Meeting of the Parliament

Meeting date: Tuesday, December 6, 2016

Official Report 872KB pdf

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Renewables

The next item of business is a debate on motion S5M-02919, in the name of Paul Wheelhouse, on support for Scotland’s renewables. We have already eaten into the time for the debate, so speeches will have to be quite tight.

14:55  

This afternoon, I want to pay tribute to Scotland’s renewable energy industry and highlight some of our renewable energy achievements. I also want to set out the challenges that Scotland’s sector now faces given the current direction of United Kingdom Government policy, and how we intend to go forward.

I hope that members will join me in acknowledging the significant contribution that the renewable energy sector makes to Scotland’s economy and environment and to meeting its energy needs. The renewable energy industry in Scotland makes headlines and breaks records. In August, for the first time ever, wind turbines in Scotland generated more electricity than was used in the whole of the nation on a single day. In September, the First Minister unveiled the world’s largest planned tidal stream project, MeyGen, the first two turbines of which are now generating electricity in the Pentland Firth. Onshore works on the world’s largest consented floating offshore wind farm site have begun, and we can expect to see Statoil’s Hywind Scotland project deployed next summer.

A Scottish Renewables report that was published last week found that Scottish renewable energy businesses are working in more than 40 countries around the world. Recent figures from the Office for National Statistics show that low-carbon industries and their supply chains in Scotland generated turnover of almost £11 billion in 2014 and supported 43,500 jobs. In the words of UK Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, last month,

“There are few nations that could claim to have embraced renewable energy with as much enthusiasm and success as Scotland. Last year, over half of Scotland’s electricity came from renewable technologies—a clear example to the rest of the world.”

Murdo Fraser, please note.

However, although UK Government ministers applaud our success, their policy decisions continue to create serious uncertainty across the sector and undermine Scotland’s renewables potential. I was extremely disappointed—indeed, I was angered—by the UK Government’s handling of the contracts for difference announcement in some respects. The Scottish Government repeatedly sought assurances from UK Government ministers about their plans to support renewable energy projects through the contracts for difference auction. I regret to say that I believe that the UK Government misled Scottish ministers and investors in the renewables industry and has reneged on earlier commitments.

I will give some key examples of that, the first of which is on island wind. Developers and communities on the remote islands of Scotland have told us that they are bitterly disappointed by the CFD announcement. They cannot understand why the UK Government has launched a further consultation on the treatment of island wind, which curiously the Conservative amendment seeks to celebrate. In the consultation, the UK Government has set out its position that island wind should not be considered as a separate technology, but should instead be treated in the same way as onshore wind.

That new minded-to position of the UK Government defies belief. It contradicts its previous position and undermines the work of the Scottish island renewables delivery forum, which is an intergovernmental working group that was set up to address the barriers to the deployment of island wind and marine technologies. The delivery forum, which is co-chaired by UK and Scottish Government ministers, has funded over £100,000 of research that found that, although island wind could capture some of Europe’s best wind resources, the projects face unique costs that obstruct deployment.

The research showed that unlocking the islands’ potential would provide a significant economic stimulus to our island communities, boost employment and spur innovation in other energy sectors. The use of multiterminal HVDC—high-voltage direct current—cables would provide learning benefits to offshore wind, and the export capacity that the transmission links would provide to the islands would open the door for further development of marine energy.

Island wind would also bring UK-wide supply chain benefits and contribute to the decarbonisation of the UK energy system, which will be crucial if the UK’s carbon emissions targets are to be met. However, the research highlighted that island projects face a number of technical and financial barriers that make them more akin to offshore than to onshore wind. Expensive HVDC cables are required to connect the islands to the mainland transmission grid—an individual cable to Shetland or the Western Isles would cost an estimated £600 million to £700 million. The remote and challenging conditions in which the projects would operate would increase their network and operations and maintenance costs. For instance, it is projected that a wind project on Shetland would face a transmission charge of £134 per kilowatt per annum compared with £18 for a mainland project. Similarly, a project on the Western Isles could pay up to £114 per kilowatt per annum.

The case for treating island wind as a distinct technology from onshore wind is the product of a close working relationship between our two Governments. From that evidence base, the UK Government twice proposed a strike price for island wind and concluded from its 2013 consultation that it warranted separate treatment. There was almost no industry dissent on that stance. Therefore, it was with great frustration that we learned with no prior warning that the UK Government had chosen to run a second consultation on the treatment of island wind—in effect, barring island wind from bidding for CFD allocation.

The Low Carbon Contracts Company has published a booklet for 2016-17 that says that its intention is

“to provide long-term revenue stability to low-carbon Generators.”

Has that not been departed from in the decisions that the UK Government has made?

Mr Stevenson is absolutely right. I bow to his experience in his previous role as Minister for Environment and Climate Change. I know that he has experienced the constant chopping and changing of UK policy, which undermines long-term investment. Island wind projects are, obviously, long-term investments with huge capital costs up front.

The only justification given for the change of heart is the 2015 Conservative manifesto commitment to end support for onshore wind. Apparently, Andrea Leadsom’s September 2015 commitment to seek a state aid case with the European Commission is now history. However, the Scottish Government is clear that the case for treating island wind as a separate technology from onshore wind has already been made. The UK Government promised Scotland that we would be better together but—I do not make this as a constitutional point—even after years of unprecedented co-operation on the subject and what we genuinely thought was a productive partnership between our two Governments, it seems that Scotland is unable to count on the UK Government to deliver on its word.

The lack of communication and the delay and indecision on the part of the UK Government have undermined the delivery forum’s work. Since the forum’s last meeting more than a year ago, Scottish ministers and island councils have written repeatedly to the UK Government but have received no positive response. The timing of the consultation is particularly disappointing, given the UK Government’s knowledge of the tight timetable for delivering the projects. Even if we persuade the UK Government of the validity of its own evidence, it is now highly unlikely that the island projects will be able to compete in the April 2017 auction.

The Scottish Government remains committed to the shared ambition that we developed in partnership with the UK Government to deliver island wind and capture its benefits. We take some encouragement from the assurance given by Baroness Neville-Rolfe, the Minister of State for Energy and Intellectual Property, that the consultation is genuine. I genuinely hope that it is, but we call on the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, to re-engage with the delivery forum and to stand by the strong case that it has helped to develop for island wind. Although I fully acknowledge the Scottish Government’s important role in the matter, it is the UK Government’s responsibility to deliver on the political promises that it has made to the island councils and developers who have continued to invest in the projects in good faith.

The wave and tidal sectors feel similarly let down following the UK Government’s announcement on CFD. I am immensely proud—as I am sure many, if not all, members are—of the marine energy industry in Scotland. The sector has progressed more in 2016 than in any previous year, and Scottish firms are in a dominant position, as was discussed at last week’s Scottish green energy awards ceremony. Edinburgh firm Nova Innovation has deployed the first two turbines of the Shetland tidal array at Bluemull Sound; Atlantis Resources has almost completed construction of the first phase of the MeyGen project; and Orkney-based Scotrenewables has begun testing the world’s most powerful 2MW tidal turbine device at our flagship European Marine Energy Centre. In that triumphant moment for the marine energy sector, it is extremely disappointing that the UK Government is threatening the growth of that innovative sector by refusing to provide ring-fenced support for wave and tidal stream technologies.

I and my officials will have discussions with the UK Government so that we can agree a way forward for the marine energy industry. I will also convene a round table of representatives from the marine energy sector later this month to hear their priorities and their suggestions for initiatives that we might take to support them.

Will the minister give way?

I am sorry, I am really pressed for time.

It is regrettable that the UK Government does not appear to have learned the lessons from wind power, when it missed the opportunity to establish the UK as the world-leading centre for renewable energy technology and allowed our competitors to dominate. That was a huge own goal for the UK. The Scottish Government is absolutely committed to helping us to maintain our global lead in marine energy. The sector needs support so that it can build on the success of the first projects to drive down the cost of energy. We are determined to do all that we can to ensure that the tidal energy sector, which has potential to generate sustainable jobs, is taken forward in Scotland. We again call for a new approach to the UK’s relationship with Scotland on energy matters, with decisions on energy policy being made following a process of consultation and agreement with the Scottish Government, as set out in the Scotland Act 2016. I genuinely want to work with my counterparts to secure even more success for the sector if we can do so.

Onshore wind is a sector that has been thoroughly overlooked in the auction process. It is an absolute priority of ours to find a route to market for onshore wind. It is our cheapest renewable technology at scale and it makes a substantial contribution to our renewable energy targets and to reducing carbon emissions. At this time, the UK Government is not being clear on its stance on a price stabilisation mechanism, and the industry is in effect immobilised, with only legacy projects from the era of renewable obligations certificates and feed-in tariffs being constructed at this time. We need clarity soon, or the industry will go elsewhere. That could have a serious impact on our emissions reduction targets, on jobs and on communities. The First Minister and I have asked the UK Government’s Department for Business, Energy and Industrial Strategy to consider Scotland’s onshore wind sector as part of its forthcoming industrial strategy.

Pumped-storage hydro has the potential to play a significant role in Scotland’s energy future, and in the future of these islands as a whole. The provision of greater energy system flexibility is widely regarded as a key issue for energy policy, and a range of technologies and approaches will play a role in the smart energy system. That is recognised by the newly formed pumped-storage hydro working group.

In order to ensure that pumped-storage hydro—a proven, highly flexible and large-scale option—is considered fully as policies and support frameworks are developed, the group commissioned an independent report on the technology. That report has now been published and provides a clear summary of the many benefits that pumped-storage hydro provides today and could offer in the future. It sets out the significant investment and market challenges that are associated with delivering new projects, and emphasises the need to explore how those barriers can be removed.

I wrote to the UK Government to commend the report, and to ask it to engage with the industry and the Scottish Government to explore how we can work together to realise the full potential of pumped-storage hydro. I will continue to pursue that matter with the UK Government.

Scotland’s renewables sector has come a long way. The more mature technologies, such as onshore wind and solar, are fast becoming some of the cheapest forms of power generation and are attractive for deployment in relation to power purchase agreements, for example. It makes no sense for the UK Government to exclude those readily available forms of clean energy from having a viable route to selling their electricity to the market when they could make such an important contribution to meeting future climate change targets. If the UK Government wants to keep bills down for consumers—an aim that we share—why overlook the lowest-cost methods of generating green energy?

Earlier, I mentioned the MeyGen tidal energy project in the Pentland Firth. The eyes of the world are on that innovative scheme, which is a flagship project for the whole tidal industry. The UK Government invested alongside the Scottish Government in the first phase of that groundbreaking project. It is a superb example of what can be done when the UK and Scottish Governments work together to provide a lasting benefit for the people of Scotland and to tackle climate change. However, now that the developer is on the cusp of reaching financial close on the next phase of the project, BEIS has decided that offering a ring-fenced budget for such projects,

“does not represent good value for money for consumers”.

I am sure that members will agree that that is not only irrational but short-sighted. If the UK Government wants the marine energy sector to achieve cost reductions, placing obstacles in its path is hardly the way to do it.

I move,

That the Parliament notes the UK Government’s announcement on the second renewable energy Contracts for Difference (CfD) allocation round; acknowledges the latest round as a potential opportunity for Scottish offshore wind farms to compete for contracts; notes its strong concern that the UK Government has effectively excluded island wind projects from this CfD allocation, despite repeated assurances to the contrary following a 2013 consultation; further notes with concern the UK Government’s decision not to provide a minimum allocation for Scotland’s world-leading marine energy technologies, therefore overlooking their potential to supply a substantial contribution to future energy needs and to develop a domestic engineering base; considers that the UK Government has, to date, failed to respond positively to calls from the Scottish Government and industry for a “route to market” to unlock investment in consented pumped hydro storage projects; notes the Scottish Government’s efforts to coordinate development of the offshore wind supply chain, and supports the Scottish Government in its efforts to work with the renewable energy industry to identify the most appropriate means by which it can use those powers at its disposal to support the development of the renewable energy sector, across a range of technologies, and to ensure that the sector has the financial and political support that it requires.

