Overview 

The Scottish Government has published, for consultation, their route map to secure Scotland’s ‘fastest possible’ but  ust transition away from fossil fuels. The draft ‘Energy Strategy and Just Transition Plan’ (the “Draft Strategy”) sets out the vision for Scotland’s energy sector, to ensure delivery of an energy system that meets the challenge of becoming a net zero nation by 2045. The Draft Strategy sets out the Scottish Government’s aims for policies on domestic production of energy and includes a ‘Just Transition Plan’ that details the support being provided to grow Scotland’s highly skilled energy workforce and increase jobs in energy generation and the supply chain.

The Draft Strategy’s aims will guide decision-making and policy support over the course of this decade and provide policy certainty for stakeholders to set a clear direction for the future of Scotland’s energy sector.

Key Ambitions for Scotland’s Energy Future 

There are three overarching objectives of the Draft Strategy:

• to scale up renewable energy production, helping to secure a just transition away from fossil fuels and achieve a reduction in overall energy demand;
• to secure continued and increased investment in the Net Zero energy economy, which will in turn ensure more jobs, new manufacturing capabilities and grow supply chains, and improve export opportunities; and
• the delivery of a fairer, more secure energy system that is no longer reliant on volatile international commodity markets and delivers lower costs for consumers.

To achieve these aims, the Draft Strategy’s roadmap includes proposals such as:

• More than 20 GW of additional renewable electricity from on-and-offshore sources by 2030;
• Hydrogen production to provide 5 GW of capacity by 2030, increasing to 25 GW capacity by 2045;
• Accelerated decarbonisation of domestic industry, transport and heat and the establishment of a national public energy agency – Heat and Energy Efficiency Scotland;
• The phasing out the need for new petrol and diesel cars and vans by 2032 and reduction in car kilometres by 2030;
• Generation of surplus electricity, enabling export of electricity and renewable hydrogen to support decarbonisation across Europe;
• Energy security through development of Scotland’s own resources and additional energy storage;
• Increased contributions from solar, hydro and marine energy to the energy mix.

Scaling Renewables 

Scotland’s vast renewable energy resources (including its offshore wind potential, tidal energy resources and a well-developed onshore wind sector) and established track record in renewable technologies are no secret. The Draft Strategy sets out a plan to continue to build a diverse renewable energy mix, with substantial offshore and onshore wind deployment supported by other technologies such as hydro, hydrogen and solar.

This will be beneficial as more home-grown renewables will increase supply, bringing down energy prices making energy more affordable and secure - a key concern given today’s current uncertainty in both the global national energy markets. High energy prices are impacting people, communities and businesses across Scotland.

Wind 

Scotland’s success in completing the world’s largest floating offshore leasing round, ScotWind, and its commitment to onshore wind, are strong foundations to build upon. The Offshore Wind Policy Statement, published in 2020, set out Scotland’s ambition to achieve 8-11 GW of offshore wind in Scottish waters by 2030. The Draft Strategy consultation seeks views on whether the Scottish Government should set an increased ambition for offshore wind deployment, and what the level of ambition should be. The draft Strategy restates the Scottish Government’s ambition set out in its Onshore Wind Policy Statement (December 2022), for a further 12 GW of onshore wind by 2030, increasing from 8.78 GW as of June 2022 to 20 GW by 2030, to more than double Scotland’s existing capacity.

Hydro

The Draft Strategy acknowledges the potential for hydroelectric power to play a significantly greater role in the energy transition, providing flexibility, security and and resilience in the energy system. There are currently 1.5 GW of pumped hydro storage projects awaiting construction in Scotland with SSE Renewables’ Coire Glas pumped hydro storage project set to double the UK’s electricity storage capacity. Drax have also kickstarted the planning process to build an extension to the famous underground pumped hydro storage power station at Ben Cruachan– more than doubling the electricity generating capacity at Cruachan and increasing the site’s total capacity to 1GW. The draft Strategy urges the UK Government to provide appropriate market mechanisms for hydro power to ensure the full potential of this sector is realised.

Hydrogen 

The Draft Strategy highlights the intention to ensure that the Scottish economy benefits from taken a leading role in the hydrogen sector, in terms of the supply chain and infrastructure. The Draft Strategy, as well as the Hydrogen Action Plan reaffirms the Scottish Government’s policy support for hydrogen and for a hydrogen economy,

Solar

The Draft Strategy seeks to consult on future ambitions for solar power in Scotland to build on  its  current 411MW of capacity. This should include increased support for the sector to overcome barriers to increase deployment and maximise solar energy’s contribution to decarbonisation. The Scottish Government is also keen to see offerings of community benefits.

Oil and Gas 

The strategy set out a “presumption against new exploration for oil and gas” and calls for stricter environmental tests to be applied to developing already licensed fields. Some industry bodies, although welcoming a commitment to developing the hydrogen economy, are concerned at the statement’s suggestion of accelerating the decline in oil and gas production. Scotland is estimated to received almost 80% of its total energy from oil and gas according to its latest official figures.

However, the Draft Strategy reinforces the Scottish Government’s commitment plan for life after oil and gas, with the First Minister setting out her expectation that Scotland will be a leading nation in tackling the practical and moral issues that come from a reliance on fossil fuels.

A consultation on the Draft Plan will run until Tuesday, April 4.

Burges Salmon Comment 

With last year’s warning, from the Climate Change Committee, the body which advises government, that Scotland’s lead in “decarbonising over the rest of the UK has been lost”, the Scottish Government’s Draft Strategy sets out the country’s clearly ambitious and potentially transformative targets in order to achieve Scotland’s Net Zero goals.  The consultation will be key in order to understand the barriers that still stand in the way of a low-carbon energy system and its development. Strong and increased stakeholder engagement, development and funding is required to ensure the ambition is reached.

Burges Salmon is proud to be at the heart of renewables and energy transition developments and opportunities in Scotland. Our teams in Edinburgh, Bristol and London are currently advising a number of clients and various stakeholders on the financial, construction, planning and consenting, policy and regulatory aspects of renewable projects that have helped and will help shape the path to meeting Scotland’s strategy.  Our works spans a large number of technologies including onshore wind, offshore wind, floating wind, solar, hydrogen, hydro, and energy storage.

Drafted by Lloyd James, Mark Summers and Amy McPherson