Sustainable solutions: energy minister Paul Wheelhouse talks renewables

Written by Jenni Davidson on 25 April 2018 in Inside Politics

Despite the end of subsidies for certain renewables, energy minister Paul Wheelhouse is confident the future is bright

Business, innovation and energy minister Paul Wheelhouse - Image credit: David Anderson/Holyrood

It’s a rare day when solar power seems like a realistic possibility in Scotland, but the sun is shining in Eyemouth when Holyrood visits the energy minister, Paul Wheelhouse, in his local community.

And indeed, the sun seems to have been shining on renewables recently, with a series of good-news stories about record-breaking levels of electricity generation, including the announcement of a 44 per cent increase in onshore wind in the first three months of this year and a 45 per cent overall increase in power from renewables in 2017 compared with the previous year.

“There’s a lot going on and we certainly consider that the great increase in capacity that we saw in 2017 isn’t the end of the story, it’s still continuing, which is great news,” says Wheelhouse.

But with onshore wind and solar no longer eligible for subsidies from the UK Government, is there a risk that these gains will be reversed as schemes that are already up and running come to the end of their working lives?

“It’s a very fair point,” he answers. “I mean, I think we are open with ourselves about it.

“We’re still aiming for 100 per cent by 2020, but it’s become much more challenging because of decisions that UK ministers have taken – particularly around onshore wind.”

In terms of onshore wind, the Scottish Government is trying to push UK ministers to allow a subsidy-free price stabilisation mechanism.

“That would be probably sufficient in many cases to allow some projects to happen, but we are aware there’s about just under 11 gigawatts of renewables that are yet to be developed in Scotland that are consented and many of them may be affected by the funding changes that have taken place.”

However, Wheelhouse adds that it’s “very encouraging” to see larger, commercial-scale solar projects and explains that Scotland is, counterintuitively, actual ideal for solar.

“Despite all the jokes – the obvious jokes, I should say – Scotland has a lot of solar radiation throughout the year, so actually we’re only a few percentage points off the south-east of England because we compensate for our perhaps less hot weather by having a lot of sunlight, and for solar panels, actually excessive heat can be damaging to solar panels’ performance, so we’re in a kind of sweet spot in terms of the average air temperature,” he says.

As well as pushing the UK Government for a price guarantee, the Scottish Government is keen to support the sector with ‘repowering’ – replacing older turbines with larger, more efficient ones, that can make an existing location more viable without subsidies beyond their initial 20 or 25-year life.

Some of these much larger turbines can power the average home for a day with just one rotation.

“They don’t spin as fast. I don’t think they’re visually as intrusive as small turbines that turn very rapidly, but I appreciate I’m someone who thinks they look quite graceful.

“Not everybody does, so we have to be mindful of that.”

He says the Scottish Government is, in general, supportive of the principle of having larger, more powerful turbines because it knows that’s essential to making these projects stack up financially.

However, the energy minister underlines that these won’t be suitable at all locations and says he has urged the industry not to come with applications that are “insensitive”.

“While it’s not material to the planning application, don’t come to us and say we can’t support a community benefit in some shape or form, because that just doesn’t wash. The community has got to get something out of this too. 

“But also, we are saying that you need to choose sites well and where you know there’s controversy, don’t push very large turbines in places you know the landscape won’t sustain them.”

Wheelhouse likens the difference to a cycle race between himself and Chris Hoy in which Hoy would be more efficient, able to cycle in higher gears with more power and fewer revolutions.

“They look the same as older turbines, physically, in most people’s eyes, but they are massively different, much longer blades, much bigger swept area and the turbines themselves have had significant innovations, so they are very much more powerful than their predecessors, and also the software, the management of the windfarm sites, so they’re optimising when they’re switched on and the direction of them to catch the most wind”.

The Scottish Government published its first energy strategy in December 2017, and it sets out aims around six areas: promoting Scotland’s renewable energy potential, protecting consumers from high costs, improving the energy efficiency of homes, ensuring a resilient supply, supporting local energy generation and investing in innovation in the oil and gas sector, including decommissioning and carbon capture.