15:08  

I refer members to my entry in the register of members’ interests, in particular to my involvement in renewable energy.

The Scottish Conservatives welcome the debate on renewables and support the Government’s acknowledgement of the opportunities that the latest round of contracts for difference brings to the Scottish economy. We also strongly support the Scottish Government using powers within its means to further develop the renewable energy sector. As for the Labour amendment, I think that we can safely say that we will support anything that uses transferable skills and creates jobs. Even in the Green amendment, there are elements such as sectoral targets, repowering and energy bonds to which we might be sympathetic. I hope that today’s debate will develop those areas.

However, as always, it is important to note the absolute hypocrisy that is displayed by the Scottish National Party. The SNP continues to moan about the lack of funding for Scotland—but only in this chamber. I am not sure whether the minister is aware, but his colleagues at Westminster, who were, on the Thursday, full of indignation at the CFD announcement, had by Monday calmed themselves so much that they did not even bother to raise an emergency question. So, apparently, the issue is problematic for Scotland, but it is not problematic enough for them to change their weekend plans. Alternatively, perhaps they—unlike their colleagues here—appreciate that, although Scotland contributes less than 10 per cent of the levy that raises funds for CFD, we received more than 43 per cent of the allocation of CFD.

The UK Government remains committed to helping the offshore wind sector in Scotland, with a record level of investment. I will put that in context for members. Before 2010, under the previous UK Labour Government, the average level of investment in renewables was £3 billion. In the six years since then, that figure has more than doubled to £7 billion a year. The minister may not like it, but he must acknowledge that it is the UK Government that is currently steering us towards meeting our COP21 targets. It should therefore come as no surprise that the UK has now moved up to second place in the latest climate change performance index.

We have now committed the UK to stop using coal—the dirtiest of fuels—from 2025. That bold commitment shows the great progress that we are making in decarbonising our energy sector, but it is not only our Westminster colleagues who are taking the initiative. We on the Conservative side of the chamber have always supported the attempt by Scottish Renewables to create a new sustainable energy innovation centre in Scotland, as it would be a great opportunity for Scotland to harness its research and development abilities and to export those skills all over the world. Unfortunately, so far, that is going down on the list as just another missed SNP opportunity.

It is no wonder that the polls are tightening. It appears that, as well as powering our grid, the winds of Scotland are changing. As we move to decarbonise Scotland, it is clear that the Scottish Government has to deal with the elephant in the room—heat. Heat accounts for 54 per cent of our energy usage, and 49 per cent of our home energy usage is space heating, which is effectively wasted. We are charging consumers for heat that they are, in effect, pumping into the sky. That is ever more worrying when one considers the rising levels of fuel poverty in Scotland, as it means that more than 40 per cent of Scotland’s households are spending more than 10 per cent of their income on fuel. That is simply not good enough, and the Scottish Government must take action on the matter immediately. It is another problem, and another SNP fail.

Will the member admit that the carbon emissions levels from the UK as a whole are not helped by the Tory Government’s obsession with fracking?

The only issue that we in Scotland have with fracking is that it is completely hypocritical to take a stance on it while importing fracked gas from America, which has a higher carbon emissions count when one considers the shipping costs for bringing it over. The hypocrisy in saying that fracking should not happen and yet still being happy to import fracked gas turns the argument on its head.

I will continue on the subject of heat. The most recent figures, which were published this morning, show that 8 per cent of lofts still have less than the minimum 100mm of insulation or no insulation at all. That figure has remained nearly unchanged for three years. That means that 144,000 homes have inadequate insulation this winter, wasting hard-working families’ income on inefficient heating while the Scottish Government twiddles its thumbs and sits on its hands—no doubt to keep them warm.

The problem is not limited to lofts. Investment in district heating must be a priority for the Scottish Government, and nowhere would it work better than in the Scottish Government’s buildings at Victoria docks. Even from a quick glance at the Scottish Government’s heat map, it is evident that the building is a prime candidate for district heating, yet the Scottish Government has not even looked into the matter. How are companies supposed to take the initiative when the Scottish Government cannot—literally—put its own house in order?

In conclusion, I quote from the recent University of Strathclyde report, which states:

“Doing nothing is simply not an option”.

How many times do we have to tell them?

I move amendment S5M-02919.1, to leave out from “acknowledges” to “hydro storage projects” and insert:

“welcomes the £290 million of annual funding that this will provide for less-established technologies such as offshore wind, wave and tidal; acknowledges the latest round as a potential opportunity for Scottish offshore wind farms to compete for contracts; notes that the UK Government has launched a full consultation on whether island onshore wind projects should be treated differently from those on the mainland; welcomes the UK Government’s support in the Autumn Statement for low-emissions vehicles; recognises the need for a focal point for developing renewable technologies and calls for the creation of a sustainable energy innovation centre; urges the Scottish Government’s forthcoming energy strategy to set out a balanced energy mix, recognising the need to protect bill-payers, reduce emissions and provide security of supply; understands that support mechanisms for energy storage could help lead to a more efficient grid; recognises the potential for growth in the renewable heat sector and calls for the expansion of district heating”.

15:13  

I welcome the opportunity to debate renewables. We will consider the draft energy strategy in the new year, and there will be a longer period for discussion and debate, which will undoubtedly cover renewables along with a range of other energy sources. I am clear that we need a mix of sources in our energy supply for the future.

In the interests of time and brevity, I will focus in this debate predominantly on two aspects. The first is the support—or lack of it—from the UK Government, and the second is the economic impact of renewables investment.

Let me take those things in reverse order. We have seen a substantial increase in renewables, particularly with onshore wind projects in the past few years, and that is welcome. For many people, their support in part depends on where the turbines are sited and how well they work with the background environment. That said, Scotland punches above its weight in attracting the lion’s share of UK Government subsidies. I am not convinced, however, that we have got the biggest bang for our buck.

I am told by those who work in the industry that there is considerable supply chain potential that we are simply not catching. Typically, the vast majority of wind turbines are manufactured abroad. That is where a considerable amount of our resource goes and that is where the biggest jobs impact is. I will give two examples to illustrate that. I am told that the offshore wind turbine project in the Pentland Firth sends its turbine work to Austria, and the new Scottish Power project in the North Sea is sending its turbine orders to the Gulf. That is potentially 200 jobs, the benefit of which is not in Scotland. Frankly, that is not good enough. At a time when our economy is struggling, every penny should be a prisoner and we should seek to make more of the economic opportunities, especially those that enjoy public subsidy.

Will Jackie Baillie congratulate the firm BiFab, which is on the Isle of Lewis, and its workers, who are successfully starting work on 28 jackets and eight piles for the Beatrice field?

I absolutely welcome that. I just want to see more of that, and I am sure that Stewart Stevenson does, too.

The Scottish Government economic strategy in 2011 suggested that the low-carbon sector could support 130,000 jobs by 2020. I think that that was probably a little overambitious, and I suspect that the Scottish Government thought so too, because by the time that we came to the 2015 strategy, the figure had disappeared. In its briefing, Scottish Renewables suggests that there are 21,000 jobs in renewables.

I can find no reference in Government documents to a target for jobs and little prior work on securing more of the supply chain for Scotland.

Will the member take an intervention?

I really should make progress.

Although that is disappointing, I am ever hopeful for change from the minister. As a general principle—I think that he would agree—we should always consider the economic and jobs impact of any public sector investment. That is not protectionist; it is sensible. It is about maximising economic opportunity and getting the best value for our investment. Quite simply, I want the lion’s share of renewables jobs to be in Scotland.

Scotland is uniquely placed to take advantage of the renewables revolution. We have lots of wind, and not just in this chamber. Indeed, if there was a renewables technology that captured energy from rain we would be quids in. Joking aside, we have considerable expertise in the oil and gas sector. Oil & Gas UK estimates that there will have been 120,000 job losses in the industry by the end of this year. Many of those who lose their jobs will be engineers with transferable skills, so let us ensure that we connect opportunities in renewables with the skilled workforce in the oil and gas sector.

I hope that the Parliament will accept Labour’s amendment, maximise the supply chain and consult on setting a target for jobs to be delivered by renewables.

Given the potential that we have, I am genuinely disappointed by the Tories’ attitude at the UK level. The announcement of the second pot of funding for contract for difference was delayed by a year. The £290 million for delivery from 2021 to 2023 is indeed welcome, but the devil, as ever, is in the detail.

We see support for offshore wind technologies. Clearly, Donald Trump did not manage to have a word with the UK Government before it decided on its course of action. He is of course the gift that keeps on giving. If anyone cares to look at his tweets, they will see one that I found:

“@David_Cameron should be run out of office for spending so much of England’s money to subsidize windfarms in Scotland.”

Dearie me. It is almost tempting to call for a comeback from David Cameron.

The UK Tory Government has not made any commitments on helping onshore wind and solar technologies find a route to market. Neither is there any minima for wave and tidal technologies, so they will have to compete with cheaper technologies, which will be difficult. There is no promise to the Scottish islands, which is a departure from the UK Government’s previous commitment to remote islands.

We know the very real challenges of delivery and investment in interconnection, as well as the clear social and industrial benefits for small island communities. I hope that, when the consultation ends, the UK Government will have listened to those remote communities and decided that they should be treated as a separate category to onshore wind projects.

Labour members support renewables, but we believe that there is even greater economic gain to be had from current and future investment. Therefore, I commend my amendment to the chamber.

I move amendment S5M-02919.3, to insert at end:

“; notes that the Scottish Government has not set a specific target for the number of jobs that the renewables sector should create; therefore urges it to do more for jobs that will support Scotland’s economy, and recognises that this should include the full use of transferable skills of the oil and gas sector so that they can be utilised in the renewables sector across a range of alternative energy projects.”

15:20  

I declare an interest as a councillor in Stirling.

I thank the Scottish Government for lodging the motion for this afternoon’s debate. It is right that, as a Parliament, we repeatedly celebrate the green energy achievements of the past 17 years. In fact, 2016 has been a record-breaking year for wind power, which, on several days and for the first time ever, has generated more electricity than Scotland’s entire demand.

The fact that renewables meet the equivalent of well over half our electricity needs in Scotland is a story of success, but it also begs the question about our longer-term goals. There is no room for complacency: electricity generation represents only a quarter of our energy needs, as transport and heat are largely still fuelled by fossil energy sources.

It is clear that fully decarbonising the energy sector—for example, by shifting to electric transport and district heating—inevitably means an increase in demand for electricity, which will require efforts to create local energy systems that can balance supply and demand. Much of the support for and development of those approaches is possible here in Scotland under devolved powers, and good work on innovation has already been piloted under programmes such as the local energy challenge fund with support from the Office of Gas and Electricity Markets.

However, I note that the minister will not support our call for an all-energy target today. I hope that, with the publication of the draft energy strategy in January, he will take the opportunity to renew our collective ambition in the Parliament and look to countries such as Norway and the Netherlands that are now pinning dates on the phasing out of fossil fuel-powered cars.

In a debate about potential and ambition, it is also right that we challenge the assumption that the current pipeline of electricity projects will still be there in years to come in the face of what can only be described as ideological attacks from the Westminster Government. I accept that we have a regulated market for electricity in the UK and that the reforms that were put in place by the Westminster coalition Government were designed to deliver the lowest cost to consumers with an effective route to market for the energy infrastructure that we will be relying on for the generation to come at least.

