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Publication - Report

Climate Change Plan: third report on proposals and policies 2018-2032 (RPP3)

Published: 28 Feb 2018

This plan sets out the path to a low carbon economy while helping to deliver sustainable economic growth and secure the wider benefits to a greener, fairer and healthier Scotland in 2032.

222 page PDF

2.9 MB

222 page PDF

2.9 MB

Contents
Climate Change Plan: third report on proposals and policies 2018-2032 (RPP3)
Chapter 1 Electricity

222 page PDF

2.9 MB

Chapter 1 Electricity

The electricity sector covers generation and the wider electricity system of Scotland.

Where We Are Now

  • 48% fall in electricity generation emissions between 1990 and 2015

Scotland's electricity generation mix has changed significantly since 1990 – emissions had fallen 48% by 2015, to 7.7 MtCO 2e.

The volume of Scottish electricity generated from renewable sources has increased almost fourfold since 2002, accounting for 42.9% of Scottish electricity generation in 2016.

Renewables generated the equivalent of 54.0% of Scotland's electricity demand in 2016, from just over 12% in 2000 – which means we have met our interim target to deliver the equivalent of 50% of Scotland's electricity needs from renewables by 2015, with strong growth reported in the latest three quarters of 2017.

Generation located in Scotland has successfully contributed toward Scottish and UK renewable energy targets, and a large pipeline of projects remain that could continue to provide cost-effective, carbon-free generation to the GB network.

By 2016, 42.8% of Scotland's electricity supply came from nuclear energy. This represents an increase from 2007, when nuclear energy represented 25.7% of Scotland's electricity supply.

Figure 3: Electricity generation historical emissions
Figure 3: Electricity generation historical emissions

In the Electricity System

  • Scotland is a world leader in renewable energy
  • we aim for 100% of Scottish electricity demand met by renewables by 2020
  • renewables generated 42.9% of our electricity production in 2016, meeting the majority of Scottish demand
  • Scotland almost quadrupled its renewable electricity generation between 2002 and 2016

Fossil fuel powered electricity generation as a whole has decreased from 31.9% in 2013 to 13.2% in 2016. This reflects, in part, the closure of Cockenzie coal-fired power station in 2013 and the closure of Longannet coal-fired power station in March 2016.

Scotland has consistently been a net exporter of electricity over the past decade, exporting 20% of the electricity generated in 2016 to the rest of the UK (despite the closure of Longannet Power Station) – down from 29% in 2015.

Emissions from the electricity sector are entirely covered by the EU Emissions Trading System ( EU ETS).

Progress Since RPP2

RPP2 set out the ambition to have a largely decarbonised electricity system with a grid-intensity of 50 grams carbon dioxide per kilowatt hour ( gCO 2/ kWh) of generation by 2030. The carbon intensity of Scottish electricity generation has reduced from 318 gCO 2/ kWh in 2010, to 151 gCO 2/ kWh in 2015. The closure of Longannet coal fired power station in 2016 will have further reduced this figure considerably, and this will be reflected when the relevant statistics become available (mid-2018). This will bring the carbon intensity figure close to the RPP2 target level.

Our Ambition

Figure 4: Electricity generation emissions envelopes
Figure 4: Electricity generation emissions envelopes

Our ambition for the electricity sector, as set out in this chapter, is consistent with the Scottish Government's Energy Strategy [49] published in December 2017.

In 2032, Scotland's electricity system will be largely decarbonised. The system will be powered by a high penetration of renewables, with security of supply and system resilience aided by a range of flexible and responsive technologies. Emissions are expected to fall by 28% (0.8 MtCO 2e) over the period covered by this Plan.

Electricity will meet a growing share of Scotland's energy needs. Alongside lighting our buildings and powering household appliances, electricity will be increasingly important as a power source for keeping our homes warm and our vehicles on the move.