One of the focuses of the energy strategy is on local energy production and moving towards a more decentralised model of production that could help provide a more resilient energy system.

There is work going on across the country, he says, on “more sustainable, self-sustaining solutions” in areas like district heating systems, hydrogen energy storage on Orkney, battery storage on Gigha and a heat pump generating electricity from the Clyde in Glasgow.

They are also having “constructive discussions” with COSLA on councils, either as a statutory duty or voluntarily, developing a local heat and energy-efficiency strategy that would map where the heat is produced and where demand is.

Nicola Sturgeon has also committed to creating a state-owned energy company with a view to reducing fuel poverty and stimulating the economy.

A fact-finding report by EY into the setting up of such a company indicated it could have significant set-up and running costs, but Wheelhouse won’t be drawn at this stage on this, just that the Scottish Government will consider the report and consult on proposals later this year.

But while progress is clearly being made in terms of the production of green electricity, and the Scottish Government has set targets for moving over to electric vehicles by 2032, the obvious gap in the good news so far seems to be what will replace gas, with the majority of households in Scotland still using gas for heating. How is that to be tackled?

“We’ve not been technology specific [in the energy strategy],” Wheelhouse says.

“We’ve deliberately avoided doing that because before you know it, you’ve made a commitment to do something and it’s changed because the market has changed.

“While we’ve presented a very high electricity scenario and a high hydrogen scenario – and those may not be the only technologies that are available, of course – but the most likely frontrunners at the moment are to increase the amount of electrical heat and electrical supply to replace gas if that’s necessary, or ultimately hydrogen may well return – it was part of town gas prior to natural gas coming in.

“It’s trying to see if we can develop an economy in which we can develop hydrogen at a commercial scale and the right price, and obviously there are some issues that touch upon reserved powers around repurposing the gas network, so we are mindful of that, we set that out in the energy strategy itself, but the use of hydrogen may provide an alternative natural gas as we know it.

“But we’ve allowed in the energy strategy for gas to play a role not just in the transition but potentially beyond that, especially if you have carbon capture and storage, and potentially, carbon capture, storage and utilisation.

“That provides a means by which you offset the damaging aspects of using fossil fuels, but we also are open to other fuels, biogases and other alternatives, so we recognise that for many people it’s not practical at this stage to assume they’re going to switch off using gas and we’ve tried to be realistic about the timescales for that.”

Wheelhouse says there are “voices calling for a faster progression to alternatives to gas boilers” and he can understand where those individuals and organisations are coming from, but what the Scottish Government is trying to do is work through Scotland’s Energy Efficiency Programme (SEEP) to look at alternative forms of heating, including district heating schemes, renewable boilers or other alternatives for areas of social housing or blocks of flats and to identify what technologies work most effectively to help inform businesses about what could be the best technology for them to invest in.

“Initially, the real focus is on domestic properties to try and tackle fuel poverty, which is a very high priority for us, but beyond that, moving into non-domestic as well, so trying to tackle heating and cooling in business premises and making sure that’s as energy efficient, and renewable, ideally, as we can make it.

“So I think what we’ve reached with the energy strategy and the climate change plan is a more realistic timescale.

“It’s still ambitious, it will be challenging and we’ve got the goal by 2030 to have half our energy coming from renewables, which we’ve modelled and we think we can get close to that based on our current technologies.

“Obviously, with technology improving, we’d hope to reach it and go beyond it, so I think we’ve got the balance about right, but we’ll never satisfy everybody.”

Wheelhouse points out that the Scottish Government has committed over half a billion pounds to that programme between now and the end of the parliament at a time when there’s no comparable public funding south of the border for investment in heat and energy efficiency, “so we’re putting our money where our mouth is”.

The supply chain does not currently exist in Scotland for district heating, so one of the key focuses is to create that to capture more of the economic benefits locally, as well as build in more resilience.

