Official Report 227KB pdf
Welcome to the 15th meeting of the Economy, Energy and Tourism Committee in 2009. This is the penultimate session in our energy inquiry, and the first of two sessions with the Minister for Enterprise, Energy and Tourism. At this session, we intend to look at the Government's overall energy policy and the wider picture. At the next session, we will focus on some of the areas in which the committee is considering making recommendations in its final report.
I introduce David Rennie, Colin Imrie and Sue Kearns. Jamie Hume will undoubtedly be here—I suspect that the vagaries of ScotRail have snarled him up.
Thank you for those opening remarks. On waste, we have the reduce, reuse, recycle hierarchy. What is the energy hierarchy? What are the priorities—in order?
In Scotland, we have set out a clear strategy for the future—renewable energy and clean use of fossil fuels—and have in place our 10 pledges. We are involved in long, extensive and open-ended dialogue with all stakeholders, from developers and energy companies through to environmental campaigners. That dialogue is liable to create its own self-ordering dynamic.
On the issue of how you set about delivering on energy, the key sector report, which you circulated to the committee yesterday afternoon, indicates that the Government has established a Scottish energy advisory board and that the first meeting of the board took place in May 2009. Will you give a little more detail on that? Who is on the board and what is discussed? Is there anything else you can tell us?
It is happening this morning.
So it has not taken place already.
It is a synchronised activity. Were I not here this morning, I would be there.
Thank you for that information. I do not think that you mentioned anybody who is involved in energy efficiency on that list. Is there representation on energy efficiency?
Jim McDonald, Stephen Boyd, Councillor Alison Hay, Maf Smith and various others are well capable of representing that issue. I honestly believe that the First Minister's passion for that will carry through. The energy efficiency argument is very much at the forefront of people's minds. There is a clear economic opportunity, in that, during a period in which there could be fewer private sector house building starts, our construction industry might be able to flex and to channel resources into that arena.
You have also indicated that there will be three minister-led energy theme groups. There will be one on oil and gas, one on renewables—building on the work of the forum for renewable energy development in Scotland—and one on thermal generation and carbon capture and storage. I hope that you give us more details of those in due course.
We will.
However, energy efficiency is again missing. Why is there no theme group on that?
There is an issue of focus. Energy efficiency will permeate all the groups, which is perfectly right and seemly. I will chair the three groups, and I will ensure that that happens.
Given what you have said, I find it odd that you have not included in the Scottish energy advisory board anyone from the energy efficiency sector, the house building sector or the materials and manufacturing sector. As for generation, you have good representation from one or two sectors, but there is no representation from the nuclear energy sector, which is and will continue to be a part of the picture for a number of years.
That is true, but the board is very much about looking to the future, which we have very clearly mapped out.
The broader the input from the energy sector, the better. As we have mentioned, there are a couple of fairly glaring omissions from the advisory board. We might well return to these issues in a couple of weeks' time when we speak to you again and when we have had time to absorb some of the information.
We will consider your comments.
Like you, I am fully in favour of optimising systems. In two of the three areas in which you have ministerial-led theme groups, we already have very effective bodies, such as the UK-level PILOT task force for oil and gas and, at a Scottish level, the forum for renewable energy development in Scotland. What relationship will the new advisory board have with those two organisations?
It will feed into what is going on. Last year, David Rennie and I ran an event in your home town of Aberdeen that included a three-hour session with 40 representatives of the oil and gas industry. They were very much engaged and we had a highly energised meeting in which we built up a common picture of issues and potential. A couple of days later, we had a meeting with PILOT at which we gave feedback on that session. Of course, many of the people who had been in the room for the session in Aberdeen were also at the PILOT meeting. The fact is that in Scotland we have a number of new approaches that are bringing energy to PILOT.
I hear what you are saying. Having attended PILOT meetings, I understand how the process works. It is a forum in which industry and Government come together around the table to discuss both reserved and devolved issues. In that regard, I am curious about how the advisory board's establishment will affect your role in PILOT, the Scottish Government's relationship with the industry in that wider forum and the leadership that FREDS has successfully delivered over the past five years. Will the role that FREDS plays in renewables change as a result?
It will mean that I will attend PILOT meetings even better informed. We have been closely involved with the broad spectrum of the energy industry and with PILOT in relation to oil and gas. I recently attended the Houston offshore technology conference, supporting individual Scottish members and getting a lot of information from them, and I have attended UK Trade and Investment events and heard from a first-class panel of global significance about what is happening.
You have described how you see that relationship developing in relation to oil and gas. What is the intention in relation to renewables, for which you have ministerial responsibility? Will it be FREDS or the energy advisory board that is the leading force in Government-industry relationships?
They are all part of a whole. I am always a bit nervous of using the word "or"—it is such a small word; I prefer the word "and". Together we can build a situation in which we start to use the energy advisory board, which clearly has more structure now, as a vehicle to ensure that there is a transfer between the individual sub-sectors.
But surely the industry needs to know the answer to the "or" question? If the renewables industry wants to know where to take a steer on Government policy, does it go to the energy advisory board or to FREDS? Which one will give it that steer?