Efforts to reduce demand and achieve efficiencies in Scotland's electricity use will affect the amount of electricity we consume. However, the electrification of heat and transport will place additional demands on the electricity sector and the networks that support it. As a result, the total volume of electricity supplied within Scotland will increase to 2032, based on 2015 actuals.

Our growing use of electricity will increase the value we place on a secure system that produces, stores and distributes clean, affordable electricity. Our ambition supports a diverse range of generation and storage technologies working alongside innovative, smarter networks to deliver sufficient supply and ensure an efficient, resilient system.

Our Ambitions in the Electricity Sector

  • by 2032 – Scotland's electricity system will be largely from renewable sources including onshore wind, offshore wind, hydro, solar, marine and bioenergy
  • from 2020 onwards, Scotland's electricity grid intensity will be below 50g of CO 2 per kilowatt hour
  • smart grid technology and better connection will improve the electricity system
  • at least 1 GW of renewable energy will be in community or local ownership by 2020
  • in 2032, Scotland's electricity system will be largely decarbonised

A range of renewable technologies will deliver clean, affordable electricity, including onshore, offshore and island wind, hydro, solar, marine and bioenergy. The electricity generation emissions envelope set out in this Plan allows for a renewables-dominant power system to be supported by cleaner, more efficient and flexible gas generation.

Scotland's lead in electricity network innovation will continue, allowing our networks to evolve and meet new demands in a way that delivers value for consumers. The integration of storage, smart technologies and innovative approaches to network management at scale will enable our energy assets to be used effectively, and ensure we get the greatest benefit from our generation and network infrastructure.

Carbon Capture Storage ( CCS) is not required for the delivery of the electricity generation emissions envelope out to 2032. It does, however, represent the only viable technology capable of mitigating industrial scale CO 2 emissions in some of the world's most carbon intensive industrial processes. CCS may also help unlock the potential for large scale hydrogen production. The near-term demonstration of small scale CCS projects, along with the development of CO 2 Utilisation ( CCU) applications, will be critical for the cost-effective decarbonisation of heat, power and industry.

We are contributing £100,000 of funding towards the feasibility study ACORN CCS Project, a small scale CCS demonstrator targeting CO 2 emissions from industrial gas–processing at St. Fergus in Aberdeenshire.

We are participants in the ALIGN- CCUS project, a European collaboration including the Netherlands, Germany, Norway, Romania, the United Kingdom, industry representatives, academics, and NGOs. Objectives are designed to enable the acceleration of CCUS in specific industrial regions, including Grangemouth and Teesside in the UK.

We are funding Scottish Carbon Capture Storage ( SCCS) to carry out a programme of work to assess opportunities to support the delivery of demonstration facilities for CCS and CO 2 Utilisation on the ground in Scotland.

The UK Government holds many of the key levers necessary to bring CCS forward. We continue to press for the right policy and framework to be put in place to support this technology. Scottish Government officials are participating in the UK Government's recently formed Ministerial-led CCUS Council and the CCUS Cost Reduction Taskforce.

The United Nations Inter-Governmental Panel on Climate Change ( IPCC), the International Energy Agency ( IEA) and the Committee on Climate Change have all identified CCS as an essential lowest cost climate mitigation technology. The IPCC Fifth Assessment Report [50] states that it would cost 138% more to achieve a 2°C scenario without CCS.

Our ambition will be realised as part of a long-term process of sector development. This is largely a reserved area of policy, with key regulatory changes determined and implemented by the regulator, Ofgem. We will seek to influence and guide changes to market and regulatory arrangements and encourage technical innovation in a manner that supports our policy aims and delivers a positive outcome for the Scottish electricity sector.

We will continue to work with the UK Government and Ofgem to promote a smart, flexible energy system and support investment in low carbon electricity by working with our public sector partners and industrial trade associations.

Policy Outcomes, Policies, Development Milestones and Proposals

Policy outcome1:

From 2020 onwards, Scotland's electricity grid intensity will be below 50 grams of carbon dioxide per kilowatt hour. The system will be powered by a high penetration of renewables, aided by a range of flexible and responsive technologies.