He says: “If you’ve got a local supply chain, then you’d be better placed then to avoid some of the pitfalls we’ve had in the past where we’ve created an industry and then the UK Government has just pulled the rug from under it, on solar or from an RHI [Renewable Heat Incentive] point of view, you know, domestic heating.

“People have had their confidence knocked when they’ve gone into this industry and then had it shattered because overnight, the rules have changed without any warning.”

The Scottish Government is to invest in carbon capture and storage (CCS) after a mooted UK Government investment in Peterhead was cancelled.

But is carbon capture not just a get-out clause for not making the necessary changes away from fossil fuels?

Wheelhouse points out that the UN International Panel on Climate Change has said that CCS is a key part of what the world needs to tackle climate change.

“It doesn’t mean that we are necessarily saying that we need to guzzle every bit of fossil fuel that we have left, and I’m not saying that, but CCS is important to allow us to manage the transition to a low-carbon economy and potentially, to be able to use some fossil fuels beyond the transition without damaging the environment.

“That’s surely got to be a good thing as an outcome if you’ve got an energy resource you will use without doing damage to the environment, then that would make sense.”

He calls the UK Government’s cancelling of support for carbon capture at Peterhead “a shocking decision” that didn’t take stakeholders seriously who had invested in projects “only to find that whipped out from under them” and says the lack of confidence that breeds is unhelpful in managing transition.

Wheelhouse says the Scottish Government is now “putting in a small, relatively modest amount of money, but it is significant given the resource constraints that we continue to prioritise that and we do think we need it by the 2030s and beyond; CCS needs to be there as an option”.

“The Acorn [CCS] project is important for us because it will allow us to potentially use that amazing resource we’ve got in the central North Sea reservoirs as a new revenue stream for the oil and gas industry, diversifying away from production, perhaps over time, as we know it is likely to happen in the long term, into storing carbon and potentially even, if there’s a market develops for using that carbon dioxide, then it’s a resource that can be used for economic purposes as well.”

The technology can work, he says, it’s about bringing the cost down so that it becomes cost-effective.

“I’m confident that [CCS] is key to us having, globally, the lowest cost trajectory to tackle climate change.

“If we’re going to do it in the timescales we need to, then we probably do need to do something like this.

“Positively, Scotland has lots of opportunities to decarbonise. This is but one of them but I think it would be a missed opportunity if we didn’t do it.”

On the day of the interview, Scottish Secretary David Mundell was reported to have said the UK Government is open to a £1tn ‘sector deal’ for the oil and gas industry, which Holyrood notes, suggests they are still focusing on that as the key energy sector to invest in.

Wheelhouse says he finds that “frustrating”, but adds that historically “we’ve all been guilty of… seeing the [oil and gas] industry as a bit of a cash cow” and that it is important not to abandon it overnight.

He explains: “We’ve got to manage that transition fairly for the workers involved and the communities that have served it so well.

“I think the UK Government just sees it sometimes as a cash cow and maybe some help to them in their balance of payments, which without the contribution of oil and gas to the balance of payments, the pound would not be as strong, even though it’s in a weak position as it is, it would be even weaker without the positive flow of money into the economy through purchasing oil and gas from our sector.”

In terms of resilience, is he concerned about the UK’s current relationship with Russia in terms of gas supply? Yes and no, he says.

“It’s not often talked about but Scotland produces six times more gas than we use, so yes, there’s a problem at a UK level, but as someone who believes in independence…Scotland has its own supply of gas and we produce six times more than we need.

“And from an oil point of view, we’ve got the vast majority, about 90 per cent, of UK oil reserves, so it’s not in the short term a problem.”

He continues: “Obviously, it’s being used to meet UK-wide demand and that’s important for the sector, to sell its gas to the rest of the UK, but we’ve got natural resources in significant quantities.

“We’ve been very lucky in terms of natural and oil in the previous era, if you like, and we’ve got renewables coming out of our ears, so we are very lucky both ways round.”

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