The function is really an issue of bandwidth. FREDS focuses exclusively on renewables, so it crunches through a huge amount of data. I would expect FREDS and the industry to escalate an issue up to the energy advisory board as and when that is the right thing to do.
So FREDS will report to the energy advisory board.
That is overformalising the situation—it is unhelpful to put it in that way.
This is clearly new information for the committee, but it is important that we understand what you envisage the relationship between FREDS and the energy advisory board to be. If FREDS is not reporting to the board, what is the relationship?
The relationship is a component of us all being involved in trying to optimise the energy sector in Scotland. That parity of esteem, that joint-and-several approach and that ability to specialise and focus on a narrower remit all add to that dynamic. I am happy for it to evolve on that basis.
Perhaps we could hear more about your vision of the structure of how that relationship will work when we next speak to you, because I am uncertain as to how you envisage it working.
I hear and respect your view on that. We will ponder what you have said and return with feedback, having considered the matter internally. I am out there day and daily seeing the good will that exists in the energy sector towards optimising it for Scotland's benefit and the enlightened self-interest of the players. I am confident that people are working towards a unifying goal of increased sustainable growth in Scotland; I am keen that we do that in a way that encourages the most collegiate and collaborative approach possible. Putting the energy advisory board in place helps rather than hinders that, to a huge extent.
It was helpful to have your opening introduction and something of an overview of policy.
Taken on board.
In September, your officials presented us with an overview of energy policy and it is my understanding that you are revising that and looking to bring forward an updated version of that overview of energy policy. When might that be available to the committee?
It will come forward in due course and will be very much informed by the committee. The committee is doing a lot of valuable work and we need to take account of that and other consultations and activities that are also taking place. I do not think anybody who has been an observer of energy in the UK or globally would say anything other than that it is a constantly evolving position.
It has not done the Bank of Scotland a terrible amount of good.
That may or may not be the case. I would take issue with you on that. We have done very well in the past with silicon glen, from which we have a big legacy of expertise, but I do not want to deviate or digress. The key point is that we must keep our finger on the pulse of a very rapidly evolving sector, in which the Parliament, the Government and the committee are having a big impact on the evolutionary process.
I appreciate the point. Do I understand that you do not expect the refreshed version of the overview to be available in the next two or three weeks?
Not in the next two or three weeks.
It is simply to understand whether that will inform our considerations.
It is important that we take on board where the committee is at on that.
It would be helpful for the committee to have a breakdown of the remits and responsibilities of the advisory board and the theme groups, so that we can be clear how they and FREDS fit into the whole picture.
FREDS is clearly the renewables theme group—let us get that on the record. That is the role of FREDS, so it is a major continuity factor in the overall energy strategy.
Do I understand correctly that when the press release talks about a renewables theme group led by a minister as part of the energy advisory board, it is actually talking about FREDS?
Yes.
I do not think that it says so.
We are saying that now and we will make it clear—it is the baby in the bath water.
Perhaps the minister could write to the committee to clarify the remits and the responsibilities of those bodies. That would be very helpful.
On the last point, although the minister was unable to attend the last FREDS meeting, the proposal was discussed at that meeting in those terms.
I return to the theme of energy efficiency. When the convener asked you about the hierarchy of energy needs, you did not mention energy efficiency. When asked about the hierarchy, every witness who has given evidence to us mentioned energy efficiency first. I take what you say about your seriousness about this, but what has been the Government's response to the Audit Scotland report on energy efficiency? It was pretty scathing about central Government in particular, in which only 36 per cent of departments had any energy efficiency plan and in which emissions increased over a period of two or three years. If the Government is going to show leadership, what actions is it taking in response to that Audit Scotland report?
I understand that that report has been taken very much to heart and that we can expect to see actions to remedy it. It is not a core function of my portfolio, but we expect to see that addressed and I look forward to that happening.
There has been correspondence between the Public Audit Committee and the permanent secretary on the follow-up to the Audit Scotland report. An undertaking has been given that the follow-up in relation to the public sector will be part of the energy efficiency action plan that is being prepared. At the first meeting of the high-level delivery group involving public sector partners both within and outside the Scottish Government, including COSLA and the non-departmental public bodies, it was agreed that that body will work with the team that is preparing the energy efficiency action plan to ensure that the approach that is taken will deliver the objectives that are set out in the Audit Scotland report.
It would be helpful for the committee to have sight of any correspondence or plans.
That will be on 27 May, which is two weeks away. I am sure that we can submit something by then. Colin Imrie can perhaps say more about it.
The outline that was published on 3 April set out the actions that would be taken to draft the energy efficiency action plan. We do not have an energy efficiency action plan sitting on the shelf. That work is under way and a new team is in place to put that together. As the minister has stated, the process involves the preparation of a more detailed document for active consultation with a range of parties in the summer, including the high-level public sector delivery group, to which I have referred. A more detailed outline will then be worked up by the end of the year. The aim is to have the plan published by the end of the year. However, I am sure that we can give the minister some material to send to the committee to provide more detail on what will be in the document that will be published for consultation. It will not be the full document—the team is working on that as we speak—but it will provide more detail on the process.
