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‘An Inquiry into the Future of the Renewable Energy Industry in Scotland'

Scottish Parliament Enterprise and Culture Committee Inquiry into Renewable Energy in Scotland

The UNISON Scotland Evidence

January 2004

Executive Summary

  • UNISON Scotland believes that any proposal to expand the generation of energy from renewable sources has to be seen in the context of the Scottish energy industry as a whole. This industry is vital to the Scottish economy and is facing serious challenges.

  • UNISON Scotland supports the expansion of generating capacity through renewable sources with more challenging targets. We believe the 18% target by 2010 is achievable.

  • We do not believe the 40% target by 2020 is achievable. The scope for additional onshore wind power is limited by available sites and likely to be slowed by public opposition, however misguided that opposition may be. Other technologies remain unproven and therefore do not, at this time, justify such an optimistic assessment of their potential.

  • UNISON Scotland believes that unrealistic targets for renewables are already diverting government attention from the need to support clean coal technologies (CCT). It is our belief that the current level of government funding for CCT is totally inadequate.

  • UNISON Scotland believes that the Scottish Executive should adopt a balanced energy strategy which includes a mix of capacity which would include a larger element of renewables when proven capacity can be delivered.

  • UNISON Scotland is concerned that a key stumbling block to the development of a renewables energy industry in Scotland is the lack of grid capacity in areas where renewable generation is likely to occur. We remain to be convinced that the current reforms being developed by Ofgem and the DTI create the right signals to bring large-scale investments in grid upgrades.

  • UNISON Scotland believes that the Scottish Executive should provide support and stimulation to those forms of energy, which have the potential to add value to the economic development of our country.

  • Local planning control must be maintained. UNISON Scotland is concerned that the decisions on wind farms are increasingly being taken at the central level by the Scottish Executive, rather than by local authorities. We believe that this weakens local democratic accountability and helps to fuel opposition to renewable projects in local communities.

  • The Scottish Executive should focus on action to lessen any negative views within local communities, and to mitigate the environmental impact of wind turbines and transmission lines. The economics of renewable energy should be better explained to communities who are being mislead into believing that this equivalent to oil exploration in terms of community benefit.

  • Also, UNISON Scotland would strongly urge the Executive to apply the Waste Framework Directive sensibly. We are convinced that a failure to do so would effectively bring to an end the combustion of Waste Derived Fuel (an environmentally sound method of fuel generation) at Longannet Power Station.

Introduction

UNISON is Scotland's largest trade union and a major trade union in the energy industry. Our members in other sectors including local government also have an interest in this issue. In addition, our wider membership is concerned to ensure that Scotland has a safe, reliable, clean and secure supply of electricity. We therefore welcome the opportunity to respond to the Scottish Parliaments' Enterprise and Culture Committee's inquiry into Scotland's renewable energy strategy and potential.

This paper constitutes UNISON Scotland's response to the Enterprise and Culture Committee's inquiry into Renewable Energy in Scotland. It should be noted that this UNISON Scotland response does not attempt to address every question set by the Committee as we feel that specific aspects of the inquiry are more appropriately commented on by others.

Background

There has been widespread support in Scotland for developing sources of renewable energy, and Scotland is judged by many commentators to have significant potential in this regard. Scotland already has a relatively high level of electricity generated from renewables due to the historic role of hydroelectric power. Currently approximately 13% of Scottish energy generated in Scotland comes from renewable resources.

The Scottish Executive has set ambitious targets for increasing the percentage of electricity derived from renewable sources. The targets are 18% of electricity generated in Scotland to be from renewable sources by 2010, and an ‘aspirational' target of 40% by 2020. Some commentators have questioned the achievability of these targets under current circumstances.

In addition to the doubts currently being raised about renewable energy targets there has also been growing opposition to the development of wind farm sites in Scotland. All of this has raised the level of debate in regards to the viability of the Executive's renewable energy strategy.

As such, the Enterprise and Culture Committee recently announced an inquiry into the development of renewable energy in Scotland. The inquiry has a remit to focus on the potential economic benefits associated with the development of the Scottish renewable energy market and will consider whether current Scottish Executive policy on renewable energy creates opportunities or barriers to development, both for local communities and the wider Scottish economy.

This document is UNISON Scotland's response to the renewable energy in Scotland inquiry.