There are two policies, five policy development milestones and five proposals from the Energy Strategy which will contribute to the delivery of policy outcome 1.

Policies which contribute to the delivery of policy outcome 1

1) Support the development of a wide range of renewable technologies by addressing current and future challenges, including market and policy barriers.

The Scottish Government's ability to influence the future energy mix is limited, as the relevant support and market mechanisms are under the UK Government's control. The Feed-In Tariff, the Renewables Obligation and Contracts for Difference ( CfD) are UK-wide subsidy schemes that provide a route to market for renewable electricity projects.

The UK Government's Clean Growth Strategy (October 2017) has committed up to £557 million for further Pot 2 CfD auctions from 2019. This will provide an opportunity to support the deployment of less established renewable technologies in Scotland. These include offshore wind, island wind (subject to State Aid approval), marine technologies, advanced conversion technologies, anaerobic digestion and biomass with combined heat and power, although the Scottish Government knows that minimal ring fenced funds could have been set aside for marine and other less well established technologies that may struggle to compete with offshore wind.

To accommodate UK subsidies, we have a suite of renewable policies and levers designed to maximise the support available to the renewable energy industry in Scotland.

Scotland is leading the way across the UK in its support for community and locally owned energy, providing comprehensive support, available under our Community and Renewable Energy Scheme ( CARES). Since 2013, £45 million has been made available through CARES, to support almost 600 operational community and locally-owned energy projects, of which 265 were community schemes. The main components of CARES are local energy ownership and shared ownership, both of which are facilitated through a range of interventions from start-up grants to pre- and post-planning loans, and by bespoke advice and support free at the point of use.

Over the past four years, the Renewable Energy Investment Fund ( REIF) has given vital support to most of the major projects deployed in the community energy sector in Scotland. Scottish Enterprise has worked closely with the CARES contractor Local Energy Scotland, and with other partners, including Social Investment Scotland and commercial lenders, to facilitate deals and streamline diligence costs. REIF has also been vital to the development of the marine energy sector in Scotland, and has been recognised in Europe in this regard as a template for investment. To date, £60 million has been invested through REIF to support over 30 projects, leveraging in more than twice this amount in private investment.

Under section 36 of the Electricity Act 1989, the Scottish Government determines renewable electricity applications for projects with an installed capacity of over 50 Megawatts. Below this threshold, decisions are made by the relevant local authorities under the provision of the Town and Country Planning Act 1990.

The Scottish Government has taken a number of steps through planning policy and the consenting process to ensure renewable technologies are located correctly, minimising the impacts on environmental and residential amenities.

We have supported offshore wind development in deeper waters through an enhanced level of support under the Renewable Obligation (Scotland) Order, leading to the deployment of the world's first floating offshore wind farm and the development of the European Offshore Wind Development Centre in Aberdeen, with further consented projects in the pipeline.

We have supported innovation and cost-cutting in the sector, by hosting and providing financial support for the work of the Offshore Renewable Energy Catapult ( OREC). Wave Energy Scotland ( WES) was established at the end of 2014 and has allocated over £25 million to support projects around Europe. WES provides up to 100% funding for the development of innovative technologies to produce low cost, efficient and reliable components and subsystems. It is fully funded by Scottish Government and delivered by Highlands and Islands Enterprise ( HIE).

The participation of the Scottish Government in the Carbon Capture Utilisation and Storage ( CCUS) Council and Taskforce, proposed in the UK Clean Growth Strategy document (October 2017), to produce a deployment pathway for CCUS in 2018 will ensure that Scotland's priorities, opportunities and interests, such as the preservation of critical infrastructure and the demonstration of CCS pilot projects in Scotland, are reflected in this work.

2) Support improvements to electricity generation and network asset management, including network charging and access arrangements that encourage the deployment and viability of renewables projects in Scotland.