That would be helpful. I do not expect the full document, but I expect more than a page.
I am quite surprised by what Colin Imrie says. The process of the energy efficiency action plan has been going on since about 2004, yet we do not seem to be any further forward in having something to look at. When Chas Booth gave evidence to the committee on the Climate Change (Scotland) Bill, he said that he and his colleagues had been consulted to death on the energy efficiency action plan and just wanted some action. Why is it taking so long to produce a document that will allow the delivery of action on energy efficiency?
We are working in parallel with the Climate Change (Scotland) Bill. We are keen to have a document that is relevant to and supportive of the bill.
That does not really answer the question.
As the minister has said, a lot of material is already on the stocks. Back in 2007, there was a consultation on a strategy on energy efficiency. As we have made clear, there is already a lot of material. The challenge is to adapt it to the new requirements of the Climate Change (Scotland) Bill. An 80 per cent target calls for a radical ramping up of long-term action and of monitoring systems. Further details can be made available about the on-going work, which builds on the work that has already been done.
The issue of green jobs is critical to Scotland and the United Kingdom as a whole. Minister, you said that green jobs will stimulate the recovery and that they are at the heart of your economic recovery proposals. How many green jobs do you think will be created in Scotland in the next 12 months and in the next 24 months, which is probably the timescale of the recovery phase?
That kind of forecast is challenging, to say the least. Also, I am not sure that it is particularly helpful, because of the propensity of people on one side of the argument to trumpet overperformance against a modest target and people on the other side to claim that the target is not big enough. I think that we have enough targets. I expect thousands of green jobs to be created, and can see some early signs of that happening, even in the midst of the recession, when I look at the growth of Burntisland Fabrication, the establishment of the Arnish renewable energy project and, in my constituency, the phoenix arising from Vestas, which has been taken over by Welcon Towers.
I take your point about forecasting. However, this morning, the First Minister has forecast that there will be 16,000 green jobs over a 10-year period. Do you agree with that forecast?
I most certainly do. I also think that, if we think about this dramatic new industry as a whole—that is, renewables as well as carbon capture—we should expect those jobs to burgeon over time rather than conform to a traditional bell curve.
The Government is saying that it can confidently forecast how many jobs will be created in a 10-year period. However, you are saying that you cannot confidently forecast how many will be created in a one or two-year period, even though you say that those jobs are at the very heart of your economic recovery proposals. Are you saying that you think that it is credible to create a 10-year forecast but not to create a one or two-year forecast?
It is not an issue of credibility but one of value. Rather than putting effort into itemising things and drawing the trajectory of a trend over time, which we would end up monitoring and defending, it is far better to get out and propagate the potential of the industry to investors and to people who want to learn by doing. That is the way to get investment and jobs on the ground.
That is one argument. However, why have a 10-year forecast in that case? What is the value in that?
Because it grabs the attention and gets the message across about how enormously significant this area is going to be.
So the purpose of the First Minister's statement was just to grab some attention.
No, but that was an important by-product of it. It is vital that we continue to grab attention within and outwith Scotland. That is exactly what we have been doing, and people are following those signals. For example, the £1 billion of investment in renewable energy over the past year is a direct consequence of that.
Has any work been done on where the jobs are going to come from, or is it all just about grabbing attention?
The emphasis on attention grabbing is very tabloid and exceedingly unhelpful. We are trying to build a serious, material industry in an area in which Scotland has a huge comparative advantage, and the more we come together in common cause in that regard, the better. This is serious stuff. Our renewables expertise, our engineering capability and our academic knowledge give us a great comparative advantage and lead companies to invest enthusiastically in Scotland. Government and local government are pressing ahead to ensure that that happens. The process that we are discussing goes far beyond simply grabbing people's attention. Although that is important, we also have to back that up with activity on the ground, which the advisory board indicates is under way. That demonstrates the serious intent of the country—let alone the Parliament and the Government—to ensure that we crystallise the enormous potential of Scotland as the situation evolves.
I would like to add a couple of points. When I came into this job, at the end of last year—when we were talking about 50 per cent of Scotland's electricity being generated from renewables by 2020—offshore wind power was not on the radar at all. If you had asked around industry, you would have found that there was limited interest in the original proposal from the Crown Estate. Since then—in the past six or seven months—we have been gearing up to facilitate around 6GW of power from offshore wind. The pace of change in this area and the relevance of some of the external factors are demonstrated by developments that have taken place since the UK budget, such as DONG Energy's announcement that it is going to go ahead with a major investment in the Irish Sea, and the fact that it now looks like the London array is also going to be going ahead.
You said that offshore wind was not on the radar seven or eight months ago. Is the current round of development not being described as round 3?
The big piece that was not on the radar was the Scottish territorial waters round, which has generated interest from developers that amounts to a total potential of around 6GW. The technology is also moving forward. The Talisman Beatrice project, which first pioneered the establishment of such platforms in deep water, has started to open the way forward. For example, SeaEnergy Renewables has opened up a partnership with Energy Development Partners and others in Aberdeen. The scale of the Scottish territorial waters round is what I was referring to.