The pathway of progress for onshore wind in particular has delivered more energy generation for less and less cost to consumers year on year. Costs are down in the supply chain, as are operation and maintenance costs. In addition, more powerful and efficient turbines are able to harness more of the infinitely renewable wind resource that Scotland is blessed with. The expectation in the industry is that onshore wind and, in time, other technologies will become subsidy free and will be able to generate on the wholesale price of electricity alone.

However, instead of Westminster giving the industry a stable financial bridge to cross the narrowing cost gap to a subsidy-free future, it has simply pushed the whole onshore wind and solar sector into the abyss. Confidence is down, jobs have been lost and long-term investment strategies are being questioned. With the renewable obligation cut, public sector projects such as Stirling Council’s 5 megawatt solar farm have fallen short agonisingly close to grid connection, losing millions of pounds that could have closed attainment gaps, reabled the elderly and fixed potholes locally.

What was the point in the huge subsidy cuts? The Don Quixotes of the Tory Government had already successfully railed against turbines in the home counties by introducing draconian planning policies, despite the fact that their own research showed growth in public support for wind across the UK. There was no need for them to kick against their own market ideology by fixing a scheme to exclude the lowest-cost technology of onshore wind from the mix, because they had already loaded the planning system.

With regard to the target that Mark Ruskell is asking for in his amendment, does he agree that, if we were to set a target of 50 per cent, we would need to do an impact assessment? Some of the measures that he has been talking about would make achieving that target quite difficult.

That is, rightly, for the energy strategy to set out. Today, we are putting forward a number of policies and ideas that should be taken seriously by the Government. I hope that the minister will reflect on them when he closes the debate.

To return to the issue of subsidy and CFD, what was needed was a balanced approach to investment that recognised the advantages of onshore wind as a mature technology and put the market technologies of wave and tidal on a clear pathway to commercialisation. Instead, we have a second CFD round that is dominated by offshore wind, which has a big role to play but not to the exclusion of the technologies that are already ahead of it and those that are coming up behind.

There is a strong future for onshore wind, and the trend towards higher turbine heights means fewer turbines in the landscape. With many projects entering their second decade, there is a golden opportunity for Scotland to repower, replant and, where appropriate, extend wind farms. Taking a landscape-scale approach to degraded uplands could deliver a triple win of massively increased power output, opportunities to invest in habitat restoration and renegotiated community benefit agreements, with more profit sharing and partnership built in.

We see island communities reaching out for the onshore wind developments that could release nearly three quarters of a billion pounds-worth of investment; grid constraints that have had a stranglehold on their economic potential for years being finally released; and land reform delivering the foundation for a renewables legacy that will ensure that wealth and wellbeing are shared across the islands for generations to come. Allowing island wind a place in the CFD process that recognises both the challenge and the enormous social and economic potential, alongside a renewed target for all energy, has to be a priority of every member of the Parliament.

I move amendment S5M-02919.4, to insert at end:

“; agrees that the forthcoming energy strategy should set a target to ensure that 50% of all Scotland’s energy needs across the heat, electricity and transport sectors are met by renewables by 2030; recognises that sustained growth in renewable energy generation, as well as new policies to guide the re-powering of existing sites and promote domestic industry and innovation, will be required to meet these targets; believes that growth in renewables must benefit the common good, and therefore supports the creation of a Scottish renewable energy bond and government-owned energy company to help people in communities develop, build and own more low-carbon energy capacity.”

We move to open speeches of up to six minutes, please. Ivan McKee will be followed by Liam Kerr.

15:26  

Scotland has made tremendous progress in green energy infrastructure and capacity over recent years, and we now generate more than half our electricity requirements from renewables. In addition, Scotland’s contribution to the UK’s renewable energy supply targets is substantial, at 26 per cent of the UK total. However, Scotland has ambitious targets for the future: to meet 100 per cent of our electricity needs from renewables by 2020 and to focus on making significant inroads into converting heat and transport energy supply to renewables over the coming years.

It is worth taking a step back and remembering why we are focused on the shift towards renewables. The impact of climate change on our planet is clear, but our response is not about saving the planet—it will do just fine, as it has for the past 4 billion years. It is about keeping the planet habitable for Homo sapiens—it is pure self-interest. Scotland’s work to build our renewables capacity means that we not only meet but exceed our climate change targets, and Scotland’s progress in that area is internationally recognised.

Renewables provide clean energy, mitigate the effects of climate change and provide the opportunity to leverage new technologies to build the industries of the future. However, as with all energy technologies, renewables require market stability in order to support new investment in capacity and development. That is the context in which we must view the UK Government’s contracts for difference pricing mechanism and its commitment—or lack of it—to Scotland’s renewables technologies.

The UK Government’s recent announcement of the CFD structure, which had been delayed since the summer because of Brexit, was very disappointing in the way that it limits the growth of Scotland’s renewables potential and stifles Scotland’s renewables ambitions. There is no ring-fenced funding for marine or onshore wind in the CFD structure, which makes it unlikely that projects for those technologies will win funding. However, nuclear power will receive funding: the Hinkley Point C deal will provide support pricing set at £92.50 per MWh, which is almost double the current wholesale price of electricity. In contrast, onshore wind costs have continued to fall, with the last round of support at around £80 per MWh and the industry working towards much lower prices as technologies mature.

Island wind offers a route to establishing high-efficiency wind generation as a significant contribution to our energy mix and an economic contribution to our island communities. Despite repeated assurances following the 2013 consultation that it would do the contrary, the UK Government has, in effect, excluded island wind projects such as the Viking project in Shetland from the CFD allocation. Instead, the UK Government has kicked the can down the road by initiating a further consultation, which will delay implementation and create even more uncertainty.

Many parts of the renewables sector, such as tidal and wave, are in their infancy. Those technologies will become mainstream in the future, and the countries that invest in them now will reap the economic reward for decades to come. The UK Government has failed to recognise the potential of those technologies and to invest in them. At the same time, it is making a £35 billion bet on unproven European pressurised reactor nuclear technology at Hinkley C. That is not good for consumers, for industry in this country or for Scotland.

The recent CFD announcement was disappointing news for wave and tidal as no minima was set aside for those technologies. Without minima, wave and tidal projects will be included in a cost-competitive auction process alongside offshore wind projects, which are significantly cheaper due to the technology’s maturity and scale. Given the comparably high cost of wave and tidal projects, it is unlikely that they will secure a contract in a competitive auction. That is especially problematic for Scottish firms, which are in a dominant position in the marine sector.

It is a truism that the wind does not blow all the time, although sometimes in Scotland it feels like it does. The need to balance intermittency can be—and is being—tackled in a number of ways, such as through smart demand management, battery storage technologies and the use of local solutions to feed into the grid. The use of pumped hydro has a large role to play in balancing energy supply, allowing excess generation from wind to be stored as hydro energy for future use.

Major hydro projects at Cruachan and Coire Glas, with totaI additional capacity of 1GW, are costed, funded and ready to proceed, prevented only by the lack of CFD support from the UK Government. Despite UK Government ministers applauding Scotland’s renewable energy success, their decisions continue to create serious uncertainty across the sector and undermine Scotland’s renewables potential.

Renewables is an industry Scotland was made for. Blessed with the fabulous resource of our oil and gas sector in earlier decades, Scotland has hit the jackpot not once, but twice, with our renewables potential. We need to support and to develop the sector not just to meet our own energy needs and provide for export or build manufacturing industries on the back of the sector, but to build up levels of expertise in the sector, similar to what has been achieved in the oil and gas sector, providing us with a revenue stream and high-value employment far into the future.

Low-carbon industries in Scotland generated £10.7 billion in turnover and support 43,000 jobs, and they have the potential to do far more to support our economy of the future. However, we need the UK Government, which holds the economic levers in the sector—as it does in many others—not to stand in the way of Scotland’s interests.

15:32  

I live in Aberdeen. I have worked there—predominantly in advising the energy sector—for more than 13 years. I am now privileged to represent it as part of the North East Scotland region, and have spent a great deal of time since being elected seeking to understand in ever-greater depth its energy needs and energy delivery.

The city has grown rich thanks to North Sea oil and gas. Until recently, it had the highest concentration of millionaires in the UK outside London and it boasted an unemployment rate below 2 per cent. In 2009, as the rest of the country suffered under Labour’s great depression, it proudly declared, “No recession here.”

Times have been tough of late, however. Oil & Gas UK estimates that 40,000 jobs have gone from the industry. Hotel takings are down 50 per cent and visitors through Aberdeen airport are 20 per cent lower year on year. Mortgage arrears have spiralled to double the national level and could rise further as unemployment increases, as the EY report stated yesterday. All that has happened despite the UK Government’s considerable support. In welcoming the autumn statement, Oil & Gas UK said:

“We are pleased to hear the Chancellor re-commit to HM Treasury’s Driving Investment plan today.”

Will the member take an intervention?

Will I get time at the end if I do so, Presiding Officer?

No.

Then, no. I am afraid not, Mr Stevenson.

I welcome the news that

“Vattenfall has agreed to move into Aberdeen harbour to support the construction of Scotland's largest offshore wind test and demonstration facility.”

It has signed a 25-year lease with Aberdeen Harbour Board, so it is the first offshore wind operator to invest long term in the port’s facilities. I cannot wait to visit the company at Commercial Quay when the facility becomes operational in the second quarter of next year. It is a shining example of the future of the energy industry—an energy sector that includes a mix of renewable and traditional energy. Nowhere is more readily equipped or has the expertise, the infrastructure and the experience for building and maintaining an offshore energy sector than the city and shire of Aberdeen. I am confident that that investment is a sign of things to come as the city diversifies to adapt to a modern energy future. That energy mix is key to the future, and our amendment

“urges the Scottish Government’s forthcoming energy strategy to set out a balanced energy mix”.

We have to stop talking about wind and tidal power as the be-all and end-all.

However, the debate is on renewable energy, so let us talk about how the UK Government has invested record amounts in the development of the offshore wind sector in Scotland and across the rest of the UK. Pre-2010, the average level of investment in renewables at UK level was £3 billion; the figure is now £7 billion.

Will the member take an intervention?

No—I am afraid not.

Let us talk about how the UK is now in second place, behind Denmark, in the most recent climate change performance index. Let us talk about how the UK Government has pledged to end the use of coal in our energy mix by 2025, and let us not forget that £290 million has been announced for the next round of contracts for difference funding in order to support less-established technologies including offshore wind, biomass, wave, tidal stream and geothermal projects.

I represent a party that is committed not only to ambitious emissions targets, as Alexander Burnett said—that was demonstrated by the UK’s continued leading stance at the 21st session of the conference of the parties to the United Nations Framework Convention on Climate Change, or COP21—but to our energy security and to creating a genuine energy mix. I represent a party that is committed to an energy mix that includes shale gas, unlike the party that imposed a moratorium on even exploration—I repeat, exploration—for shale gas in Scotland, and which claims to be environmentally aware but supports the shipping to Grangemouth of shale gas from halfway around the world in massive supertankers.

Will the member take an intervention on that point?

I really cannot, because I do not have time—

It is up to you, Mr Kerr, not me.

I will take an intervention on that point.

That is so kind. Would Liam Kerr care to reflect on the fact that licensing for bringing the product of fracking into the port of Grangemouth is done by the UK Government?

I will reflect on that, but the point remains the same. One cannot bring shale gas from halfway around the world, try not to turn up to a photo opportunity and then hope that no one notices. Well, the people of Scotland noticed.

The people of Scotland also notice the Scottish National Party paying lip service to local community concerns when wind farm applications are rammed through against residents’ wishes.

Will the member take an intervention?

No. I simply do not have time.

