings in more detail? I believe that the report will make an important contribution to the energy policies that are developed in the future. The findings of that report are not just important for the Parliament; it is important that industry knows about them quickly. If industry understands what future energy priorities will be, it will be able to start making the investment decisions that are necessary for the longer term now.
I am a colleague of Christopher Harvie in the region of Mid Scotland and Fife, and I am familiar with his grasp of new technologies. I have listened to him intently on many occasions, and I have heard a lot of his ideas. I do not think that you heard his speech, Presiding Officer, but I am afraid that I will need a longer conversation with him outside the chamber about what he said. I certainly intend to follow that up at some point.
We have had a good discussion about carbon capture and storage and some of the ideological issues around it. It is not fully proven in practical terms, but there is much anticipation of what the technology could do. I have been fortunate to visit Longannet and to see at first hand what CCS would mean for the area and the work that Scottish Power is doing there. Developing a brownfield site and extending the lifespan of a station that is already in place is a preferable approach in terms of sustainability, existing resources, the existing workforce and local appreciation of the work that is carried out at Longannet.
I was initially a bit confused by Jim Hume's explanation of the Liberal Democrats' position on carbon capture, but Ross Finnie provided an explanation. There is a debate to be had about greenfield sites versus brownfield sites.
I want to discuss what carbon capture and storage means for the workforce, and how it relates to skills, apprenticeships and the retraining of workers who are already in the sector, which is vital to ensuring that Scotland gets the full benefit from the industry. Supporting the energy industry is not just about security of supply; it is also about security of employment. We have some excellent employers in the energy industry in Scotland, and they should continue to play a positive role in developing skills across the industry. I recently met some new apprentices who had been taken on by Scottish and Southern Energy. After meeting them, I felt that they believed that they were on the cusp of embarking on an exciting career in the sector. We want to promote that here in the Parliament, with further support from the Scottish Government.
OPITO, the Oil and Gas Academy, provides a model that has been considered by other sectors, including the finance and information technology sectors. OPITO is currently developing standards across the oil and gas industry globally. There are opportunities for Scotland to play a much more positive role in global terms.
For me, the debate is about security of energy supply and tackling fuel poverty, but it is also about ensuring that there is employment, that there are manufacturing spin-offs from the renewables sector, and that we, as a country, do not just use energy but continue to be a net exporter of energy in the future.
The overall tone and content of the debate have been supportive of the general direction on which the Government and the Economy, Energy and Tourism Committee are converging. That is appropriate, given that the matter at hand is of such huge importance to Scotland. We have the best possible motivations to continue in that spirit, and I will endeavour to do so.
It has been good to hear today from so many members who are actively engaged in and well informed about energy matters. Their hard work and commitment have been evident in the depth of their contributions. It is good to get all this on the record, as it gives my officials and me the opportunity to engage with the issues that have been raised and to get the benefit of committee members' thinking as it has developed from the generation of the report and the receipt of responses, the committee's further interactions and the reactions gleaned from other sources. We have a pretty substantial new to-do list of actions that require responses—I lost count after 60—which is proof that there is a rich flow of ideas on the subject.
Lewis Macdonald talked about CCS. The belief that we can deliver on CCS in the context of Scotland's geology, skills base and academic capability is important. We have people such as Stuart Hazeldine at the Scottish centre for carbon storage—that is all good stuff.
Members called for WATES 2. The issue is being considered, but members should remember that WATES 1 is still working through. We should also remember that we have EMEC, the Saltire prize, the co-ordination of the sector to produce the route map, the Carbon Trust's marine energy accelerator and the new DECC fund of £22 million. There are also the budget conversations that we can have going forward.
I appreciate what the minister said and echo Iain Smith's welcome of much of that activity. In the past, the minister referred to an underspend in the existing WATES programme but could not identify where it was and how it might be released and accessed. Can he shed more light on that?
What I can say is that there is high-quality engagement between my officials and the marine energy group, which will continue and is being fed through, to answer questions not just from the committee but from the Scottish energy advisory board and FREDS.
Wendy Alexander and Ross Finnie also talked about carbon capture and storage. It is important to recognise that the technology exists and is getting strong market signals. There is strong competition, and companies such as Alstom, Aker and—here in Scotland—Doosan Babcock Energy are contributing materially, for example through oxyfuel burning, which takes 50 per cent of the gases out of the equation. China is also making strong declarations of intent.
I ask members to accept that we are very supportive of CCS technology. I take the point that Ross Finnie made about Longannet, but we must ensure that we support the UK Government in consulting on various aspects vis-à-vis standards and policy. It makes sense to ensure that the Scottish position is aligned with that of the UK before we issue thermal guidance, so that there can be clear paths for development.
I understand all that and I hope that I made clear that we are supportive of the technology. However, with all due respect, the direction of travel for the UK is for it to be acceptable that a 1,600MW station should have a CCS capacity of only 25 per cent. Is the minister suggesting that he will simply align himself with such a policy, irrespective of its implications in relation to the Climate Change (Scotland) Act 2009?
