The Glasgow Climate Pact agreed at COP26 may have fallen short of the binding carbon reduction commitments many had hoped for. However, significant progress was made to reduce the use of coal, provide funding to help poorer nations achieve their carbon reduction targets and revisit plans to cut carbon emissions next year with the objective of limiting the rise in global temperature to 1.5°C.
I do hope history will validate UK Prime Minister Boris Johnson’s assertion that the world will “look back on COP26 in Glasgow as the beginning of the end of climate change”, but there is still much to be done, both by public and private sectors.
From a UK perspective, we have already achieved a great deal. Total onshore wind deployment stands at 14.1 gigawatts (GW), with 8.4GW of that in Scotland, and a pipeline of more than10GW of onshore wind is now in the planning system. In addition, Scotland is deploying offshore wind at scale and aims to increase offshore wind capacity in Scottish waters from 1GW to 11 GW by 2030.
Clean energy has benefitted from government support incentives under the Contracts for Difference (CfD) scheme, a surge in corporate demand for clean energy, and policy signals that demonstrate long-term opportunities to bid for the ScotWind offshore wind-leasing round and others to follow throughout this decade across the UK.
The scale of opportunity for Scotland’s net zero ambitions
We are now involved in a race to see how quickly we can scale up our deployment of both offshore and onshore wind if we are to meet the demands of a net zero economy. However, it is certainly not all about wind. The sheer range of work and opportunity to deliver change across society in order to green our economy is staggering, stretching from forestry and sustainable housing to biomass fuels and the roll-out of electric vehicle charging infrastructure, to name a few. In Scotland, there are particularly attractive opportunities in relation to hydrogen, heat, and carbon capture, utilisation and storage (CCUS).
It is encouraging to think that the younger generation will live in a world where petrol pumps have been replaced by electric vehicle charging points and our energy-efficient homes are powered by renewable energy. Success in achieving our net zero ambitions will also depend on a combination of consumer-driven demand, the younger generation’s drive to tackle the climate emergency, and financial markets focusing on funding businesses and projects that can demonstrate their net zero credentials.
Living up to the promise of COP26 will require hard work. Scotland has tremendous natural resources, along with experienced developers who know how to best utilise them to green the economy. However, we must better support industry in delivering the changes and projects our world needs, while ensuring that infrastructure is deployed in an environmentally sensitive way. The clock is ticking.
So, what key steps must we take to ensure Scotland’s continued attractiveness for deploying renewable energy infrastructure?
Synchronising energy regulation, supply and demand
We have one of Europe’s most fragmented regulatory frameworks for giving the green light to energy projects. To build offshore wind turbines, for example, developers need to:
- bid to the Crown Estate to win seabed rights;
- apply for, and secure, planning and related environmental consents;
- secure a grid connection offer that will deliver a timely connection to the right location for their project; and
- ensure they can sell the power for a strong return on investment, which often means competing in an auction to win a government-backed CfD.
Each of these processes is owned by a different decision-maker with its own legal framework, and a developer can fail at any stage despite significant investment in a project over many years. This makes it hard for the supply chain to be ready to deliver because it is difficult to know which projects will succeed, where they will be located and when they will be operational.
It is certainly encouraging to see the UK Government’s Offshore Transmission Network Review is proposing strategic change, particularly in identifying at an early stage where seabed rights will be available in future, the GW scale of the opportunity and aligning the timeline for both seabed and consenting rights.
Empowering and reforming local planning authorities
Energy policy is not devolved but the Scottish Government plays a key role in consenting large energy projects, Marine Scotland grants the environmental consents required and local authorities grant planning consents for certain onshore wind and other energy projects.
To hit our targets and deliver net zero, we need institutions that are properly resourced and empowered to:
- support a major increase in the deployment of more clean energy generation this decade than at any time before;
- accelerate the delivery of robust, properly tested decisions that have a low risk of challenge; and
- be forward looking and implement process change, while becoming more joined up with other aspects of the development process.
Our local planning authorities also need the resources to understand and deal with increasing deployment of localised energy infrastructure across a range of new technologies.
Organisations such as NatureScot, Historic Environment Scotland and SEPA play a key role in testing the consents applied for and it is important that these and other stakeholders are also well resourced to deliver timely and early engagement with developers. This will mean that by the time consents are formally applied for, they have already been tested thoroughly in an open and transparent way.
Another enabling step would be the procurement and publication of a regularly updated seabed and marine mammal survey to assess the impact of offshore wind turbines on birds and mammals in waters off Scotland. If this could be done through centralised funding and resources, it would reduce the timeline for projects by at least a year.
Planning never stands still and, in the last fortnight, the Scottish Government has published for consultation two national policy documents that will shape the landscape of Scotland over the next decade - the Onshore Policy Wind Statement and Draft National Planning Framework 4. We are working with a number of clients on responses to these documents, focusing on the hard work of getting the right words on the page that will mean our decision-makers will have the right policy guidance to support the rollout of clean energy infrastructure.
Creating jobs where they are needed most
Some of our windiest places onshore are also our most rural areas in need of investment and jobs, and offshore wind often requires resources and skilled labour in locations that are in decline or in need of investment. This highlights the positive influence a successful transition from oil and gas into offshore wind can have for Scotland.
We have already seen positive action in this regard with projects such as EDF’s Neart na Gaoithe windfarm development signing a 25-year lease with Eyemouth harbour that secures its future as an operations and maintenance base for the project, and two Scottish firms winning the work to build the infrastructure needed there. The ScotWind leasing round will undoubtedly lead to investment in local ports and harbours around our coasts, giving communities the industrial scale opportunities they have lacked for decades. Looking forward, we can also see ScotWind encouraging community benefits and engagement on a scale that is considerably more ambitious. There has been talk about community ownership models to support communities with a high incidence of fuel poverty.
We must also strive to ensure clean energy industries of the future deliver new, high quality, high value jobs. My fear is not that we fail to create enough high quality local jobs but that we will not be able to fill them and therefore do not deliver progress at the pace we need. The University of Strathclyde and energy company Eni’s Corporate University have recently shown the way by signing a memorandum of understanding to develop a programme to help professionals working in the oil and gas sector in Scotland transfer their skills to renewable energy technologies.
I would like the next generation to see COP26 as a tipping point that leads to a greater sense of urgency in addressing the climate emergency. I sincerely hope that by 2030 Scotland has faster and simpler decision-making processes for energy infrastructure, and that the clean energy sector has responded by delivering the infrastructure we need to achieve net zero and galvanise investment in Scottish companies, locations and people.
Liz McRobb is a Partner in Shepherd and Wedderburn’s Clean Energy Group and a specialist on large regulatory or commercial projects in the energy and water sectors.