Perhaps Colin Imrie can just augment what has been said.
In preparing the "Energy Sector—Key Sector Report" that was published today, we suggested the key areas that will contribute to economic recovery. In the short term—I refer to paragraph 1.4 on page 6—developments are taking place in the supply chain for energy investments, which is a key area in which work is under way. Jobs are being created in the construction and operation of new wind farms, such as those at Whitelee, south of Glasgow, and the new proposals for the Clyde wind farm. It was particularly encouraging that, when Scottish and Southern Energy received consent for its Clyde proposals, the company stressed that it hoped that at least 50 per cent of the contracts would be let in Scotland. The jobs are partly in construction, which is a significant employer at present, but there are also opportunities to work with local businesses to develop wider supplies as projects move towards operation. Those will be part of the total.
Given what Jamie Hume and Colin Imrie have said and the fact that you have said that we in Scotland are at a comparative advantage as far as renewables are concerned, why are we being so unambitious? Why are we saying that only 10 per cent of the renewables jobs in the UK will come to Scotland rather than 15, 20 or 25 per cent of them? Would it not be a bit of a failure to get only 10 per cent of the renewables jobs in the UK?
The ambition is limitless. We should not set too much store by the numbers. They are conservative numbers that we can use to attract investment and wake people up to the opportunities that exist. I expect, and fervently hope, that the position will be dramatically better than that over time. That is what we are working towards. We are striving to create a situation in which more and more people are connected with, aware of and feel good will towards our efforts on renewables. That will create a climate in which we can outperform the targets. I welcome that possibility.
In the document that we have just received—the key sector report—you say, at the top of page 5, that there are at least 3,000 jobs in Scotland in renewable energy. Do I take it that in table 1.2 on the previous page, those 3,000 jobs fall under the "Electricity, gas and water" heading, which accounts for 16,500 jobs?
That is a pretty safe assumption. Logically, that is where those jobs would sit. Perhaps colleagues can say whether they think that there might be renewables jobs in any other areas. Does what I have said seem logical?
It is logical. A problem that we faced in putting together the report is that the information is insufficient and lacking. In UK statistical analysis, the energy sector has been defined as the traditional energy sector, with the result that some of the new activity, whether it relates to microgeneration or new community activity, is not included. If I am not mistaken, the estimate of 3,000 jobs came from joint working with Scottish Renewables. That figure is not confirmed.
I have another quick factual point. The minister and Mr Imrie mentioned the jobs in Machrihanish. Has there been a net gain in the number of jobs there compared with 12 months ago?
The trajectory is that there will be a net gain.
How large?
There were 95 jobs. I think that the company concerned envisages that there might be between 200 and 300 jobs on site two years from now. In the meantime, the extension of the site will involve the creation of a large number of jobs—about 400. In addition, the company is looking at the possibility of work on the east coast.
Understanding the trajectory of jobs, the time that working up energy streams will take and so on would help the public. Outside here—or even in the committee—people cannot say how long it will take to achieve a mature offshore wind sector, for example. Has the minister instructed his officers to create timelines for each energy strand's expected trajectory, so that we can see how long development will take and therefore how jobs will fit in and when the aims of each strand will be delivered? Having such a picture in each case would help us.
I agree. I come from the old Peter Drucker school of thinking—if you cannot measure it, you cannot manage it. We have every intention of keeping a finger on the pulse of that matter.
Would it help if we could see the trajectory that you expect for offshore wind and compare that with when, and at what levels, tidal energy is expected to begin to deliver? We have heard much evidence to suggest that optimum delivery from tidal will be in the 2020s, but that offshore wind could start to deliver large amounts by about 2015. There are other sectors, but mapping the timelines for those two sectors would allow the public to see more clearly where we are going.
That will be an important strand in the renewables action plan. We will go down to the strands of the individual technologies, to map that information and feed it back. As sectors evolve, such plans must be more interactive and more accessible, because they must flex and change and because data will be accumulated to provide a positive feedback loop that shows that things are happening.
I will expand on how the concept plays out in the renewables action plan. Our view is in line with the idea of assessing the technologies and their development timelines. The jobs, supply chain, infrastructure and so on for offshore wind, wave and tidal could overlap a lot, so we want to create such a picture out to 2020 and beyond by technology type, to say who needs to do what by when to realise the potential and how that will fit together. Through that and through working closely with industry, we intend to develop a way of prioritising investment, so that we are clear about where the sensible plays are and at what stage to move the whole piece forward.
On a similar theme, when we have made visits, people have continually asked about the finances that are available, which are complex because they come from Scotland, UK and Europe. We do not have a clear picture of that. For example, Alistair Darling has reassured MPs that the double renewables obligation certificates arrangement that was announced in the budget will make a major contribution to tidal power. Have you considered drawing up a table to show what funding strands are available? Frankly, funding is a maze from the point of view of people outside.
I ask Jamie Hume to answer that, lest I distort the matter in translation.