Responses

Renewable targets

UNISON Scotland believes that any proposal to expand the generation of energy from renewable sources has to be seen in the context of the Scottish energy industry as a whole. This industry is vital to the Scottish economy and is facing serious challenges.

UNISON Scotland is concerned that the Executive treats renewable energy in isolation to the rest of the industry. Whilst recognising that this is a reflection of the crossover between reserved and devolved powers, joined up government would be preferable.

UNISON Scotland supports the expansion of generating capacity through renewable sources with more challenging targets. We believe the Scottish Executive target of 18% renewable generation by 2010 is achievable. It is a modest increase on current generating capacity and well below that planned by other European countries. Currently Scotland ranks only 10th out of 13 in a table compiled by the Scottish Renewables Forum. In addition, it does not require a substantial upgrading of the transmission and distribution networks and could be achieved by utilising proven technology.

However we do not believe the 40% target by 2020 is realistic nor achievable. The scope for additional onshore wind power is limited by available sites and likely to be slowed by public opposition. Demands for five fold increases in contributions from wind farm developers are also unlikely to encourage growth. Other technologies remain unproven and therefore do not, at this time, justify such an optimistic assessment of their potential.

Unrealistic targets for renewables are already diverting government attention from the need to support clean coal technologies (CCT). The level of government funding is totally inadequate. Coal generation will still be required even if the renewable targets are achieved and therefore CCT projects such as that proposed at Longannet should be supported now.

In reference to Longannet, UNISON Scotland is concerned that the Executive finds a way of sensibly applying the Waste Framework Directive so that Waste Derived Fuel (WDF) is not classed as waste. We believe that to classify WDF as ‘waste' under this Directive would require Longannet to spend a sum in excess of £400 million in plant upgrading costs. This is clearly not viable and we strongly urge the Executive to apply the Directive in an appropriate manner. UNISON Scotland Believes that failure to do so will jeopardise this environmentally sound method of fuel generation in Scotland, sacrificing jobs and undermining the Executive's sustainable and environmental protection policies.

Reliability of supply

As demand for electricity varies at different times of the day and year it is vital that the Executive gives consideration to the reliability of renewable power at moments of peak demand. UNISON Scotland believes that because of the intermittent nature of currently viable renewable energy, Scotland must not become over dependent on it. To do so would mean that Scotland would become vulnerable to the type of energy blackouts that occurred in Italy in the summer of 2003.

As such, UNISON Scotland believes that a Scottish energy strategy should be based on a planned market for energy combined with security of supply as well as social, employment and environmental objectives.

The key principles should be:

  • A balanced electricity generation policy from a number of sources to minimise volatility and ensure security of supply. In the present ‘competitive' market no company will invest in new generation capacity or even modernise existing plant. Security of supply will eventually become a real issue for the UK.

  • For the foreseeable future a continuing role for gas and coal generation at current generating levels, subject to the introduction (with government research support) of clean coal technologies. The dependence on gas (from insecure overseas supplies) envisaged in the Energy Review is unsustainable.

  • Given Scotland's current dependency on nuclear generation there is no medium term viable alternative to nuclear if Scotland is to meet its climate change obligations. However, replacing only the first facility due for closure should reduce our nuclear dependency. This replacement would also be subject to resolving waste management issues as set out in ‘Partnership for a Better Scotland'.

  • Demand for electricity should be reduced by the promotion of energy efficiency with new resources for local government and revised targets including new building standards. This should be coupled with a better co-ordinated drive against fuel poverty. Government targets for the growth of Combined Heat and Power should be increased with appropriate support.

The practical application of these principles involves public awareness of the costs of a renewable energy strategy. The current incentives provide a false picture of the profitability of the renewable energy market. Even allowing for the cost benefits of larger scale production the renewable premium could be as much as 15% on energy bills. Such a price increase has implications for the Scottish Executive's fuel poverty strategy.

There is also a need to plan now for replacement generating capacity using proven technologies. One of the major disappointments in the current Energy Bill is any recognition of this need. Major power station closures in Scotland over the next 20 years could quickly lead to a supply crisis with major economic consequences. We need to provide the incentives for investment in the replacement power stations urgently.

Funding and support

In addition, UNISON Scotland believes that the Scottish Executive should provide support and stimulation to those forms of energy, which have the potential to add value to the economic development of our country.