Scotland has been at the forefront of network innovation, with Active Network Management schemes operated by the network companies now 'business as usual'. Smart technologies and innovative approaches to network management are enabling network and generation assets to be used more effectively. This delivers benefits as capacity and constraints on Scotland's networks are better managed, generators are offered faster and cheaper connections, and consumers avoid paying for costly grid reinforcements.

Continued progress in this area will help secure the greatest benefit from network infrastructure and investment, supporting the connection of more renewable capacity. The evolution of Distribution Network Operators ( DNOs) to Distribution System Operators ( DSOs) will play a key coordinating role in ensuring we maximise the benefits of transitioning to a low carbon energy system. This is likely to see the current DNOs take on additional roles and responsibilities and play a more active role in facilitating the matching of local supply with local demand. The development of DSOs raises a number of regulatory and policy issues that need to be explored and understood to ensure that future DSOs are able to meet the needs of consumers and society. These issues include the split of roles and responsibilities between industry parties, and the design of new governance and commercial arrangements.

These are being considered through industry and Ofgem-led processes, in which the Scottish Government will remain actively engaged.

Both Ofgem and National Grid as the System Operator are currently pursuing comprehensive reviews of network charging, with Ofgem considering future network access arrangements. These often act as a barrier to renewables deployment in Scotland. For example, current transmission network charging arrangements (reserved to the UK Government) do not account for the reality that many of the best renewable energy resources are far from centres of demand, or that certain system requirements have strong locational characteristics.

Forthcoming changes to the charging regime and network access arrangements could have a significant impact on renewable energy investment in Scotland.

The Scottish Government will play an active part in these and future reviews. We will engage with stakeholders and the key determining bodies to ensure that the potential impacts on Scotland's energy system are understood and that Scotland's interests and energy ambitions are well represented in decision-making processes.

Policy development milestones

1) UK Government delivers a viable route to market for a wide range of renewable technologies, including onshore wind in Scotland, and provides long term funding for projects commissioning after 2025 under the Levy Control Framework.

The Scottish Government will continue to make the case to the UK Government for a stable, supportive regulatory regime that provides appropriate support for investment in renewable energy. This will include the need for a route to market for lowest cost renewable technologies, including onshore wind.

We will press the UK Government to provide clarity on the Levy Control Framework post-2025 to ensure long-term support and certainty for investment in the renewables sector.

We will also continue to pursue policies and goals within our own gift to secure this route to market, and to ensure that as wide a range of onshore and offshore renewable technologies as possible are able to develop in the right places – securing as much economic and industrial benefit for Scotland as possible.

2) The £557 million CfD budget for Pot 2 technologies delivers new renewable generation capacity in Scotland, including on the remote islands.

The Scottish Government will work with the UK Government, industry, local authority partners and communities to maximise the support available to Pot 2 renewable technologies in Scotland.

3) By 2020, at least 1 GW of renewable energy will be in local or community ownership.

CARES will support Local and Community Owned Energy projects, including through a focus on opportunities for community stakes in commercial schemes.

4) Successful delivery of Renewable Energy Investment Fund ( REIF), Community and Renewable Energy Scheme ( CARES), and Low Carbon Infrastructure Transition Programme ( LCITP).

REIF and CARES will continue to build on their success to date, and to be ready to adapt to meet emerging priorities and market changes. By 2018, the LCITP will have supported a large number of projects to demonstrate technologies that will deliver low carbon energy solutions.

5) The evolution of Distribution Network Operators to Distribution System Operators.

We will continue to work with all energy stakeholders, the regulator and UK Government to ensure that future electricity network arrangements meet the needs of Scotland's energy system and society.

Case Study

Garmony hydro scheme
Garmony hydro scheme

Source: Community Energy Scotland

Mull's ACCESS (Assisting Communities to Connect to Electric Sustainable Sources) project shows how communities can develop local electricity networks in areas where the grid has limited capacity to connect renewable generation.