The scale of the challenge has forced a realisation that traditional funding streams for this activity need to be reassessed, alongside a better appreciation of the numbers, which are enormous. For the UK to bring round 3 offshore wind on stream, the grid infrastructure alone is estimated at £10 billion or thereabouts.
I understand what you are saying—
May I just say a little more about that EU funding to get it on the record? We have been to Europe on three occasions now—separate from calls on Andris Piebalgs and from hosting visits by Georg Adamowitsch—to run sessions at Scotland house. We have invited in Eurocrats to talk about the Scottish European green energy centre, carbon capture and storage and marine energy. We are well positioned, especially now that the EU's economic recovery programme is promising up to £350 million to support projects in offshore wind, grid developments and carbon capture and storage. We are clearly on the radar, and Scotland can play a part. We will get only a proportion of that funding, but I believe that, if we work hard, we will be able to bring it into play.
I have two supplementary questions about finance. First, would you view a simplification of the funding streams as a help to the industry? Different streams have been developed at different times. We have heard about WATES being one specific pot, for example. Is there an intention to develop that, or is the intention to find a name that people can approach as a one-stop shop?
The prospect of simplification in the wider context of public sector reform is something that we always have to consider. Of course we would be interested to consider that.
My second point is about the renewables action plan and the talk that there has been about the strategic infrastructure developments for marine energy, such as the early need for improved ports, harbours and manufacturing capacity—in particular, the infrastructure of ports. Is that an area in which the existing funds are adequately targeted to support early actions that will allow us to move forward into the development of the projects themselves?
I am not sure that I have a comprehensive answer to that question. However, I can say that Scottish Development International, Scottish Enterprise, HIE, local authorities, harbour boards and so on have taken a very co-ordinated approach towards inward investors, working with them to show Scotland in its best light, and are orchestrating moneys to achieve that end. Indeed, one fantastic recent example is the effort made by Argyll and Bute Council to highlight the strategic importance of Campbeltown's harbour facilities to make Machrihanish more attractive to Vestas.
Following your reference to Campbeltown harbour, I, too, will highlight a specific example. When the committee visited Scrabster harbour, we found that any means of using renewable cash sources for developing facilities was rather obscure. From your official position, is it clear that Scrabster, whose multipurpose harbour has an element of renewable development, can access renewable development funds from the EU or wherever else to ensure that early infrastructure developments can take place?
I have found that, in dealing with such resource or infrastructure challenges, we get the best outcomes by getting all the relevant players into a room to debate the issue. Indeed, when Vestas indicated that it was going to disengage from Campbeltown, we got Vestas, other developers, engineering interests, the local authority, HIE, SDI and Scottish Enterprise into the room very early on in the process to debate the matter, ensuring that the various issues were at the forefront of everyone's minds. In such a climate, an element of organisational collaboration, co-operation and cohesion—even altruism—comes into play to ensure that we get the best result for the local and national economy. That is certainly what happened with Vestas, and I have no reason to believe that it will not happen elsewhere. It is certainly in line with my experience of dealing with the aquaculture, life science and other sectors. In fact, I have found that when we get the regulators and the regulated, for example, or planners in a room, they start to align themselves with what is best for the overall economy, and collaboration and co-operation begin to emerge.
One of the particular challenges with ports and harbours lies in developing a strategic overview, getting a real assessment of need and finding out how that need can effectively be met. Scottish Enterprise has kicked off a study on this issue, and we are in close dialogue with it, our colleagues in ports and harbours, Scottish Development International and DECC. DECC recently carried out a separate UK ports and harbours study, although, to our minds, it slightly underplayed the potential of the resource in Scotland. As I say, the first step is getting a proper understanding of what is needed to support the offshore wind, wave and tidal elements of the industry and finding out how we deliver that.
That is helpful news.
You suggested that there needs to be more simplification on the regulatory side. I argue that things need to be more complex, to support technologies that have not yet received adequate support. The banding of the renewables obligations reflects the need to support emerging technologies. Next year there will probably be a feed-in tariff to support schemes of up to 5MW, to encourage community schemes. Following that, there will be a renewable heat incentive, because at the moment heat does not get any support under the RO. There needs to be more complexity to bring in technologies other than large-scale electricity generation.
The Institution of Mechanical Engineers has estimated that there is a £40 million funding gap towards the end of the process of moving from early-stage, academic research to working full-scale prototypes. The process was supported partly through the £13 million WATES scheme, which is now fully committed. There seems to be nothing following on from that for new projects. Is the Government considering whether a phase 2 of WATES is needed to fill the £40 million gap that has been identified?
As Sue Kearns mentioned, the position on ROCs is now different. The funding gap for rolling out IT back in the early 1970s was also enormous. The difference with renewables is that there is a real demand for energy and there are existing major players. ROCs are in place as an incentive; there are many indications that industry is responding to that. I expect to see the gap filled as we move forward out of this recessionary period and things start to crank up again.
That was a long way of saying no.