Two thirds of wind farm applications that local authorities rejected have been overturned in 2016 so far, including the 22-turbine development in Altnaharra, which is the first wind farm to be approved in a designated wild land area since the Scottish Government revised its planning framework. Mr Wheelhouse justified his decision by saying that the project has “popular support”: that will be a petition that was organised by an SNP supporter and which was enthusiastically supported by locals in Fraserburgh, Dunfermline and Doncaster.

I note with interest that the WWF said in its briefing paper that transport accounts for a quarter of Scotland’s energy consumption. I note it, and I note that only the Conservative amendment has picked up the issue for today’s debate and that the UK Government has announced in the autumn statement that it will invest a further £390 million by 2020-21 to support ultra-low emissions vehicles, renewable fuels and connected and autonomous vehicles.

Unlike the SNP, the Conservatives are genuine about creating an energy mix, genuine about investing in renewables, genuine about trying to combat the chronic lack of insulation in Scottish homes, and genuine about standing up for local communities. That is what our amendment seeks to do, so I urge members to support it.

15:38  

Renewable energy is one of the keys to an economically successful and sustainable Scotland. In his speech, the minister gave a full picture of the Scottish Government’s considerable efforts to ensure that Scotland is a leader in the success of renewable energy globally.

I come from the north-east of Scotland, so I have a particular interest in our energy sector. For one thing, the oil and gas industry directly facilitated my being brought up in the area—in Newburgh, in my constituency—because my father is an engineer, and his engineering skills brought him to Aberdeenshire. He was brought up in Clydebank; like many folk from the town he worked at John Brown & Company engineering.

Cut to the late 1970s: I do not need to remind any member what happened to manufacturing and heavy industry on the Clyde as a result of Tory policy. The shipyards were decimated. Many engineers like my dad upped sticks and went to Aberdeenshire to help to develop the oil and gas industry, accompanied largely by their shipbuilding colleagues from the north of England, whose heavy industry suffered the same fate under Margaret Thatcher.

Yesterday, I read an excellent article by Dick Winchester, who is an engineer of a similar vintage to my dad and who writes in The Press and Journal every week. Mr Winchester pointed to the huge number of manufacturing and engineering projects that our renewables industry requires, and the huge number of jobs that renewables innovations and manufacturing could create. He said that there is massive potential for engineering talent to be redeployed in new industries that will develop our future greener world. That would be a third wave of Scottish engineering—ships, then oil and gas, and now renewables.

We have the natural resources that can generate the energy, but more needs to be done to ensure that Scottish manufacturing and innovation are once again redeployed. Scotland is an engineering nation and we have amazing companies doing vital work, but our northern European neighbours are making the most of the opportunity that Scotland’s natural resources offer. Dick Winchester’s article mentions Vestas, the Danish engineering company that manufactures wind turbines and employs more than 20,000 people. He mentioned Vattenfall, a Swedish company that is working as we speak in Blackdog in my constituency to get the substation for the Aberdeen offshore wind farm under way. Those innovative companies are investing in Scotland and working in partnership with us, which is most welcome, but the environment for Scottish-owned businesses also has to flourish and to be the kind of forward-looking environment that those other small countries were able to foster.

Gillian Martin will recognise the importance of targets having been set in driving progress such as we have seen in renewable electricity. Does she also acknowledge that the same would be true for transport and for heat, and that we need to drive strong progress in order to develop new industries?

I am not going to deal with that in my speech, but I broadly agree with Mark Ruskell.

It is disappointing that the UK Government has not provided a minimum allocation for Scotland’s marine energy technologies—an area in which we have probably the biggest potential for innovation and some of the world’s most innovative companies. The lack of action on contracts for difference, which the Scottish Government asked for assurances on, makes life even harder for our renewables industry. That comes on top of early closure of the renewables obligation scheme, for which the industry has roundly and rightly criticised the Government.

Then there is the cancellation of the wind farm subsidy programme. The message that that gives to investors is the big problem. It says that the rug of Government incentive and support can be pulled from under their feet at any time, just as it was with the carbon capture project that Peterhead was leading on and which could have been a giant step in managing our carbon emissions—not to mention that it would have provided jobs for the north-east and that the technology would be exported to other countries, as in the cases of the northern European firms that Mr Winchester mentioned in his article and the Austrian-built turbines that Jackie Baillie mentioned in her speech. It takes time to recoup investment from new technologies, so removal of incentives is unhelpful at best, and at worst leaves a destructive lasting legacy in the minds of investors.

Today I asked Dr Lena Wilson of Scottish Enterprise what her key asks of both Governments were in facilitating diversification of skills from oil and gas into the renewables sector. She welcomed the Scottish Government’s actions in that area. She heads up the transition training fund and is proud of its achievements so far, but she said that the UK Government is making the environment for renewables innovation challenging. Her appeals to the former UK Secretary of State for Energy and Climate Change, Amber Rudd, did not bear fruit in that area, so she urged her successors to look again at what they could do to create a more attractive environment for potential investors and innovators.

We are already way ahead of the rest of the UK in supplying renewable energy. As Ivan McKee mentioned, renewable electricity generation in Scotland made up approximately 26 per cent of total UK renewables generation in 2015. Of course we can do more, but it often seems to be the case that the priorities of the two Governments are at odds with one another on energy policy.

Scotland has built ships, we have built offshore platforms, and we have the engineering expertise to deliver decommissioning projects: we cannot be left behind as European neighbours surge forward. Their Governments have facilitated innovation through investment and tax incentives. We need the same commitment from the UK Government, which needs to appreciate the resources that Scotland has, both natural and in our people, and to take a more constructive and forward-thinking approach that offers renewables the same support that it gives to the more costly and precarious nuclear and fracking projects with which it is obsessed.

I remind members that, when you take an intervention, you should take your seat so that we do not have two members standing at the same time. I know that Mr Macdonald, whom I now call, does not need to be told that.

15:45  

When it comes to building a renewable energy powerhouse, Scotland has three critical advantages: we have the natural resources; we have the political will across parties, as we have heard; and, in the supply chains that have been built up to support offshore oil and gas over the past 40 years, we have the formidable concentration of energy and engineering expertise from all over the world that makes Aberdeen the energy capital of Europe.

The Aberdeen supply chain has been innovative from the outset, enabling the recovery of more natural resources from further below the sea bed in more hostile environments over a longer period of time than would once have been thought possible. The same pioneering spirit and technological innovation are needed to realise the potential of renewable energy and to turn aspiration in that field into reality, and it is largely the same people and businesses who can help to make that happen again.

There are, however, some challenges to be met. Renewables UK has yet to recognise that much of what its members want to do in the marine environment is already being done, particularly regarding safe working practices offshore. It is deeply frustrating for workers who have been made redundant as a result of the current downturn in oil and gas to be told that their hard-earned offshore safety certificates are not recognised by marine energy employers, even for aspects of the job that are virtually identical in both sectors. Safety standards set by OPITO in the North Sea are recognised worldwide as the best in offshore oil and gas. Unemployed oil workers who want to make their own transition to renewable energy should not have to spend precious redundancy payments on repeating training that they have already done simply in order to tick a bureaucratic box. I hope, therefore, that the Scottish Government will add its voice to the calls that have already been made by oil workers unions and training organisations for Renewables UK to look at all that again. Even where practices differ—and they do, in some respects—short and affordable conversion courses would surely be to mutual advantage.

As the minister knows, last week I was delighted to welcome ABB, which was holding its first reception at the Scottish Parliament. ABB is a specialist service company that supports oil and gas and other sectors, and its UK operational headquarters are in Aberdeen. Now it wants to drive the new technologies that will shape the industries of the future, from digital manufacturing to electric vehicles. Vattenfall, which has been mentioned, is another big inward investor in the north-east. It has just agreed terms with the Aberdeen Harbour Board for an onshore base for the European offshore wind deployment centre, which is to be built in Aberdeen bay. Just as Orkney hosts the European Marine Energy Centre, so Aberdeen will host Europe’s prime site for proving new offshore wind technologies—despite the opposition of a well-known local hotelier who was recently elected as the President of the United States.

International companies such as ABB and Vattenfall enjoy working in Aberdeen, as we have heard, because of the strength and depth of the engineering sector there. They like the fact that the whole city embraces energy and engineering as great ways to make a living. They also like the fact that Aberdeen is a city that plans for the future. Rebranding the oil capital of Europe as the energy capital of Europe some time ago was a symbol of that forward thinking, and the Aberdeen city region deal that was recently agreed with the UK and Scottish Governments also looks to the future beyond the production of oil from the North Sea.

Aberdeen City Council set up the Aberdeen Renewable Energy Group to act as a catalyst for change, working with public and private sectors and with local communities, and there are many examples of the progress that has been made in recent years. The Donside hydro project in Aberdeen was recognised as the best community project in Scotland at the Scottish green energy awards last week. An urban village of social and affordable homes will generate its own power—and profits—funded by a large number of small investors based in and around the community itself. The city also has the biggest and best district heating network anywhere in Britain thanks to the efforts of Aberdeen Heat and Power. Connecting thousands of homes and many public buildings to heat and power grids has reduced carbon emissions and cut energy bills for people who were formerly in fuel poverty.

Aberdeen is also blazing a trail on transport. Last week, Paris, Madrid, Athens and Mexico City committed to ban diesel within their city limits by 2025, so the race is on to commercialise hydrogen fuel cell technology and the work that is being done in Aberdeen has put Scotland in pole position in that race.

Aberdeen has Europe’s largest fleet of fuel-cell buses and the UK’s largest and most efficient hydrogen production and refuelling station. The scheme has had valuable support from the Scottish Government and from the European Union. It is attracting huge interest in Japan, which sees hydrogen as the next big thing in energy, but if Scotland is to keep its lead in the area, Aberdeen needs the Government support to continue. I therefore ask the minister to agree that the work to turn aspiration into reality must not now be put at risk, and to confirm that the Aberdeen hydrogen bus project will receive the funding that it needs if it is to proceed to the next stage.

Scotland’s devolved Governments since 1999 have all set demanding targets for renewable energy production, and they have all been delivered. A target for jobs would be a good step to take at this stage, and there needs to be an increasing focus on transport and heat as well as power, as Mark Ruskell said. With the right support from government at every level, Aberdeen—as a centre of engineering, technology, skills and innovation, and as the energy capital of Europe long after North Sea oil—can play a big part in that process. That way, all our aspirations can be turned into reality.

15:51  

Jackie Baillie referred to the fact that David Cameron has not been very supportive of offshore wind. He is 100 per cent supportive of it—mind you, he is an SNP councillor in Aberdeen. That is perhaps not the David Cameron that Jackie Baillie had in mind.

Liam Kerr’s memory seems to be slightly shorter than mine. It was remembrance day when he and I were sitting round the table listening to Shell UK; I think that Lewis Macdonald was also there, and he might nod when I say that Shell indicated that it was considerably disappointed by the inadequate support that it was getting from the UK Government for many of the initiatives that it wished to pursue.

Another point that I would like to make to Liam Kerr is that Aberdeenshire has a higher concentration of onshore wind farms primarily because for many years the Conservative-led council there had a looser planning authority, which did not impose the same restrictions as the rest of Scotland on distance between wind turbines and communities, and I urged it to harmonise with others. Liam Kerr, who is new to us, is perhaps not as familiar with some of the history as others might be.