Mull has rich resources of renewable energy, but limited access to the national grid. ACCESS aims to balance local generation with local demand on the distribution network level, a model that has great potential for the future of electricity supply and demand in Scotland.

The Mull and Iona Community Trust have worked with Community Energy Scotland to develop a local network that offers benefits to local homes and businesses, in an area which is off the gas grid and therefore dependent upon heating oil or electric storage heaters.

Renewable energy from the Garmony hydro scheme is used locally, balanced with local demand by a smart distribution network developed for the project.

The ACCESS project will demonstrate these new distribution network technologies and develop financial models with the potential to be duplicated across Scotland, reducing fuel poverty and supporting renewable energy.

Policy proposals

The Scottish Energy Strategy contains proposals that will increase the level of renewable electricity generation, including new targets and commitments to continue supporting the key renewable generation technologies. These include:

1) A new renewable, all energy consumption target of 50% by 2030, covering electricity, heat and transport.

2) Renewed efforts to secure routes to market for a range of renewable technologies.

3) The development of a whole-system bioenergy action plan.

4) Continued support for offshore wind development and innovation.

5) Renewed focus on developing local energy systems and models.

Monitoring

Policy output indicator for policy outcome 1

1) For the duration of the Plan Scotland's electricity grid intensity will be below 50g CO 2 per kilowatt hour, powered by a high penetration of renewable technologies, including onshore wind, offshore wind, island wind, hydro, solar, marine and bioenergy.

Year 2018 2025 2032
Electricity Grid Intensity ( gCO 2 per kilowatt hour) Below 50 Below 50 Below 50

Policy outcome 2:

Scotland's energy supply is secure and flexible, with a system robust against fluctuations and interruptions to supply.

There is one policy, six policy development milestones, and five proposals from the Energy Strategy which will contribute to the delivery of policy outcome 2.

Policy which contributes to the delivery of policy outcome 2

1) We will support the development of a range of technologies in Scotland that aid system security, flexibility and resilience.

We will support the deployment of a wide range of generation technologies in Scotland to allow for a high penetration of renewables and provide a resilient, secure and flexible power system.

We will continue to press the UK Government for changes to the transmission charging regime and wider market arrangements that improve the prospects for new gas-fired generation in Scotland. Cleaner, more efficient and flexible gas-fired generation is a natural complement to a high renewables future. Gas-fired generation can be scheduled and controlled, meaning that it can be instructed to power up or down depending on rising or falling demand. It provides "synchronous" power, helping to maintain a stable frequency across the network and increase its resilience. The location of synchronous generation throughout the network provides system-wide benefits – but this locational value is not fully reflected in existing charging and market mechanisms. Stronger and fairer location incentives and signals will help realise a resilient, low carbon electricity system in Scotland. Policy outcome 1, for Scotland's grid intensity to remain below 50 grams of carbon dioxide per kilowatt hour, allows for continued gas-fired generation in Scotland.

The application of storage technologies will be strategically important and can deliver real benefits for Scotland. Storing electricity offers the opportunity to firm up renewable generation, provide ancillary services, and support further renewables deployment in areas where network capacity is limited or weak. Delivery of the UK Smart Systems and Flexibility Plan [51] , jointly published by BEIS and Ofgem in July 2017, includes a strong commitment to improve the prospects for and uptake of electricity storage. We will work with BEIS and Ofgem to deliver a Plan that works for Scotland. We will continue to support innovation and the deployment of storage by working with the energy sector and academic stakeholders on steps to accelerate the penetration of storage across Scotland.

We will support industry calls for the UK Government to deliver a level-playing field for Pumped Storage Hydro ( PSH) and de-risk investment for new projects. PSH is a proven technology that can deliver flexibility at scale. Scotland's existing pumped hydro stations will continue to operate, providing electricity supply and ancillary services. Further investment in PSH will greatly enhance the flexibility and resilience of our electricity network and power supplied. Several Scottish sites identified for future investment are able to more than double current GB capacity, with significant benefits in terms of enhancing GB's 'black start' capacity.

