Chamber and committees

Good morning. We know that, historically, transmission charges have disadvantaged the development of renewables in Scotland. On Friday, you issued your call for evidence on Scottish locational network charges, in which you state:

“we do not consider simply reducing TNUoS tariffs for some parties (or in some regions) to necessarily be a desirable outcome in its own right, and we expect that changes will be assessed in accordance with our statutory duties, the CUSC Applicable Charging Objectives and the legislative framework in which we operate.”

Do you consider Scotland to be a region or a nation? We have a national Parliament.

You refer to

“the legislative framework in which we operate”.

Does the legislative framework include the Scottish Government’s net zero commitments, or are changes required? If it already does, how does it do so? Does it include the Prime Minister’s commitment to 40GW of offshore wind generation by 2030 or the impending commitment to make Great Britain’s electricity generation zero carbon by 2035? If the legislative framework is not fit for purpose, when and how should it be changed?

Looking at the scale of the change—whether it is in transport, heating or other big areas—the more infrastructure that we have, the more the costs can come down. It goes back to where the generation potential is. In the Scottish context, the Beatrice wind farm is being charged an average of £4.50 per unit of energy, whereas the similar Greater Gabbard wind farm off the south-east coast of England is being charged £1.50 per unit. The tension that we mentioned is clearly there, and regulation has a part to play. How do we get the infrastructure shift in order to get that generation? Scotland has 25 per cent of Europe’s offshore potential. How do we translate that, on a cost basis, into mass infrastructure for more renewable distribution if generation is being severely handicapped by the current regime?

Once you have answered that question, I want to get on to what steps we need to take in relation to energy legislation and when we need to take them. We do not want to miss the boat by missing legislation that is required in order to make those changes. If you could address that issue, that would be helpful.

Professor Docherty, I am conscious that people are not biting on the issue that I raised to do with VAT, but there you go.

There is clearly a recognised tension in the regulatory framework between pursuing net zero and your historical role in relation to consumer prices. The 26th United Nations climate change conference of the parties—COP26—will provide a showcase for investment in Scotland, but the modelling for your “Access and Forward-looking Charges Significant Code Review: Consultation on Minded to Positions” states that

“we observe a shift in the location of new generation capacity in our model”

and that, under the transmission reform option,

“we observe less investment in embedded generation capacity in Scotland and a corresponding increase in distribution zones further south.”

Does that not undermine the Scottish Government’s attempts to pursue our net zero targets? How can Ofgem be sure that building wind farms in England—which, as we know, is less windy than Scotland—will not make the cost of getting to net zero higher overall?

Good morning. I will focus my questioning on infrastructure, so I will come to Mr Rose first, and Professor Docherty might want to come in on that as well. The Infrastructure Commission for Scotland’s view on existing infrastructure and a presumption against new infrastructure was quite a powerful statement. So much focus has been on new building standards or things that are new, so what needs to happen to ensure that that recommendation is delivered? In your view, is the Scottish Government implementing the recommendations on presumption against new infrastructure?

Does Tony Rose or Iain Docherty want to say anything about the use of existing buildings in cities? Is that helpful in reaching net zero, or is it just a necessity of life post-Covid?

There is not.

Diversification of energy needs to be “both/and” to get to where we need to be, as opposed to “either/or” green hydrogen and others. With regard to the timescale again, how do we know that the necessary legislation will be in place in advance of that transition? When do regulations have to happen to unlock that potential?

Yes, including the point about transmission. If we miss the boat on changes, how will we get the pace and scale that we need within the timeframe for the “further and faster” drive that you were talking about?

The Scottish Parliament’s Health and Social Care Committee has concerns about live issues to do with recruitment, and shortages of skills and labour, particularly in health and social care. Do you agree that this is not just a dry academic issue, but a very real issue that concerns the Scottish Government’s ability to recruit and retain highly skilled workers at the higher standards of the Scottish regulators?