I will concentrate on some of the evidence that we have taken on the scale of the challenges. It has come over clearly to me that everybody is on board with the ambition but people are concerned about delivery. How do you see the timelines? Will you let us know some of the targets and how we will deliver them? I will ask you a couple of specific questions about that.
Are you asking me specific questions?
No, I am asking you overall how you think the Government is doing on delivery versus ambition and then I will ask you some specific questions.
Looking at the totality, there is a marked increase in the level of consents that we are putting through. We have consented 21 projects that total 1.55GW, which is about twice the going rate of consents under the previous Administration. When we drill behind those data and examine what is happening at a local authority level, we see material data: about six months ago, I saw something that said that local authorities had 180MW built in their territory and a further 910MW consented in the pipeline. That works in parallel.
Some witnesses, including the Scottish Council for Development and Industry, have said that they would like policy objectives that focus on what prevents delivery and what we can do to unblock it. That is one side of the argument. I take on board what you say, but it has not been reflected in some of the evidence that we have heard. I will bring up BiFab, as you have mentioned it a few times and because it is in Burntisland, which is in my constituency. John Robertson from BiFab gave evidence to us last week. Talking about foundation types, he said:
I wonder what John Robertson would have said back between 1999 and 2007; I think that he has a different vision of things now. If we changed the question and asked him about the positives, I think that he would identify quite a few positives. I sat with him recently in Stornoway at a session that involved the council, developers, landowners and others in which we considered how we can move things forward there. I am sure that he has been at some of the energy and manufacturing brainstorming sessions. We listen to him.
Will you consider the announcement on the £50 million and perhaps come back to us on it?
Absolutely. John Robertson is one of the babies in the bath water. We will always listen to him and be keen to engage with him.
I will move on to fuel poverty. What steps is your department taking to move forward on the fuel poverty agenda? Where are you with that?
A lot is going on. We are improving targeting with the energy assistance package, and there is new funding for the area-based home insulation scheme. On energy prices, we are supporting the Ofgem probe into energy markets. As I mentioned in my opening statement, we are trying to resolve the conflict between the CERT and fuel poverty.
I have a supplementary question. I am concerned about the most vulnerable people. I have received evidence from my constituency about travelling people having to pay extra costs for electricity—people on meters are struggling quite hard to meet the costs that are involved. Local government and the rest of the public sector can help. What collaboration is there between your department and the local people who are trying to help the people in the greatest need?
There is immense collaboration, which will only increase over time. You have put your finger on a fundamental issue in Scottish and UK society. I have recently been in touch with the Equality Trust down in London. Two people from the trust have produced a very interesting book called "The Spirit Level", which deals with inequalities and points out how more equal societies tend to do better. The book looks into how inequalities arise and into the negative effects that can kick in as a result—such as poor health, mental breakdown, drug addiction and drink problems. All the negative effects in society can emanate from inequalities, and I passionately believe that the issue has to be tackled. How well we do that will be the mark of good corporate citizenship on the part of Government, local government and companies.
The previous Administration made good efforts to tackle fuel poverty, and the current Administration has made good efforts too. However, the statistics show that, in 2002, 13 per cent of people in Scotland were defined as fuel poor, whereas in 2007, which is the most recent year for which I have seen the stats, 25 per cent of people were defined as fuel poor. Over five years, the figure almost doubled.
When we talk about a sea change, we are saying, in essence, that we have to tackle the core problem. For me, the core problem has always been that we run the country on a Barnett-formula block allocation from Westminster. A major component in efforts to tackle fuel poverty will be a more vibrant and competitive economy, with more people in the workplace and more people able to build successful and fulfilling lives for themselves. We are doing all that we can to handle the symptoms and will continue to do so honourably and assiduously, but for me the current set-up is the fundamental issue.
That is quite an opaque answer, and—
It is not; it is absolutely clear. We want Scotland to stand on its own, to run its own profit-and-loss account, balance sheet and cash position, and to have its own notional share value, so that it can grow incrementally the numbers of people in work—not only in renewables but across the board.
Okay, but instead of simply referring to Scotland as a public limited company, let us focus on the people who are currently fuel poor and the Scottish Government's present powers.
Sure.
Is there scope for some kind of sea change? The 2008 or 2009 figures might show that your changes are working but, if they do not, does the Government have a plan B to help us to motor towards the 2016 target?
With the energy-assistance package and the area-based home insulation scheme, we are moving towards a sea change. I have some data in front of me. There is £10 million from the Carbon Trust and Energy Savings Trust; a potential £100 million a year from CERT; £60 million from the Scottish Government in the energy-assistance package; £3.5 million for community microgeneration; £15 million for home insulation schemes, with £15 million from other sources; a revolving loan scheme for small and medium-sized businesses, with £5 million invested to date; and a revolving loan scheme for the public sector, with £24 million invested to date. That represents a sea change from what has happened in the past. However, I stress that I am still keen to handle the core problem.
Before I come to my main area of questioning, I have a question on the energy advisory board. Is there any particular reason why Forth Ports is represented on the board and is one of the partners but Clydeport is not?