Scotland's long-standing interconnection with England and Northern Ireland will continue. This will enable Scotland to benefit from and contribute towards the operation of a GB-wide electricity market. This will be complemented by enhanced interconnection with other power markets and networks. Increased interconnection can facilitate lower electricity prices, support the transition to a low carbon economy and increase diversity of supply. There are currently several UK interconnector projects at various stages of development. These include the NorthConnect cable that would enable renewable electricity to be traded directly between Scotland and Norway.

Paired with CCS, natural gas has the potential to be used in future to provide low carbon flexible power generation. The successful deployment of CCS, alongside the development of gas from plant material and biomass waste, has the potential in the longer term to deliver an overall emissions envelope for electricity which removes carbon dioxide from the atmosphere. We are supporting Scottish Carbon Capture Storage ( SCCS), the largest CCS research group in the UK, to continue important research and studies in this field. We are contributing funding to the Acorn Project, which is completing detailed feasibility work on the practicalities of repurposing existing assets for CCS in Scotland. We will continue to build on Scotland's world-renowned academic and research reputation, including the links between the Scottish Government and European projects proposed in the North Sea Basin in Norway and the Netherlands, and applying the learning from the collaborative CCUS research work being developed in Guangdong Provence in China.

Policy development milestones

1) Delivery of UK Smart Systems and Flexibility Plan [52] jointly published by BEIS and Ofgem in July 2017, which encourages storage, flexibility and demand-side response.

New regulatory and commercial arrangements allow flexibility for technologies to compete fairly in the market. These arrangements should support the benefits of a smart, flexible energy system being captured across the GB energy system, especially in areas where significant value can be derived.

2) Changes to regulatory and market mechanisms that provide a sufficient and fair incentive to maintain – or to invest in new – synchronous generation in Scotland, such as efficient thermal generation.

Changes to current market and regulatory arrangements, which are reserved to the UK Government, support a spread of synchronous generation across GB and in Scotland.

3) New investment in Scotland's Pumped Storage Hydro potential.

Strategic investment in Scotland's Pumped Storage Hydro is brought forward, which requires progress on providing investor certainty on routes to market.

4) Increased GB interconnection with other power networks and markets.

Ofgem's cap and floor regime has encouraged investment in electricity interconnectors, with current GB capacity set to double by the mid-2020s. We will continue to work closely with projects such as NorthConnect, and consider its potential economic and supply chain benefits for Scotland, as well as its implications for investment in domestic capacity and security of supply.

5) The evolution of Distribution Network Operators to Distribution System Operators.

DSOs will play an important coordinating role in maximising the benefits of our transition to a low carbon power system.

6) Encouraging the demonstration and commercialisation of Carbon Capture and Storage ( CCS) in Scotland.

CCS depends upon a committed and robust policy framework from the UK Government to support the delivery of this technology. The UK Government has committed in its Clean Growth Strategy (October 2017) to set up a Ministerial-led CCUS (Carbon Capture Utilisation & Storage) Council, and to convene a CCUS Cost Challenge Taskforce to produce a deployment pathway in 2018. The participation of the Scottish Government in these groups, working closely with the Department of Business Energy and Industrial Strategy ( BEIS), will ensure that Scotland's priorities, opportunities and interests such as the preservation of critical infrastructure and the demonstration of CCS pilot projects in Scotland are reflected in this work.

Policy proposals

The Energy Strategy underlines our determination to work with the UK Government, electricity sector, the regulator, grid owners and system operator to maintain a balanced and secure electricity supply and system.

The Strategy includes proposals to:

1. Press for market mechanisms and incentives which recognise locational value, and which do not create undue barriers for investment in Scotland.

2. Collaborate on actions to support investment in new pumped storage hydro capacity.

3. Work with all parties to secure maximum benefits from the move towards smarter and more flexible electricity systems and networks.

