At the end of June, Energy Minister, Fergus Ewing launched an action plan to drive forward Scotland's renewables sector in the form of a Renewables Routemap.  The Renewables Routemap outlines the steps which are required to take advantage of the economic potential of Scotland's rich green energy resource in order to meet the Scottish Government's world leading green energy targets.  These include supplying 100% of electricity demand equivalent from renewables by 2020.  The Renewables Routemap is based on an understanding of the country's capacity to produce a sustainable energy source.  The goals are set to a high level, but there appears to be a confidence that the country will achieve this.

Energy Minister, Fergus Ewing said: "Scotland has established a global reputation for excellence in innovation in renewables and this Routemap acts as a blueprint to capitalise on the economic and social potential of our nations rich natural resources.

Our target of generating 100% of Scotland's electricity needs from renewables by 2020, is one of the most ambitious in the world.  The Renewables Routemap also outlines new goals of achieving 30% of overall energy demand from renewables by 2020, and 500 Megawatts (MW) community and locally-owned renewable energy by 2020 – reflecting our commitment to creating a low carbon Scotland."

Notwithstanding this confidence, there are challenges ahead.  We look at some of the challenges for Scotland in achieving these ambitious renewable energy targets.

Financial support

Billions of pounds of investment are needed in order for Scotland to meet its targets and yet we are in a period of constrained credit markets.  Long-term confidence is going to be required if investors are going to be attracted into the renewable industry and there must be adequate availability of finance.  The Scottish Government has recognised this and has taken the lead in establishing the Scottish Low Carbon Investment Project which is a public-private partnership with the purposes of identifying investment proposals, looking at different models of investment and looking at opportunities with the international investment community.

The UK Government has also recognised that government finance is needed to kick start the UK’s low carbon economy and have proposed to set up a Green Investment Bank which will fund investment projects.  Private sector banks are unwilling to take risks on large renewable projects and new technologies.  The UK Government has requested that the Scottish Ministers waive their right to the £200 million accumulated under the Scottish Fossil Fuel Levy (SFFL) which is funding that, under statute, cannot be spent on anything other than the promotion of renewable energy in Scotland, in exchange for an investment in Scotland of £250 million by the Green Investment Bank.  However, there is a conflict as to timing in that in Scotland there is a desire for an early investment of the SFFL to create additional spending and investment in the renewable sector now.

Other challenges affecting the attainment of our renewable energy targets include advancement in offshore wind, wave and tidal technology, to a level that is commercially viable. This will need to be supported through public sector grants for investment in innovation, research and development aimed at reducing capital and operating costs.

Planning

There are currently about 3.5 Gigawatts (GW) of renewable energy projects awaiting planning determination in Scotland.  If you factor in around 10 GW of offshore wind developments and 1.6 GW of wave and tidal projects which are in the early stages of scoping, then its clear to see that the planning system will have a huge part to play to determine whether Scotland can meet its renewable energy targets.

The Scottish Planning Policy (SPP) encourages local planning authorities (LPAs) to support development of renewable energy technologies in appropriate locations and to provide guidance on certain issues which will be taken into account when planning applications are assessed.  The approach of the SPP has undoubtedly assisted many projects to gain consent.

It is critical that LPAs understand both the national priorities for renewable energy and also the local benefits of such projects.  In some LPAs, responses to scoping are not comprehensive.  This leads to issues being raised post-submission with added cost and delays occurring as a result.  Statutory agencies also have a right to be consulted in the planning process, which can add to lengthy delays.

If we are to progress even a proportion of the proposed 10 GW of offshore wind developments and 1.6 GW of wave and tidal projects by 2020, effective national guidance reflecting national policy priorities will be required together with a more inclusive, streamlined and faster decision-making process.  There will need to be more engagement with developers at the pre-planning application stage through comprehensive scoping with more community involvement.  Planning applications will then need to be dealt with swiftly through the planning system and have a greater chance of obtaining planning consent with minimum delay.

Grid

The Grid in Scotland (like the rest of the UK) was built for a different age and developed with large fossil fuel power stations in mind and close to centres of demand.  Getting connected to the UK transmission network (the Grid) is a problem faced by every type of electricity generator and the renewable energy sector faces some issues specific to its technology.  The best sources of renewable energy are dependent on elemental forces which are found well away from the current Grid network.