Some interesting things are said on the subject of renewable energy from time to time. Victoria Ayling was a Conservative Party candidate in the 2010 general election, when she nearly beat Austin Mitchell; she got within 714 votes of him. In 2015, when she was standing in the same constituency—Great Grimsby—for the UK Independence Party, she showed that startling insight that those on the right of politics sometimes do when she posed the question, “What happens when renewable energy runs out?” When it was drawn to her attention that that was perhaps not the most sensible thing to have said, there was a good deal of desperate back pedalling. On Thursday, she will make her third attempt to get to the UK Parliament when she stands in the Sleaford and North Hykeham by-election, once again for UKIP. Appropriately enough, her name will appear on the ballot paper immediately following the Monster Raving Loony Party and immediately before Bus Pass Elvis, whose candidate appears to be a gentleman called David Bishop.

A lot of nonsense is talked on this general subject. Some of it is merely amusing, but some of it is really serious indeed. Some unexpected sources point us to the seriousness of climate change and why renewable energy has such an important part to play. I will quote no less a person than John Brennan, who is the director of the Central Intelligence Agency. On 16 November 2015, he said that climate change was one of the “deeper causes” of instability. He identified it as one of a handful of key challenges that were creating the unstable world that his agency would have to engage with. That is why we should take this debate on renewables and the debate on the broader subject of climate change extremely seriously.

We have made progress in Scotland—that is for sure. Beating our climate change targets six years ahead of the date that we set in 2009 is absolutely terrific, but our emissions are but one seven-hundredth of the world’s emissions. We can set an example, but we are not the source of the entire problem.

The UK Government’s contribution to climate problems is much bigger, so it is bitterly disappointing to see that it fails to understand the best economic way of tackling the issues that are before us. Contracting a price that is twice the market rate for nuclear power from Hinkley Point is not only foolish in relying on a technology that is unproven—and from the early attempts to implement the technology that Hinkley Point C would depend on, looking to be unsuccessful—it is economically benighted and unhelpful. The money could much more usefully be installed in proven technologies for renewable energy. The low-carbon contracts company that I referred to in my earlier intervention is part of the quite complex infrastructure that surrounds contracts for difference—there are six significant parties to those contracts, which makes things far from easy. That company certainly did not give us in its contracts for difference booklet for 2016-17 any prior insight into the UK Government’s volte-face.

I hope that the UK Government will listen to this debate and, more to the point, that it will think of not just the investments that are being made in renewable energy and the value that is derived from those, but the key opportunity to re-exploit the huge skills that have been built up in Scotland, the north of England, East Anglia and throughout the UK in offshore gas and offshore oil, which Lewis Macdonald and other members referred to. Both industries have been around for decades, and we can make much of them in the future.

15:57  

I should start by making members aware that I own a microturbine and a ground-source heat pump. However, that is only one of the reasons why I am grateful to Paul Wheelhouse for allowing members this debate on Scotland’s renewable energy sector. The issue is vital for this country, but it is particularly significant to the constituency that I represent, which I will talk more about shortly.

I welcome the minister’s constructive approach, which reflects the strong cross-party support that Lewis Macdonald referred to. That has characterised the approach to such issues since the Parliament was established. As Scottish Renewables highlighted in its briefing, the political consensus has helped to reduce risk and enabled the sector to deliver advances in a relatively short time, such as renewables supplying 57 per cent of Scotland’s gross electricity consumption in 2014; generating £10.7 billion of turnover and supporting 43,500 jobs across the low-carbon industries in Scotland; and the displacement of more than 13 million tonnes of CO₂ in 2015.

Despite that progress, challenges remain, as others have acknowledged. Sadly, since 2015, the UK Tory Government has seemed intent on undermining that progress while putting at risk our ability to achieve future emissions reduction targets and jobs growth.

It is disappointing to see Alexander Burnett seeking to legitimise that approach in his amendment. I accept that contracts for difference offer good opportunities for offshore wind, and I welcome that, but it is beyond me how he believes that wave and tidal projects stand the remotest chance at this stage of bidding competitively for any of the available funds. Removing any minima for wave and tidal generation in effect locks those technologies out of any funding until 2021 and probably later. It also sends entirely the wrong message to developers, supply-chain companies and investors.

Instead of repeating the nonsense that wave and tidal energy can compete on price with offshore wind energy, Mr Burnett and his colleagues should join in making the case for capped support along the lines that were previously envisaged. The number of projects that are involved and the hurdles that they still need to overcome mean that any UK Government outlay would be low and slow. That is in marked contrast to the boost that such a cap would give to confidence in the wave and tidal sectors.

The decision to consult on an island strike price beggars belief. We have been around the houses on that twice already. Moreover, the framing of the consultation makes it clear that it is just a mechanism for allowing the UK Government to dump commitments that were made under the previous coalition.

That is not the way to make energy policy, build confidence or secure future investment in renewables. We need our islands to play a full part in delivering the renewables revolution. That will require new infrastructure and meeting up-front cost that must be reflected in the funding that is made available to support island-based projects.

In Orkney, the approach of UK Tory ministers to those two issues alone is having a noticeable effect. As confidence and activity leak away, so do jobs and income. The waste that that represents is shameful, and it brings the potential loss of innovation, skills and expertise, as picked up on by Jackie Baillie.

We need a much stronger focus on supporting innovation, on which the UK and Scottish Governments’ language is in much alignment. I urge the minister to take the lead, challenge his UK counterparts to follow suit and, by all means, use Orkney as a test bed. Our islands have an impressive track record as a living laboratory, but we have the potential to do more. On energy management and storage, the take-up of micro and community-owned renewables, the roll-out of electric vehicles and hydrogen-fuelled ferries, innovation in tackling fuel poverty and delivering more energy-efficient homes and public buildings, Orkney’s living laboratory is genuinely pioneering. I hope that the energy strategy that is due out next year will capture and reflect the fact that Orkney is much more than EMEC and, indeed, the wider area of marine renewables.

As for innovation, let us not forget that it has a happy knack of securing wider benefits. For example, work that Sustainable Marine Energy did recently in Orkney in relation to rock bolts is now helping in the aquaculture sector, at precisely the moment when SME is being forced to scale back its renewables operations in Orkney. To allow more such innovation to happen, the minister will have to dip into his pocket, as will his UK colleagues, perhaps through finally delivering actual benefit from having designated the Pentland Firth and Orkney waters as a marine energy park.

Meanwhile, power purchase agreements and renewable energy bonds seem to offer opportunities and scope for supporting innovation while growing the supply chain and providing routes to market for renewables technologies. All those are welcome.

Before I close, I will touch briefly on some of the issues that are less well covered in the Government’s motion, which I am happy to support. I have reservations about a Government-owned renewables company, but Mark Ruskell’s amendment very fairly captures the task that is ahead on heat and transport, where the forthcoming energy strategy really needs to show the Government upping its game and being more ambitious.

Having 50 per cent of our energy come from renewables by 2030 is the scale of what needs to be done. As WWF highlights on heat, which accounts for up to half of our energy usage at the moment, figures stand at about 5 per cent. Key to meeting our ambitions in that area will be a warm homes act, which Scottish Liberal Democrats and other parties have proposed. As well as helping to deliver clean, affordable heat for homes and businesses, such legislation could pave the way for progress, finally, on district heating in Scotland.

On transport, more ambition is again required, which makes the Government’s position on air passenger duty and Heathrow expansion all the more inexplicable. However, it is helpful that WWF and Scottish Renewables have laid out proposals for the electrification and decarbonisation of our transport system. Greater incentives to take up electric vehicles and other sustainable vehicles can include bus lanes, priority parking, low-emission zones and a major expansion and improved maintenance of charging and refuelling points.

Thank you.

Presiding Officer, I have no problem in joining the minister—

You must close now—I am sorry, Mr McArthur.

16:03  

I was eager to participate in today’s debate on renewables because I am a passionate supporter of the industry. The need for clean energy is indisputable, and the potential for green energy around the Highlands and Islands is unrivalled.

We have suffered centuries of depopulation in the Highlands and Islands but, if we could harness that energy potential, it could transform the region from a low-wage economy to one that not only enables our young folk to stay but attracts people in.

We have been generating electricity from hydro schemes for more than 100 years. More than half of Scotland’s hydro schemes are in the Highlands and Islands area, and today hydro power contributes about 12 per cent of Scotland’s electricity, with considerable potential remaining to introduce new schemes and expand or improve the efficiency of existing facilities.

The sea off the north coast of Scotland and around the Orkney Islands contains half of the UK’s, and a quarter of Europe’s, tidal resource. The Shetland Islands and the waters around Argyll also have great potential.

Orkney is the home of the European Marine Energy Centre, which was established in 2004 and is still the world’s only grid-connected wave and tidal test site. In August, the world’s largest tidal turbine began trials in Orkney, while power was exported to the grid for the first time from a pair of tidal devices in Shetland. The Pentland Firth is the location for MeyGen, which is the world’s largest tidal stream array project and which is under construction.

I move on to wind. Scotland is one of the windiest countries in Europe, and it is no surprise that the Highlands and Islands have the UK’s most sustained wind regimes for turbines. The Burradale wind farm in Shetland has the world record for the highest capacity of a wind farm. Almost 500 onshore wind turbines are operating in the Highlands and Islands. On the point about the Altnaharra wind farm that Liam Kerr raised, I say that we should not believe everything that we read in the newspapers. There might well be some support from outside the area, but that does not detract from the considerable amount of local support and the unanimous support of Highland Council that the project received.

Many a fragile community in the Highlands and Islands is coming back to life because of wind farm money. More than £10 million of community benefit has been paid this year to communities that host renewable energy projects, and it is paying for a range of activities, from local transport schemes to trips for the brownies.

Scotland is home to around a quarter of the whole European offshore wind resource. Offshore wind had led to investment of more than £190 million in the Scottish economy by April this year. Exciting projects are planned for the waters around Scotland, including the Beatrice offshore wind farm in the Moray Firth. My region is well placed to assist in the delivery of a dynamic offshore wind sector.

Scotland is in the midst of a global energy transition towards a renewable energy future and we are already enjoying the economic benefits. The Office for National Statistics has shown that low-carbon industries in Scotland generated £10.7 billion in turnover and supported 43,500 jobs directly and in the supply chain. Independent analysis has found that, if it plays to its strengths, Scotland could have almost entirely renewable electricity generation in 2030 without the need for coal, nuclear or new gas generation capacity.

We might think that low-carbon technologies that are in early development and which have the potential to unlock energy sources in remote and fragile communities would warrant whole-hearted support from Governments until they became fully commercially viable. However, as is often the case, we have a tale of two Governments. While the Scottish Government sets ambitious targets and drives innovation, the UK Government has made U-turns on promises and failed to deliver a route to market.

In the latest announcement of contracts for difference, the UK Government has put off a decision about how to provide connection capacity for projects that are sited on Scotland’s islands; failed to ring fence funding for the wave and tidal sectors; and left onshore wind and solar in limbo, without any contractual framework to support long-term investment, although they are the cheapest of any form of electricity.

As for the Conservative amendment, it is wholly wrong for the Tories to pass off what is happening as an honest consultation on island wind. They are consulting on a negative proposition, and the people on the islands recognise that it is a complete betrayal of island communities. Those decisions are totally at odds with the ones that have been made about nuclear capacity at Hinkley Point, where a 60-year-old technology has been provided with cast-iron certainty and subsidy, although we have not yet solved the fundamental question of what to do with the waste.

The lack of support and the grid constraints are causing huge frustration in Lewis and Shetland, but nowhere more so than in Orkney, which is generating more electricity than it can use. With UK Government support, it could export its excess but, as that support cannot be relied on, Orkney is researching its own solutions and innovating. The people of Orkney are aiming for the area to become established as a global centre for energy storage, and I agree with Liam McArthur that Orkney is perfectly placed to be a living laboratory.

A series of initiatives has been put in motion, including a hydrogen project that is using tidal and wind power to produce fuel—

That is where you must conclude. Thank you very much. Time is tight—keep looking at the clock. I call Donald Cameron.