If we continued with that, we would have an energy advisory board with 5.1 million people on it. Logically, that is what we want to do, in that the members are connected out to other people. I expect every player on the energy advisory board to represent other stakeholders and allies and to seek to achieve outcomes for Scotland that are in line with the unifying and worthy goal of increased sustainable growth. The aim is to optimise the potential for energy to play its part in achieving that result. I expect people to work pro bono and with an altruistic attitude.
I am happy with that. I ask the question because the Hunterston terminal is on Clydeport's patch, so it has an interest in the issue and would want to play its full part.
There is a clear vehicle. We are building a reputation for our ability and willingness to engage and listen and to get messages through to people, and we will continue to do that.
I have a couple of questions about community schemes. By my reckoning, the first time in today's discussion that community schemes were touched on was 11.20, when Sue Kearns mentioned them. A moment or so ago, the minister mentioned community microgeneration funds, although I did not catch the figure that has been put into those funds.
It is £8 million.
Thank you. Apart from that sum, what other assistance might be provided for community microgeneration schemes? I am thinking about not only wind generation but possibilities such as mini hydro schemes. The minister knows the topography of Inverclyde as well as I do, so he knows that the area floods greatly every year. That is a topical issue, as we will discuss the Flood Risk Management (Scotland) Bill in the Parliament this afternoon. If such schemes are proposed in the Inverclyde area, will the Government or Government agencies provide assistance to push them forward, as they can benefit communities and provide benefits in relation to flooding?
I will ask Sue Kearns to augment my answer, but I can say that an interesting report was produced last year by Nick Forrest Associates on the potential for small-scale hydro schemes. The study mapped digitally the topography of Scotland, considered the potential for run-of-river schemes that would have a negligible environmental impact and identified where such schemes could be placed. The figure in my mind is that the total potential power was 657MW.
Under the previous community renewables scheme, we funded about 400 schemes throughout Scotland to help communities benefit from renewables. From last month, we have changed the scheme and we now have the communities and renewable energy scheme—CARES—which is administered by Community Energy Scotland. It is not just a grant scheme; it involves a network of community support officers who go out to communities to help them get the most out of renewables and to signpost funding that is available to help them.
Before I ask any more questions, I will check out the toolkit on the web. I was not aware that things had changed over the past month. How was that publicised?
Broadly. The important thing is that Community Energy Scotland evolved out of HIE in the form of the Highlands and Islands Community Energy Company, which built up a fantastic track record. It is now a separate entity under Nicholas Gubbins and is delivering well. It can advertise and broadcast what is working elsewhere to help communities to understand what they might learn from others as well as the support that they can get from Sue Kearns and her team.
My final question is about onshore wind power. I welcome the discussion about onshore as well as offshore wind power, but planning applications can still be highly contentious in some communities. All stakeholders need to consider that. There is a concern that wind power developments are being planted just anywhere—for want of a better phrase—in order that the targets that have been set can be achieved. That is the wrong way to go. I am not suggesting that that is what is happening, but that could be the perception among local communities.
From the outset, we have said that onshore wind developments will not be sited just anywhere and at any price. We are seeking to maintain the balance and integrity of our environment. We are telling developers that if they engage and come to agreement with local communities and if they handle and engage with the environmental issues, that will create a greater propensity for developments to go ahead. When things have become problematic and difficult, we have put in additional resource to clarify matters, as we did with the Halcrow report on the Western Isles.
I will allow Lewis Macdonald a very brief supplementary question.
You were able to tell Marilyn Livingstone how many renewables projects have been approved, how many megawatts they represent and how the situation compares with that under the previous Administration. Can you tell us how many renewables development project applications have been rejected, how many megawatts they represent and how the situation compares with the situation under the previous Administration?
We have generated somewhat less; the exact number is not at the forefront of my brain, as members can see from the fact that I am looking through my papers.
So you have rejected five projects. How many megawatts do they represent?
I would struggle somewhat to compute that, but I am sure that it is a considerable number.
Would it be correct to say that those projects represent more than a gigawatt?
I think so, given that the Lewis situation is a factor.
How does that compare with the previous Administration?
I honestly do not know, but we will find out and monitor it.
Could you let us know in advance of our next meeting? As you have given us the comparators for consents, it would be useful for us to have the comparators for refusals too.
We should be able to get that information pretty easily.
I have some questions about the supply of technology, the ability to create it and the market. I do not know whether any of you have looked into my usual sensational reading—I get the Financial Times every day—and seen the ominous supplement on the future of capitalism, which has article titles such as "Uncertainty bedevils all", which appeared yesterday.
You paint a very complex picture—basically because that is the reality of the situation. There are huge opportunities and uncertainties, and a lot of other vested interests from other jurisdictions are at play. One thing that perhaps mitigates that somewhat is that the challenge is at a global level. It is so enormous that no one state will come up with all the answers. There is, therefore, a real appetite for collaboration, co-operation and cohesion. That is why we found that we were welcomed in Norway—as you were in Denmark—and by the Eurocrats when we went to Europe to speak during the sustainable energy week. The key issue is that we continue to engage; I have great faith in the interconnectedness here in Scotland because I see that it works, and we need to replicate that internationally.