The Grid’s infrastructure was built to transmit a maximum of 75 GW of electricity, but by 2020 it will need to cope with as much as 120 GW.  Obtaining a grid connection is another particular problem for the renewables industry.  This can delay the construction and operation of wind farms by several years.

The Beauly-Denny power line upgrade was approved in January 2010.  This is an example of the investment which the Scottish Transmission System Owners (Scottish and Southern Energy plc and ScottishPower) has made to date in order to allow the vast renewables potential to be harnessed, transmitted and exported.

The then Energy Ministe,r Jim Mather told Parliament: “Developing our onshore and offshore grid connections is crucial to connecting, transporting and exporting Scotland’s renewable energy to the UK and Europe. The Beauly-Denny upgrade will help meet that aim.  There are over 50 potential projects totalling around 4.2 GW in the north of Scotland, two thirds of peak Scottish demand.  That energy will further secure our supply while allowing us to continue to export the surplus.”

This is a step in the right direction but it is critical that much greater progress is made if Scotland is to meet its renewable energy targets.  New connections are required for offshore wind and wave projects and also to resource parts of the country such as Shetland and the Western Isles which have a huge potential for renewable energy but are not connected to the Grid on the mainland.  There are plans for a Western Isles sub sea cable to the mainland, however the project has been delayed due to the Scottish Transmission System Owners insisting that the cost of the project is to be met by developers of renewable energy schemes on the islands.  The level of investment in the Grid will require to be heavy and sustained from a range of parties including the Scottish Transmission System Owners, the Scottish and UK Governments and The Office of the Gas and Electricity Markets (Ofgem).  This would allow this work to be completed in time for 2020 to ensure that many renewable energy projects are not delayed by a lack of available grid connections.

There is also the issue of transmission charging the charge levied on generators for using the Grid. National Grid, the company appointed by Ofgem to manage the Grid, implements a charging regime that levies higher charges for use of the Grid on generators furthest from the main centre of demands to encourage generation closest to where it is needed the most.  As a result of the strong locational pricing element in the charging methodology, generators in the North of Scotland are facing the highest charges in the UK, up to four times higher than those charged by generators in Cornwall.  Scotland is "one of the most renewable energy rich parts of Europe", however, facing the highest transmission charges in the UK acts as a disincentive to investment in renewable energy generation in Scotland. What is needed is reform of the outdated transmission charging network in order to encourage investment in renewable energy in Scotland.

Public support

In addition to Government support for renewable energy, public support is key to Scotland being able to meeting its renewable energy targets.  For developers it means involving communities at the early stages in the design of proposed projects, to gather support and improve the chances of obtaining planning consent.  One of the targets set by the Scottish Government is for there to be 500 MW of community and locally-owned renewable energy projects by 2020.  This is very challenging given that, to date, most community owned energy projects are very small scale. The Feed-in Tariff scheme was introduced in April 2010.  This has seen an increase in interest from communities wishing to develop their own renewable energy projects as people see the opportunity to make money as well as making a commitment to helping the environment.   There are, however, a number of issues which will need to be addressed in the future.  Communities must be able to obtain a long term sustainable funding mechanism for projects and there needs to be clear advice for planning authorities in respect of community renewables and community benefit.  Planning authorities also require to address potential issues arising as a result of an increase in the volume of community scale projects which are submitted into the planning system.  The communities themselves will also need support from the Scottish Government, in order to engage in renewables and develop individual projects.

Conclusion

In order for Scotland to achieve its renewable energy targets there will need to be significant access to finance to support renewable projects.  We will also need a more streamlined planning system, investment in the Grid infrastructure together with public and Government support for such projects. Renewable energy in Scotland is already a part of our energy make-up and the Renewables Routemap clearly stipulates that the ambitions and plans for the sector are to be considered alongside the Electricity Generation Policy Statement which addresses the issues in the context of the wider focus of electricity production.

Renewables are becoming a significant part of our economy and the next few years will be key in determining progress to 2020.  The Renewables Routemap clearly captures success to date and plots out the path to attain the country's goal.

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