16:09  

Thank you, Presiding Officer. As someone whose name has been confused with both David Cameron and Donald Trump, I am grateful that you got my name right.

I refer to my entry in the register of members’ interests and the reference to renewable energy therein, as well as my shareholding in Green Highland Renewables (Achnacarry) Limited. It is to hydro power that I would like to turn in my remarks today, not least because it is the technology that I know best, due to my personal experience of it in running a family business—as Mr Wheelhouse will know from a visit to Lochaber in August—but also because of the benefit that it has brought to communities across the West Highlands in particular.

There remains huge potential for Scotland to lead the world in hydro energy, and my own Highlands and Islands region in particular can continue to be the hub for that development.

Once all forms of energy sources are included, hydro power accounts for only 12 per cent of our total electricity supply. That may be small but it is not insignificant. Scotland is the UK leader in hydro power and has been for some time. We are lucky to have the natural resources to produce hydro power energy in this manner. It is perhaps obvious, to say the least, that much of Scotland is rich in rainwater and my answer to Jackie Baillie is that we make use of our rain already.

What is so interesting about hydro power is that it is such an old technology—perhaps the oldest renewable energy of all. The radical history of the hydro revolution in the Highlands since the days of Tom Johnston is well known and I pay tribute to that record.

Will the member give way?

Sorry—I do not have time.

In a different manner, the aluminium smelter in Fort William—much in the news recently—is of course also a massive hydro power station. As a child, I recall looking at the two massive pipes running down the side of Ben Nevis towards the smelter and asking an adult what was in them. “Whisky”, they replied. I now know better—of course it was water.

However, there has been a second revolution in the last decade, which again has seen power to the glens and which we must all recognise has been driven by the renewable energy policies of successive UK Governments of different political hues. One of the big reasons for that is the feed-in tariff scheme, which helps more people to produce energy on a smaller, micro level—even from home. The feed-in tariffs mean that the cost of installation can be offset over time and deliver a cost benefit in some cases.

Will the member give way?

Can I please make some progress first, given the time?

The feed-in tariff in hydro—and indeed the ROC that it succeeded—has enabled communities in the west Highlands to directly benefit from that revolution, not to mention the economic stimulus that it has provided to the Highland economy, in particular to the building trade and associated contractors. There are remote communities in Morvern, on Mull and in Wester Ross, to name but a few, that have benefited. Exciting community projects with innovative funding arrangements have allowed communities to own hydro power schemes outright—or at least to benefit from them via their own rental income—or to be given a community benefit by the developer.

To those who say that the UK Government has ended the feed-in tariff, I reply that that is not the case. It has lowered the subsidy and focused it on certain power outputs in specific technologies, but the feed-in tariff remains and will remain until 2019.

Does the member agree that the removal of the certainty that business needs was what was most catastrophic about the Tory Government’s decision to cut the solar FIT input early and that that sort of business strategy by the Tory Government must not be allowed to happen? I hope that the member will take that back to his Tory colleagues at Westminster.

I do not agree, but I will certainly take that point back to them.

As I said, the feed-in tariff is still in place and it will remain until 2019. That is just one example of continuing UK Government support for renewable energy.

With hydro power, the critical issue that often defines whether a project will go ahead is not funding, or indeed planning, but grid connection. That is the real determining factor.

There is of course a question of capacity—there are only so many streams, rivers and burns to tap. However, it is wrong to say—as the minister did—that only legacy schemes will be built. The easier schemes have perhaps already been built, but I am sure that future hydro projects will go ahead in the Highlands, not least because the pre-accreditation system, which allows an often crucial two-year timeframe between planning consent and commissioning, has been reinstated.

A decrease in subsidy is not new—since April 2014, a system of degression has operated whereby the subsidy slowly decreases over time. There are many purposes of renewable energy subsidy, including to kick start new technologies and to assist construction of well-established technologies for which the build costs are often prohibitive. Let us remember that renewable energy subsidies cost the general public, because they go directly on to our electricity bills. Therefore, subsidy simply cannot be unlimited and never-ending. I think that Mark Ruskell accepted that the ideal is a subsidy-free future.

Since 2000, there has been a huge increase in the amount of electricity generated from hydro. We need to do more to promote smaller renewable energy schemes in general.

Despite the Scottish Government’s relentless criticisms of the UK Government on renewable investment, since 2010 Conservative-led Governments have committed to £7 billion-worth of investment in UK-based renewable energy. We have said that we will invest a further £390 million by 2021 to support ultra-low emission vehicles. I remind members that it was a Conservative-led Government that set up the UK’s first Green Investment Bank here in Edinburgh. There is no question about the UK Government’s pragmatic and realistic commitment to the renewables sector. In a debate on renewable energy—

I am afraid that the member must close—I am sorry.

Okay—thank you.

16:16  

It is evident that we all believe in the strength of the renewables industry in Scotland, that it is a real success story and that we as MSPs need to do all that we can to support this vital industry. As has been touched on, the natural resource in Scotland is abundant and significant. We have 60 per cent of UK onshore wind capacity, 25 per cent of Europe’s offshore wind capacity, 25 per cent of Europe’s tidal capacity and 10 per cent of Europe’s wave capacity. Because of that, we have developed expertise in the sector and we have inspiring engineers, consultants, planners and lawyers.

Throughout my career before I came into politics, I had the great privilege of working in the marine sector with some extraordinarily inspiring and innovative pioneers, who literally were changing the world in their daily work. As a lawyer, I worked on onshore wind and other renewable projects and saw the depth of the expertise that we have in professional services. I will come back to why protecting them is so important.

Members have highlighted the MeyGen project of Atlantis Resources, which is such a success story, and the world-leading tidal company Nova Innovation, which is based in my constituency—I look forward to visiting it soon. There are also small companies such as Quoceant, which is also based in my constituency. We need to take the opportunity not only to recognise those companies, but to commit to supporting them.

As we reflect on that expertise and capacity in the Scottish economy, we should also reflect, as other speakers have done, on the huge contribution that we have made so far. In 2014, 57 per cent of Scotland’s gross electricity consumption was from renewables, and we are well on the way to 100 per cent by 2020. That is the environmental contribution. Economically, the Office for National Statistics has shown that low-carbon industries in Scotland generated £10.7 billion in turnover and supported 43,500 jobs directly and in the supply chain. Socially, it must be acknowledged that £10 million of community benefit funds have been contributed to communities that host renewable energy projects. Environmentally, socially and economically, the renewables sector makes a huge contribution.

Moving on to policy, given all of that advantage, expertise and progress made, we need to think about how to move forward. That is why the recent CFD announcement is so disappointing. Scottish Renewables has said that, like all generators, renewable energy developments need some certainty to support investment and that the recent CFD allocation has left many parts of the renewable sector without a clear route to market. WWF has stated that there has been a real missed opportunity to provide long-term confidence.

Many of the points about the problems with the CFD allocation and UK Government policy have already been made, but I want to emphasise some of them. Mark Ruskell spoke powerfully and clearly about the fact that a lack of a CFD allocation to onshore wind makes no economic or logical sense. The advantages of investing in such a mature technology to build on the strengths and to bring down costs, and then to move to a position where we do not need subsidy, are absolutely clear and true.

When it comes to the marine development, as I know from my previous experience of working in the industry, the fact that no minimum amount of the CFD budget has been allocated makes no sense in terms not only of that section of the renewables industry trying to compete but of building on the comparative advantage that we already have in expertise, providing future jobs and, as Jackie Baillie rightly stated, making a viable supply chain.

That uncertainty in the CFD allocation is, of course, supplemented by Brexit. I mentioned earlier Nova Innovation, which is based in Edinburgh Northern and Leith, doing great work with its tidal project in Shetland. Last week, at the green energy awards, the company won an award. The minister was there, as were Alexander Burnett and Lewis Macdonald. At that award ceremony, not only was there a recognition in the room of the strength of the Scottish renewables industry but there was a palpable sense of uncertainty and worry. Those of us who were there must all have felt it.

The message that needs to go out clearly from the debate is that the Scottish Government is doing all that it can to support the industry and we need our Scottish Conservative colleagues, instead of making tribal remarks in speeches that were written by researchers, to get on the phone to ministers and the secretary of state in their Government and ask them to get behind one of Scotland’s most important industries: the Scottish renewables industry. They have the chance to make a real difference to a vital element of Scotland’s economy and to make progress on the environment. They should do the right thing, get on the phone, use any back channels that they have and support Scotland’s vital renewables industry.

16:21  

Public investment in renewable energy is not a luxury; it is a necessity. It is true that, across the world, energy is bought and sold like any other commodity, but it is not any other commodity. Renewable energy especially is a natural asset, but it is also a national asset and it needs to be supported with a national policy for energy that is coherent, credible and underpinned by an industrial strategy that generates jobs in our manufacturing base.

That is why we say that no Government—not because it is a UK Government but because it is a Tory Government—should be allowed to abandon that natural endowment for the sake of short-term political fixes. No Government should be allowed to leave that public service to the lottery of the market or leave the switchover to renewable energy simply to the economics of short-term profit and loss. That is why we are critical of the Tory Government’s decision in the second round of the contracts for difference to exclude island onshore wind projects and to downgrade marine renewables.

Labour’s goal is that we should meet 50 per cent of our heat and transport demand in Scotland from renewables by 2030. Just yesterday, I met a fledgling firm, BMM Energy Solutions, which is still working out of a farm at Caldercruix in North Lanarkshire. It installs electric vehicle charging points. What struck me about my meeting was that here was a company based in central Scotland supplying the rest of the UK market, with contracts with York NHS, contracts with the London Fire Brigade for two electric vehicle charging points at each of the 75 fire stations in London and contracts across England with the Environment Agency, but only a limited number of contracts in Scotland.

It strikes me that we need, first of all, more support for small and medium-sized enterprises, which are expected to compete against transnational corporations in all aspects of public procurement, including renewable energy. Secondly, we need more leadership from all public bodies in Scotland, especially the Scottish Government, to support the shift and lead the move from the carbon economy to the sustainable society. Leadership by example is critical. Leadership at home is essential. Thirdly, we need to seize the opportunity that electric transport provides to help solve the problem of overproduction from renewables at certain times of the day and night and underproduction at other times. Electric vehicles can help to match demand to supply.

Next year marks the 40th anniversary of the death of the influential international writer and thinker—and National Coal Board chief economist—Fritz Schumacher. He said a number of interesting things in his life, but I will quote just one. In 1967, he said:

“An active relationship to the future is called ‘planning’. A passive relationship is called ‘forecasting’.”

I want us to start planning again. I want us to have a plan of action, and I want us to have a vision in our politics that includes renewable energy at its core.

We need an energy policy that is about ending fuel poverty, not least among our pensioners, about providing adequate heat and light and about tackling climate change, not about building lots of power stations and generating Monopoly-style company profits. We must learn the lessons of history and look towards human-scale, decentralised intermediate technology, with human values no longer coming second to economic imperatives but, instead, working together with them. There must be community ownership, including municipal ownership, of our energy systems instead of absentee ownership.

The energy that is saved through conservation is not controlled by big corporations or foreign Governments. Efficiency and conservation are more productive than drilling for energy, and conservation does not run aground on a beach in the Outer Hebrides on its way to Turkey.

We need a vision—a vision of an indigenous supply chain with steel rolled in Lanarkshire, made from recycled scrap, for wind turbine jackets that are fabricated in Fife and at Arnish point; pumps that are built in Glasgow; wind turbine towers that are assembled in Machrihanish in Kintyre; and wave technology that is pioneered in the Orkney Isles. That must bring with it the promise of jobs to rural and urban Scotland, the Highlands, the islands and lowland Scotland. We need a hub of research and development that brings together our colleges and universities with our industrial pioneers, with workers playing an active part. Upstream and downstream, jobs must be created in the supply chain—real jobs, green jobs, union jobs. That is our vision, and it is one that I hope that the Scottish Government and the Scottish Parliament can share.