4. Support innovation and deployment of storage technologies and capacity.

5. Ensure that increased interconnection enhances Scottish system security while considering effects on domestic capacity and investment.

Monitoring

Policy output indicator for policy outcome 2

1) Scotland's energy supply is secure and flexible, with a system robust against fluctuations and interruptions to supply.

Over the period of the Climate Change Plan, Scotland's energy system will evolve and the Scottish Government will use all available levers, while collaborating with and influencing all key stakeholders and partners, to ensure that the regulatory and technological changes support a robust and flexible system that meets the needs of people in Scotland. These changes will be regularly monitored and reported on as part of the overall monitoring framework.

Implementation indicators for policy outcomes 1 and 2

1) Increase amount of electricity generated from renewable sources in Scotland.

2) Increase the installed capacity of sites generating electricity from renewable sources in Scotland. By 2030, it is expected that the installed capacity of renewable electricity generation sources will be between 12 GW and 17 GW.

3) Increase total community and locally owned renewable energy capacity operational, and in development, in Scotland.

4) Increase total renewable capacity in Scotland by planning stage.

5) Increase the share of electricity generated from renewable sources, as a proportion of total electricity generated in Scotland.

Explanation for selection of indicators

  • Continued growth in renewable generation sources will reduce the carbon emissions from electricity generation.
  • An increased penetration of installed renewable capacity will contribute to reducing the carbon intensity of Scotland's electricity grid.
  • The Scottish Government wishes to maximise the benefits for communities from renewable energy and believes that a community can gain from renewable projects, over and above the energy generated and financial benefits.
  • The number and installed capacity of renewable generation installations in the planning pipeline gives an indication of the future level of penetration of these generation technologies in the energy mix in Scotland.
  • Increasing the share of electricity generated from renewable sources as a proportion of total electricity generated highlights the increase in low carbon generation compared to fossil fuel generation.

Enabling factors and wider impacts

There are wider benefits for consumers and businesses arising from a smarter, more flexible energy system. The National Infrastructure Commission estimates that a 'smart' system could provide gross benefits to consumers of between £3 billion and £8 billion a year to 2030, consistent with the outcomes of other research in this area. Scottish companies and academic institutions have been active early in the smart sector, and there is the potential to secure economic benefits if the pace of change is maintained.

  • £3-£8 billion a year to 2030 estimated gross benefit delivered to consumers from smart grid electricity system.

The costs of renewable electricity generation technologies have steadily fallen in recent years, and the results of recent power auctions have signalled that cost reductions are set to continue into the 2020s.

Recent analysis conducted by the International Renewable Energy Agency [53] found that renewable power is becoming an increasingly competitively priced way to meet our electricity needs. Between 2010 and 2017, the cost of generating electricity from solar PV fell by over 70%, from onshore wind by around a quarter and from offshore wind by 18%. Among the main drivers of these cost reductions have been falling technology costs, technology improvements, competitive procurements and a larger base of internationally experienced project developers.

Investment to enhance the competitiveness and productivity of Scotland's low carbon electricity generation and network sector will contribute to the Scottish Government's wider objectives of sustainable economic growth. This will ensure that highly skilled employment opportunities continue to be located in Scotland, benefiting all people across Scotland, in both urban and rural areas.

Scotland is recognized internationally as a knowledge hub for energy exploration and production, for power system engineering and a host of modern, renewable energy technologies and systems. We are at the forefront of the challenge to decarbonise the global economy. We wish to combine the mutual strengths, capacities, skills and ideas of communities, industry, and other stakeholders in shaping and delivering Scotland's future energy system.

As with any industry requiring significant capital investment, there may be the potential for impacts to arise from the construction, operation and decommissioning of new renewable or low carbon developments ( e.g. risks of impacts to air, soil, water, biodiversity and visual impacts to cultural heritage and landscape, displacement of other land or marine users, amongst others).

The Scottish Government will continue to ensure that adverse impacts are considered as part of the planning process, and that developments are permitted in the appropriate locations.


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