When we come to modelling those possibilities and combinations of possibilities—I hope we do such modelling—we still have a major problem in that we produce relatively few technologists of the type that can take a very good reputation in university and basic research and turn it into production-line engineering. That seems to be an area where we could run into big problems simply because our resource could price itself out of our particular market. That leads to a question for the British Government about whether we have committed ourselves deeply to extremely expensive defence projects that yield no public value whatsoever—I am thinking of Trident and the aircraft carrier programme, which seem to have their origins in the 1900s and no longer have any relevance.
I will start with that latter point because we are particularly well served by the University of Edinburgh, Heriot-Watt University and the Scottish carbon capture and storage centre under the fantastic stewardship of Stuart Hazeldine who is getting that message across wonderfully effectively—not just in home games here in Scotland but in away games talking to Norwegians and, particularly, talking to Brussels and getting EU understanding of the significance of it.
We are beginning to run out of time, so I will mop up with a couple of questions on important areas that we have not yet touched on.
Like the committee, we are very conscious of that issue—we have consulted on it and had workshops with the industry. Clearly, we will take the UK position into account. We are keen to prove the case for one of the demonstrators to be in Scotland. We will report on that in due course, particularly in the context of the report that was essentially launched by the First Minister on 1 May vis-à-vis carbon capture and storage. That is a focus of lively interest and we will make pronouncements on that once we have been properly able to distil the consultation, the workshops and the other inputs.
We all support the demonstrator project for carbon capture and storage; the question is whether the Government will support the building of a new coal-fired power station that does not have CCS.
Let us make the pronouncement in the proper phase, when we have heard all the evidence and are better able to present it back to the committee and to the people of Scotland.
That issue is important in relation to how we deal with our energy inquiry report, so we would be interested to have an answer to that question as soon as you can give us one.
Absolutely.
We tend to focus on electricity, but it accounts for only 25 per cent of our energy use. The big one is heat. We are waiting on the renewable heat action plan emerging at some future date. What is the Government's policy on heat in general? The committee considered evidence from Berlin and Denmark on the development of district heating. Denmark in particular has used statutory powers to ensure that district heating is implemented and that no one in the relevant area can opt out of the system. In addition, people cannot send to landfill any waste that can be recycled, reused or incinerated, because such waste can be turned into energy and heat. What is the Government's policy on heat? Is it considering developing any of the areas that I have mentioned?
I will ask Sue Kearns to give you details on renewable heat, but I can tell you that it will be part of the energy efficiency action plan—it will fold into that. Of course we are keen to learn from best practice elsewhere. Essentially, we want the material element of waste in the energy asset register of Scotland to be brought up to an acceptable standard and developed beyond that. I have a lovely anecdote for you in that regard. Sandy Brunton, who runs the post office in Fionnphort in Mull, now has a sideline that is every bit as significant as his main business. Last week, he installed his 74th air-source heat pump, which shows that things are beginning to happen. Sue Kearns will give you further detail.
The minister mentioned the wider issue of heat. Waste heat and district heating will be covered in the energy efficiency action plan. Renewable heat will be covered in the renewable heat action plan, which we will have out in the summer. We already have schemes to promote renewable heat in district heating and we have the Scottish biomass heat scheme. We are evaluating applications, some of which are for small district heating schemes, which we want to encourage at demonstrator scale. We have supported district heating at a small level in our community renewable schemes, such as the heat pump scheme at Tranent. We have also given support to domestic consumers, for example for the Lerwick district heating scheme. There is activity in renewable heat and district heating.
Getting to 11 per cent in 10 years will require a tenfold increase, not a doubling, so there is a long way to go.
I have not been to the Mitsubishi factory yet, although the firm has visited us. You have marked my card on that and whetted my appetite. What is happening in Fionnphort in Mull could happen elsewhere in Argyll and Bute. Heat pumps are a live issue for debate. I am certainly keen to see a good and productive outcome from that.
You talk a lot about people being in the room and talking about things but, in general—I am not criticising this Government in particular—Governments ad infinitum have been very bad at joined-up thinking. For example, we have holes in roads all over Edinburgh for a tram network that will have to be powered by electricity, but nobody has thought about putting district heating pipes in while the holes are in the roads.
Sure. The systems thinking revolution and coming together starts with conversation, then it can move to a better place. I like to think that today's session and the work that the committee has done to date will help that process. We will certainly treat it as an on-going task. I would like to thank you now, because I have to shoot off.
Can I just ask a brief, final question? The membership of the energy advisory board does not seem to include you, the Minister for Enterprise, Energy and Tourism. Is that right?
I think that that would be an omission, because I intend to be there.
It is not above your pay grade, then.
The membership information is probably drawn from the list of who was supposed to be there today. I was here today, so I was removed from that list.
I thank the minister and his officials for their time. It has been a long session, but I am sure that we got a lot of useful information. We look forward to seeing the minister again in two weeks' time, when the committee will consider specific issues that it wants to include in its report.
Meeting closed at 12:10.