16:27  

As we rapidly approach the Christmas recess, at the end of what has been another record-breaking year for Scottish renewables, I am delighted that we have the opportunity to discuss and debate how we can build on that success with continued support for Scotland’s renewables. After almost a decade of investment and support under the SNP Government, it has been confirmed that Scotland now generates the equivalent of 57 per cent of its total electricity use from renewables, which significantly surpasses the interim target of 50 per cent. As was noted by my colleague Ivan McKee, that is a 14 per cent increase from 2014, and represents 26 per cent of the total UK renewable energy that was generated in 2015, with an estimated 13 million tonnes of CO₂ displaced, as was highlighted by Liam McArthur.

We already know that further progress has been made, with days in August and since on which—for the first time in Scotland—wind turbines generated more electricity than was needed. Further, in 2016, we have also seen the commencement in Orkney of the world’s largest tidal turbine trials.

Not only are renewables contributing to Scotland achieving our ambitious climate change targets—they are also making a significant economic contribution, as Jackie Baillie and Ben Macpherson noted. Recently released figures from the Office for National Statistics show that in 2014 low-carbon industries in Scotland generated £10.7 billion turnover and supported 43,500 jobs. That means that Scotland accounted for 12.9 per cent of total UK turnover and 9.7 per cent of total employment in the sector. Both those numbers are higher than Scotland’s population share, which demonstrates the importance of low-carbon industries to the Scottish economy.

I also note the positive impact of community renewables, with more than £10 million being paid in the past year to communities that host renewables, and an estimated 508MW of capacity now being operational, which exceeds the 2020 target of 500MW. In my constituency of Renfrewshire South, Neilston Community Wind Farm LLP produced in the past year enough carbon-free electricity to power twice the number of homes in Neilston.

The substantial progress and development that we have witnessed in the Scottish renewables sector has been undergirded by the Scottish Government’s steadfast commitment and support. Since 2007, Scotland’s renewable electricity output has more than doubled and is now equivalent to half the electricity that is consumed in Scotland. However, that progress is at risk of being undermined by a backward-looking UK Government.

Although many countries have begun the process of phasing out nuclear power, the UK Government has approved and given the go-ahead for the £18 billion Hinkley Point C project while rolling back support for renewables. It is worth noting that the project will be two thirds funded by EDF—which The Guardian reported last Friday has 13 of its 58 French atomic plants offline. The Guardian went on to report that, although some of the plants are offline for planned maintenance, most are offline as a result of

“safety checks ordered by the regulator over anomalies discovered in reactor parts.”

I highlight that because it was further reported that “the problems” that have been identified

“stem from a fault identified last year by the”

French Nuclear Safety Authority in a reactor that is currently in construction in France and which uses the same design that was approved for Hinkley Point C. We can only hope that the “significant new safeguards” that the UK Government mentioned in relation to the UK deal are more robust than EDF’s reactor design for Hinkley.

What is definitely not robust in the UK Government’s plans for Hinkley Point C is the thinking behind a guaranteed payment of £92.50 per megawatt, which is almost double the current wholesale price of electricity. That will mean that ordinary consumers and taxpayers will be forced to subsidise a mature and wealthy industry at the expense of promising renewables.

Approving Hinkley Point C is just one of a number of factors that the EY renewable energy country attractiveness index identified as undermining confidence in renewables across the UK. The index also highlighted as factors the closure of the Department of Energy and Climate Change and the uncertainty that has been caused by Brexit. Against that backdrop it is important that when the UK Government publishes its industrial strategy and emissions reduction plan, it includes details about long-term support for renewable energy.

More immediately, the UK Government must realise that reneging on its commitment to reserve a portion of the contracts for difference budget for marine energy projects is—to be frank—a slap in the face to that emerging industry, which has progressed more in the past year than in any other year. The UK Government should work with the Scottish Government and the sector to provide bespoke agreements so that we can safeguard our global lead in that dynamic and creative sector.

Whitehall has been fond of saying that Scotland has two Governments, but it is clear from the approach of the Department for Business, Energy and Industrial Strategy that Scotland has too often been an afterthought. As the minister noted in his opening remarks, the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark, has stated that

“There are few nations that could claim to have embraced renewable energy with as much enthusiasm and success as Scotland”,

so it is now time for the UK Government to start matching that enthusiasm and to support the Scottish Government’s ambition for Scottish renewables.

16:33  

I thank all the members who have contributed to the debate. I am particularly pleased to speak in my first debate on renewable energy, given that I started my working life undertaking research on renewable energy for the energy technology support unit in the 1980s, when renewable energy was in its infancy. It was regarded as an emerging technology that had security implications, so the programme was administrated from the UK Atomic Energy Authority’s base at Harwell near Didcot, which made for some interesting meetings.

We have heard much today about the need for greater financial and political support for renewables projects, so I am glad that there is some consensus in Parliament on the need for Scotland to continue its drive towards a clean energy future. That consensus is reflected among the Scottish public, 70 per cent of whom said in response to a survey earlier this year that they would like more renewable energy generation in Scotland.

I commend Richard Leonard for his infectious enthusiasm, and I commend many members in the chamber for their dedication in speaking up for their constituents in North East Scotland.

Scotland has some of the best renewable energy potential in Europe—we have heard examples today. The Green amendment highlights the need to develop the sector in the interests of Scotland. People like renewables, but to sustain the benefits, they need to be shared more widely.

In a debate in 2012, Patrick Harvie pushed the Government into supporting local authorities that, for example, want to create publicly owned renewables. We argued that publicly owned renewables could help to lower carbon emissions and generate revenue for public services. Other European cities, including Berlin and Munich, generate millions of euros in income from their energy service companies.

Local authorities in Scotland are in many ways ahead of the Government on publicly owned renewables. In my region, the City of Edinburgh Council appointed directors to an arm’s-length company in September. Green councillors are impatient to see the project, which they first proposed in 2010, happen. Glasgow City Council is making similar moves and Aberdeen Heat and Power Company Ltd has been operating for over a decade. Some heroic efforts made that company a reality.

I well recall Patrick Harvie making those points and I have a great deal of sympathy for local engagement and public ownership. I am concerned about the proposition of a Government-owned renewables company. Will Andy Wightman allay those concerns and explain precisely what he envisages?

I do not know what Liam McArthur’s concerns are. Gillian Martin mentioned a company that she visited in the north-east—Vattenfall. It is wholly owned by the Swedish Government, so the idea that the state cannot provide a complementary role in generation of electricity is strange. I would be happy to talk to Liam McArthur about it.

There are other models, of course. For example, Our Power Energy Supply Ltd is a non-profit energy company that was set up by a group of social housing providers last year. Its residents are provided with lower-cost energy and the profits are reinvested in the local communities rather than dividends being paid to shareholders.

Mark Ruskell spoke to the first half of the Green amendment, which is about industry and civic society calls for a 50 per cent renewables target across all our energy use. I was intrigued by Gillian Martin’s support for Mark Ruskell’s intervention suggesting the setting of clear targets for heat and transport. However, the fact was that she was sceptical about such targets when it came to the Green amendment. Perhaps her reluctance is due to her enthusiasm—which is shared by many in Parliament—for extracting every drop of hydrocarbon from the North Sea when, in order to keep global temperature increases below 2°C, we need to keep two thirds of existing reserves in the ground.

Maybe my point was misconstrued. In effect, I was saying that before setting targets it is important to research what targets might mean for consumers and companies. In addition, the UK Government’s failure to support renewables will make reaching targets even harder.

I will give you another minute because you have taken two interventions.

Research is all very well, but we need clear targets. Other countries are setting them: we heard from Lewis Macdonald about targets being set in Japan. Targets are vital to making absolutely clear the commitment of Government and local authorities to move to a low-carbon future.

The Green amendment refers specifically to the role of community-owned energy. We have heard a lot about community benefits, which are one thing, but community ownership, with the power, autonomy and revenue that comes with it, introduces far greater benefit to communities.

The Green amendment supports a Government-owned energy company and the creation of a Scottish renewable energy bond. Both those calls were made in the Scottish Greens’ election manifesto, so I welcome their inclusion in the programme for government. We have been promised consultations on both in 2017, so I hope that the minister can confirm that consultations will go ahead on that timescale.

Scottish Renewables and Snell Bridge Ltd consultants have published a paper outlining just how we could go about creating a Scottish renewable energy bond. If we were to transfer current community renewables assets that are held in the Government’s renewable energy investment fund into a Scottish community energy fund, the public could invest directly in the new fund in order to facilitate new projects. Thanks to cuts from the UK Government, communities can no longer rely on the certainty of feed-in tariffs or the renewables obligation to sustain energy projects. A bond would provide people in Scotland with the ability to invest directly in energy projects with relatively low risk. I have invested in community shares—for example in BroomPower in Maree Todd’s constituency and in Apple Juice at Applecross in Wester Ross. Risks would be managed through checks such as an independent board and a clear investment policy in which funds are spread across multiple projects.

The renewable energy revolution must provide and deliver much more for communities and local authorities, and that must involve new ways of governing public land—in particular, the national forest estate. The Greens will be bringing forward proposals to democratise the management of the land that is currently managed by Forestry Commission Scotland and will use the opportunity of a new forestry bill to increase local democracy and community benefit from that public estate.

I commend to Parliament the amendment in the name of Mark Ruskell.

16:40  

As we have heard throughout this afternoon’s debate, Scotland must maximise the opportunity for jobs in renewables. The Paris climate change agreement has finally been ratified by the UK Tory Government, and Mark Carney, governor of the Bank of England and chair of the G20’s financial stability board, has set out a vision for green global growth. He stated that investment can avert economic climate change catastrophe and described the

“historic chance to mainstream climate finance and turn risk into opportunity.”

Further, a G20 industry task force chaired by Michael Bloomberg is due to deliver a set of recommendations on how companies should voluntarily disclose climate-related financial risks.

In that context, it is disappointing that the Tory Government at Westminster cannot grasp the importance of the need for certainty for investment. We have heard—the Tories aside—from many members around the chamber on that issue. Many members have also referred to the early and sudden cut to solar power support and to the onshore wind issue.

Scottish Labour hopes that the Scottish Tory party can use its influence to encourage the appropriate development of contracts for difference for island communities. Maree Todd and others stressed their concerns for Orkney and other island communities as that issue is replicated across the islands, which have particular demands.

On pumped-storage options, the minister highlighted a recent report that is welcome, especially in relation to removal of barriers, because there are great opportunities in such developments if they are done properly, in environmental terms.

My question today is this: how inclusive will the opportunity be for workers now and in the future, and how inclusive will it be for communities? The Scottish Labour amendment squarely addresses the jobs issue, so I hope that the Scottish Government will consider setting a jobs target for renewables because that will send a clear message to the markets.

In yesterday’s Roscoe lecture in Liverpool, Mark Carney made an observation about supporting

“inclusive growth where everyone has a stake in globalisation”,

although that is perhaps something of a challenge. He continued:

“Because technology and trade are constantly evolving and can lead to rapid shifts in production, the commitment to reskilling all workers must be continual ... Lifelong learning, ever-greening skills and cooperative training will become more important than ever.”

The need for a skills strategy in terms of both initial and transferable skills for the new energy sector, from the early years right through life, is an imperative on which the Scottish Government must act. As Lewis Macdonald highlighted, short and affordable conversion courses, rather than barriers to people transferring, should be the standard.