That is indeed the current position, but we are giving serious consideration to the debate and to all the options. I will always want to optimise Scotland's position from an environmental and an energy perspective.
Tory members mentioned the nuclear issue. The key point is that when we consider the cost of building, managing, decommissioning and managing waste, we find that the state always ends up paying. A pound spent on nuclear is a pound that we cannot spend on renewables. We must look to the balance of Scottish payments and to the capturing of the 60GW or more of renewable energy that we have.
Mr Brown mentioned the slow pace on the energy efficiency action plan and I admit that the plan has taken slightly longer to prepare than we expected. The key factor in that regard is the late changes to interim targets on emissions that made the 2009 act significantly more ambitious. We have had to factor the issue into the process—and rightly so.
The fast-moving world that we are in is producing considerable developments. Nowhere was that more obvious than in Christopher Harvie's announcement of the intermediate technology from Volkswagen. I happen to think that that might have some merit. It is indicative of the revolution that is taking place. Any member who goes to the all-energy conference or even to a British Wave Energy Association event can see the momentous nature of the change. Lots of ideas and technologies are coming forward, but it begins to be extremely interesting when the technology comes from a prestigious stable such as Volkswagen and when the talk is of 92 per cent efficiency.
It is also extremely interesting for a refugee from the information technology world such as me when the talk is of a propensity to network the technology. I saw the same thing happen before in IT. There was not much macro planning but it happened because motivated people did their bit at different levels. That links to the comments that members such as James Kelly, Liam McArthur and Alex Johnstone made about community and constituency examples and even to Christopher Harvie talking about walking and bikes. The exciting thing for me is that, as the energy efficiency action plan kicks in and as more happens on microrenewables, the ingenuity and inventiveness of individual people, communities and small businesses could take us to a dramatically different place.
I will walk in the footsteps of some of the committee's visits and head for Bremerhaven in October. I will also meet German ministers when they are here in Scotland.
Stuart McMillan commented on the fossil fuel levy. That money has a material capacity to provide a major injection that supports UK, Scottish and European climate change and renewable energy targets. I have been told that the latest count is that the £150 million is now more than £170 million. The intention exists and I have given a clear understanding of the structure that we bring to the matter. We take a systematic approach to it and are engaging on the specific issues. We treat it as my department's absolute priority and regard energy as a key element in Scotland's economic recovery. We are playing to our strengths—strengths that are rooted here.
We are delighted that Ofgem has an increased presence in Scotland with its new offices in Glasgow and are keen to make more of that presence, especially on grid matters. We are keen to ensure that we get a better deal on grid.
Some forceful words were used about the transmission charges, mainly by our Liberal Democrat colleagues: "ludicrous", "discriminatory" and "unacceptable". Liam McArthur called them "iniquitous". I share that view and am pleased that we have had the chance to reiterate the point that Ofgem's and National Grid's current locational charging approach unfairly penalises energy generation from Scotland and renewable generation in particular. We have invited them to explain how their approach complies with the EU directive. I will put on the record what that directive says:
"Member States shall ensure that the charging of transmission and distribution fees does not discriminate against electricity from renewable energy sources, including in particular electricity from renewable energy sources produced in peripheral regions, such as island regions and regions of low population density."
We need to reconcile that, although I acknowledge that there has been some movement by National Grid. We welcome its recognition that locational charges unfairly impact on wind energy and the fact that it has signalled a move towards a system that makes progress on the matter.
We are revamping our connection with DECC, Ofgem and National Grid and maintaining our connection with Europe. I am delighted that Andris Piebalgs—the continuity figure—is back as energy commissioner and that Georg Adamowitsch is the European grid co-ordinator. He is another continuity figure.
There is much more to do, but we have enormous comparative advantages in Scotland on energy. We are keen to ensure that it works and that we deliver to the full potential of Scotland's energy future. The committee report has helped and I welcome the input of the debate, which we will study at length and in detail.
The determination of the debate on Scotland's energy future has been that there are choices to make. The committee has considered a variety of choices that Scotland can make and what needs to be done quickly. As the committee convener, Iain Smith, pointed out, we are part of a European energy market and it is important to see Scotland within that area of potential.
I argued in the committee that, in presenting the issue, we need to provide timelines for delivery that allow the public to understand what is possible within a given timescale. To take an obvious example, among marine renewables, offshore wind is the first technology that can be achieved within the next 10 years. Tidal energy and wave energy, which are being developed, will follow on from that. Therefore, it could be possible for us to have 180 offshore wind towers in the Moray Firth—and another group of a similar size off Inchcape—producing steady power for the grid in a shorter period of time than it would take to build a new nuclear power station. Given that change in the scale of what can be produced, people need to understand those timelines when they discuss fuel security and the like. Therefore, the committee's determination that Scotland's renewable energy sources are the main routes to follow is the correct decision.