This morning, I returned from Brussels where I attended the “Just Transition” conference that was organised by the Rosa Luxemburg Foundation and Transform! Europe. It brought together representatives of all levels from trade unions and non-governmental organisations from across Europe. As Richard Leonard said, renewable energy is a national asset. A vision is needed and an industrial strategy must follow that vision.

For larger developments, we must ensure that there are well-paid union jobs—as there have been in the oil industry—with good conditions and employee participation in decision making, which I would say has not always existed in the North Sea industries. For smaller scale and more dispersed operations in the supply chain and in manufacturing—for example, in my region, where Sunamp manufactures heat storage batteries—there should also be union possibilities. Transport unions are testimony to the possibilities of the relevance of unions to a dispersed workforce.

What of ownership itself? We heard about opportunities for local authorities with regard to district heating, which could improve the poor record on emissions from that sector while providing local high-skilled jobs. Co-operative models are, of course, owned by their members. Edinburgh Community Solar Co-operative, for example, has solar panels on primary schools and is raising awareness, providing clean energy and producing profits for distribution as a public good to those who live in fuel poverty—all as a benefit from an energy efficiency programme. Communities can also become owners and are increasingly being helped in that regard, as Mark Ruskell stressed, by the Land Reform (Scotland) Act 2016.

I will introduce a bill to ban fracking because I am clear that we must not lock into a new fossil fuel. We need clean-energy jobs and must avoid the impacts on our communities that onshore fracking would have. It is also clear that developing a fracking industry would probably divert investment from the cleaner, greener future of renewables.

That leads me to innovation. Last week’s green energy awards highlighted the great contribution that has already been made in Scotland by the renewables industry. Scottish Renewables has called for a sustainable energy innovation centre. I take the minister’s point, from a previous debate on renewables, that there are already many good centres in Scotland, but it is important to have the synergies from a strong and robust hub where transport, storage and renewables can share their experiences, and innovations can lead to commercialisation.

Gillian Martin stressed our engineering experience and history, and looked forward to the future, and my colleague Lewis Macdonald reminded us that Aberdeen is already the energy capital of Europe.

That is where you must stop.

Okay.

Thank you. I call Maurice Golden to close for the Conservatives—six minutes, please.

16:46  

It is important to recognise the contribution of renewables technologies to the fight against global climate change. There are tough targets at every level—Scottish, British and international—to reduce carbon emissions, combat climate change and increase the amount of renewable energy that is generated.

Reflecting on the debate, I think that reserved matters should be the focus of debate at Westminster rather than Holyrood. However, I also recognise that, in areas that are within the Scottish Parliament’s competence, there is consensus about the path forward.

Ben Macpherson recognised the strength of the renewables industry in a passionate and thoughtful speech. Tom Arthur was full of figures and he, too, recognised the importance of the renewables sector. Gillian Martin gave us a history lesson, speaking about a UK Prime Minister who was elected before I was born. That was followed by Ivan McKee, who talked about measures to tackle climate change as merely mechanisms of self-interest: keeping the planet habitable for Homo sapiens. I must disagree with him on that point, because ensuring that we protect against the ravages of climate change is critically important not only for Homo sapiens but for biodiversity—for land and marine flora and fauna.

Scotland is of course blessed by not only her geography and natural resources, which Lewis Macdonald highlighted, but our access to a larger UK energy market. Those all ensure that renewables technologies will continue to thrive in Scotland. They have been heavily supported by the British Government, which has fuelled a renewables revolution in Scotland. In 2014, 38 per cent of the electricity generated in Scotland was produced by renewable energy—the highest proportion in the union—and Scotland accounted for almost a third of the renewable electricity that was generated across the whole UK. Further, in terms of UK-wide capacity, we have 60 per cent of the onshore wind capacity, 85 per cent of the offshore wind and tidal capacity, and 85 per cent of the hydro capacity. Paul Wheelhouse recognised the potential in that regard.

It is important to note that the costs of subsidising renewables technologies through the renewable obligation certificate, feed-in tariffs and contracts for difference have been met, ultimately, by British consumers through their electricity bills. It is right that Scotland, because of its geography and natural resources, has received a disproportionate level of investment for its size of population. Our renewables industry has grown and benefits have been felt across this nation. Much of that is down to Scotland’s place at the heart of the union.

Jackie Baillie eloquently made the point that Scotland is missing out on jobs, particularly manufacturing jobs. She indulged in jocularity around bringing back David Cameron—she just stopped short of saying that—as well as recognising that there is lots of wind in Scotland, particularly in the chamber. I noticed that she did not look over at these benches when she said that.

Yes I did.

Ultimately, we should applaud job creation; 21,000 new jobs are not to be sniffed at, although I fully accept that more could be done. We should also applaud the investment that has been made, but recognise that the majority of the benefits have been received by large companies. Those companies—not the consumer—have been the real winners in relation to wind farm subsidies. Some companies have received supernormal profits from wind farms. Large companies, as well as landowners, gained the profits at the expense of energy bill payers, including those who suffer from fuel poverty not only in my constituency, but across the UK. Liam McArthur and Donald Cameron added that the benefit of public subsidies must be spread across communities, and I share that view.

The Scottish Government recognises that subsidises have been changing. When scrapping the renewable energy generation relief scheme, it said that

“the sector has reached financial maturity”.

One of the biggest challenges that we face relates to the amount of energy that is generated, resulting in constraint payments being paid throughout the UK. That burden is being carried by UK consumers—on a single day in August, energy companies were paid £5.5 million, and in the first three months of this year, they were paid £70 million.

Will the member give way?

The member is in his last minute.

Part of the solution is a smart power revolution. One such opportunity would be to develop an electric arc furnace—which is far more flexible and environmentally friendly than a blast furnace—for steel recycling. The furnace could harness excess energy and could use the 5.5 million tonnes of steel from the 571 platforms in the North Sea.

As Alexander Burnett said, we are calling on the Scottish Government to establish a sustainable energy innovation centre. We also want to champion the decarbonisation of the heat and transport sectors, a point made by Liam Kerr. In addition, we want to—

No, there cannot be any “In addition”. I am afraid that you have run out of time. Please sit down. Thank you very much.

16:52  

I have had a hint that my time will be cut off, too, so I will be careful with the clock, Presiding Officer.

I have been glad that there have been so many valuable contributions to this important debate from members across the chamber. Andy Wightman is right: there is consensus across the chamber in some areas. We need to work together to find out how we can share the agenda and find the areas of common ground.

I welcome Liam McArthur’s implied support for the Government’s position and, indeed, his opposition to the Conservative amendment. We intend to support Labour’s amendment. We have reservations about it, which I will touch on, but it is important to show consensus where we can. I will also deal briefly with Mark Ruskell’s amendment, which I have a lot of sympathy with, but I will explain in detail why we are not able to support it, although I hope that I will offer him hope for the future.

Scotland’s renewable energy industry is a UK success story. What was once a niche industry is now mainstream. Electricity capacity has grown significantly over the past few years, with average annual capacity increasing by more than 635MW since the end of 2007. The sector enjoys unprecedented public support, evidenced by increasing community ownership of projects. Indeed, Mr Wightman referred to recent polling evidence, which shows strong support for renewables.

When it comes to the Green Party’s amendment in the name of Mark Ruskell, I want to set out a little bit of the background on why we cannot support it, although we share a lot of the ambition that it shows.

Our ambition for renewables remains high. Our draft energy strategy will be published for consultation in January next year, and we will reconfirm our commitment to renewables as a vital component in Scotland’s progress towards a low-carbon energy system. We want to make the most cost-effective transition towards our climate change goals, and it is clear that in doing that we will need a range of technologies and measures—some will be renewable, some will be low carbon and some will focus on energy efficiency.

I acknowledge that a number of members asked for a whole-system approach and for a fully integrated approach to heat, transport and electricity. I think that Labour and the Greens probably support that ambition—indeed, Mr McArthur made a similar point. We are determined to try to deliver in that regard, and in light of that challenge we want to hear from our stakeholders and the Scottish public about the best approach for Scotland.

For that reason, I do not want to be drawn into setting targets today. As Gillian Martin very capably said, we need to do the research that will underpin targets. We must do the due diligence on the figures and come out with proposals and targets that are deliverable. Credibility is key if industry is to invest, as I know that members want it to do. We are looking closely at the work of WWF, Friends of the Earth and the RSPB, whose aspirations Mr Ruskell shares.

We will take that work forward in our draft energy strategy, which as I said will be published in January for consultation. I invite members to consider our proposals in due course. I hope that we will be able to pick up the issues that Mr Wightman raised about a Government-owned energy company. I am looking to take forward our manifesto commitment in that regard. Renewable energy bonds are also an interesting idea.

On the subsidy that Scotland has received for renewable energy, I think that Maurice Golden made a reasonable stab at explaining the situation. Scotland has worked hard to provide a clear policy context and to foster investor confidence, and that is why so many projects came forward under the RO. The CFD process is a competitive one, and, as Mr Greg Clark, the Secretary of State for Business, Energy and Industrial Strategy, said,

“in the last CfD auction 40% of awarded contracts”

were located in Scotland, but that is because Scotland has some of the UK’s best renewable resources. We need to remember that. The location of projects is due not to some geographical benevolence on the part of the UK Government but to the need for resources to go where the best projects can happen—Scotland has excellent sites for development.

Alexander Burnett did not comment on the reneging on promises and commitments made by Andrea Leadsom and previous ministers about remote island wind.

Jackie Baillie covered a number of issues in her comprehensive speech, and I will respond to one or two of them. On MeyGen, she was absolutely right to highlight that Andritz Hydro is manufacturing the turbines for the project’s initial phase. That is why we want there to be further phases, because only then are we likely to secure the manufacturing facilities and contracts in Scotland. I am optimistic that we can do that, if the UK Government can provide the long-term commitment that the technology needs if it is to develop in the UK.

Jackie Baillie was right to say, in relation to the East Anglia project, that the company is based in the Gulf. However, I understand that the contracts are going to Belfast, so there are UK contracts in that regard.

As Jackie Baillie said, there have been significant job losses in the oil and gas industry, which we all regret. We are working closely with the industry to ensure that it makes the transition to renewables and other sectors as good as it can be. I agree with Jackie Baillie’s comment about the lack of minima for the industry.

Mark Ruskell gave the good example of the Stirling solar farm that was cancelled as a result of the loss of certainty about funding. He was right to say that onshore wind is the lowest-cost technology. We will consider wind farm repowering, replanting and extension projects in the energy strategy, in our onshore wind statement.

Liam McArthur made an excellent speech and talked—as did Maree Todd—about the importance to the Orkney economy of tidal and wave power. He was right to say that consensus reduces risk. That is why today’s debate is so important: if we can show consensus, we will give the industry a signal. He was right about the CO₂ emissions that have been offset by the industry. We are very much aware of that.

Under the coalition arrangements in the previous UK Administration, the Scottish Government had a good working relationship with Ed Davey, which I offer as an example of how the Scottish Government can work with UK ministers if there is an appetite for such work in both directions.

Liam McArthur was right to say that capped support would not be drawn down at an accelerated rate. We think that the UK Government has been overly pessimistic in that regard and that there would be a relatively slow draw-down of CFD funding.

Other members made excellent speeches, too. I commend Donald Cameron for his support for the hydro industry. Ivan McKee talked about the impact of climate change.

I see that my time is coming to an end, Presiding Officer. Today’s debate is welcome, in that there has been a great consensus in many areas. This Parliament can make a strong call to the UK Government to do more to support Scotland’s renewables industry, and I hope that members will support that call at decision time.

We have great examples of innovation in practice in this country, and I believe that, as a Parliament, we are showing a clear desire to see that continue and to support further jobs in our economy.