Many members have highlighted the need for incentives, but few—apart perhaps from Peter Peacock—have mentioned the issue of community benefit. I raised the matter in the committee. Paragraph 124 of the report calls on the minister to consider whether the oil funds of Shetland and Orkney could be replicated for renewable energy developments. Such benefit must be based on throughput. If a particular island or part of land hosts some form of energy production, the place should gain some benefit from doing so. We need to work out a better way of doing that than planning gain, which is what we have at present. Such a system has yet to be developed, so I look forward to hearing how the Government will address that issue in future.
Among the bodies that we need to work with, the Crown Estate is important because it can play a key role in the development of offshore schemes. The Crown Estate points out that it cannot make final decisions on offshore wind until the Government has carried out the strategic environmental assessments, which it is hoped will be available in early 2010; I hope that they arrive on time. The Crown Estate also says that it has been involved in detailed and confidential evaluations with the firms that will take forward tidal and wave projects in the Pentland Firth. To allow that infrastructure to be built and the machines that will capture wave and tidal power to be developed, it is essential that the Crown Estate comes to a decision quickly on which firms it will enter into an agreement with. We must know those before the end of the year. Any hints that progress could be slower will hold up the process of achieving our desired aim.
The subject of Ofgem's approach to grid charges has been mentioned by many members. The committee believes that the Beauly to Denny line will play an important and central part in delivering much of the energy from the north of Scotland, so the decision on the line is awaited with great interest. On the issue of competition, it is important to reiterate the minister's point that it is clear that European competition law should not give rise to any kind of infraction proceedings. Therefore, we must ask whether the Scottish Government will now press that issue and whether the British Government will respond as quickly as possible. Highlands and Islands Enterprise points out, in relation to the production of energy from renewables in the north, that
"Renewable electricity in Scotland accounts for around 2% of installed capacity in the UK but contributes 16% of transmission charges".
Indeed, HIE continues:
"GB's charging methodology does not sit well within the context of neighbouring Member State charging regimes. It is much more expensive to send power from Scotland to England than it is from France to England. This is counter to moves, of which the UK is supportive, of promoting interconnectedness and a single European energy market."
That is why we need to view the Scottish process in a European context and call Europe's competition law in our aid.
Members such as Wendy Alexander and Ross Finnie have explored carbon capture and storage, and the minister has responded. There is a general feeling that carbon capture and storage fits. The committee is in favour of it, and we look forward to the Government progressing what is a strong recommendation from across the Parliament.
Another area that we discussed was planning skills. We were appalled to find that too many councils were incapable of providing reasoned argument on how proposals for onshore wind farms, for example, would be dealt with when it came to the crunch. We believe that pre-planning processes must be instituted and that councils in Scotland must share skills. Means must be made available whereby the concerns that people have about public hearings rejecting proposals can be diminished as a result of a change in the process. The evidence that the committee heard shows that it is essential that action is taken on that.
We have heard about the Government's intention to consolidate the planning guidance. In principle, that is much to be welcomed, but does the member share the concern that if we simply strip away some of the detail from the existing guidance, we risk creating more uncertainty and more scope for dispute, both on renewables and more widely?
The Government will be able to give the member a direct answer to that. I believe that there is a desire for a streamlined process, as opposed to one that does not take into account communities' interests and the social justice issues that they embody.
A major part of the debate has been about energy efficiency, which must be to the fore. Our committee unanimously agreed to that. I am glad that the Government has responded, for example by carrying out a heat mapping exercise with Highland Council. Although most people in the Highlands live in towns, as I have pointed out on previous occasions, there is an element of countryside living as well. Such action shows the Government's intent to ensure that progress is made.
The fossil fuel levy is an issue on which we all agree. The £164 million that sits in Ofgem's account can be released by the Treasury only if it is offset against the block grant. We should campaign for that position to change. Just think what we could do with that money to invest in the energy efficiency that everyone wants. I believe that the committee's view on that is unanimous.
Will the member give way?
I am sorry, but I do not have time.
I want to make some points in a more personal capacity. The opportunity that exists for the Highlands is encapsulated by the future availability of the Beauly to Denny line. Once it has been installed, the north of Scotland, which in the past has lost out because, as Peter Peacock said, it has been seen as an area that has been a recipient of funds, can be a huge contributor. The committee was extremely pleased to see that people in Orkney, Caithness and other parts of the Highlands were ready to take part in that process. Energy is being instilled in communities that might have been seen to be past their sell-by date but which are now seen to be at the cutting edge of Scottish society, in that they are able to take forward work that is of national and international importance.
The committee saw that if developments such as those in the Pentland Firth are to proceed, we must get the harbours and the other transport infrastructure in place in time. I believe that we can now argue in favour of getting such work done ahead of the curve, because that will determine what we put in the sea.
A wide-ranging debate has taken place. We have the clerks, the members of the committee, all the witnesses, the minister and the Government to thank for that. We all share a determination to ensure the delivery of the sustainable energy that we all support. Today's debate has played a major part in taking forward a united voice in that regard.