As such, we are pleased that the Executive has committed itself to funding a number of initiatives in support of renewables R&D. However, UNISON Scotland also believes that it is important for the Scottish Executive to maintain consistent support post-2010 to ensure business confidence and the continued creation of skilled jobs in the longer term.

It is the belief of UNISON Scotland that targeted and consistent levels of Executive funding has the ability to stimulate the growth of a Scottish industry in renewables exploitation, create new and skilled jobs and help maximise the economic benefits of renewables energy in Scotland.

The Electricity Market

The Highland and Islands of Scotland is home to the greatest concentration of potential renewable energy in the UK. As such, UNISON Scotland believes that the Executive's targets to increase the use of renewables over the next 20 years offers significant opportunities for this economically underdeveloped region of Scotland.

Research by Highlands and Islands Enterprise (HIE) has identified 3,000MW of planned offshore wind activity in Scotland over the next 3 years, of which 75% is planned for the Highlands and Islands. Whilst we are sceptical that this capacity is achievable we remain concerned that the current regulatory management of the electricity industry has the potential to undermine the successful exploitation of wind-generated electricity in the Highlands and Islands.

We believe that it is essential that Ofgem's desire to see the extension of competition throughout the UK electricity industry not be allowed to negatively impact on renewable development potential in the Scotland. The Executive must ensure that discrimination, based on distance from electricity markets, is not permitted to discourage the use of Scotland's renewable resources. In this respect we welcome the recent DTI decision not to allow zonal transmission loss under BETTA.

Infrastructure

UNISON Scotland is concerned that a key stumbling block to the development of a renewables energy industry in Scotland is the lack of grid capacity in areas where renewable generation is likely to occur. Whilst the Highlands and Islands are expected to play a significant part in meeting renewable targets the grid in these parts needs reinforcement to ensure that power can be moved from point of generation to point of use.

UNISON Scotland remains unconvinced that the current reforms being developed by Ofgem and the DTI create the right signals to bring large-scale investments in grid upgrades. Indeed, it is the view of UNISON Scotland that a competitive marketplace in UK electricity is largely responsible for preventing much needed investment in UK power plants and has had an overall negative effect on investment in power projects in the UK. The current distribution price review also needs to provide sufficient incentive to the power companies to invest in the transmission and distribution networks.

Community Benefit

There are limited long-term economic benefits for local communities from the creation of wind farms. Most jobs created are usually only temporary and only at the construction stage other than the maintenance of networks. It is the view of UNISON Scotland that this evident lack of economic benefit for affected communities has strengthened local opposition and hindered the development of renewable energy.

The Scottish Executive should focus on action to lessen any negative views within local communities, and to mitigate the environmental impact of wind turbines and transmission lines. The economics of renewable energy should be better explained to communities who are being mislead into believing that this is equivalent to oil exploration in terms of community benefit.

According to the latest DTI/Scottish Enterprise analysis of the renewable supply chain only some 400 jobs are being created. The aspirational numbers are highly optimistic, with no guarantee that permanent long term employment will be created at that level. In contrast conventional power stations bring considerable local and national economic benefit including substantial high quality employment.

Strengthening Local Planning Control

With the growing trend towards larger wind farms that generate an increasing amount of power, there is now an obvious logic to developing suitable sites to their full potential. This has resulted in a rising number of planning decisions being removed from the planning system, as they then fall under Section 36 of the Electricity Act 1989.

UNISON Scotland is concerned that increasingly the decisions on wind farms are being taken centrally by the Scottish Executive, rather than local authorities. We believe that this not only deprives local authorities of planning fees, but also more importantly, removes the automatic trigger to a public inquiry if there are objections, and thus weakens local democratic accountability.

It is the opinion of UNISON Scotland that decisions taken so far geographically or democratically from any affected local area will ultimately have a negative impact on the development of renewables energy in Scotland. We believe that the lack of obvious local democratic accountability coupled with a centralised planning process, lacking sufficient transparency, will strengthen the view within affected communities that their concerns are not being given proper consideration.

Conclusion

As stated above UNISON Scotland strongly supports the expansion of generating capacity through renewable sources. We agree that targets should be more challenging than at present. However, we believe the proposed 40% target is unrealistic and possibly undesirable, unless it is part of a balanced energy policy.

Even if the 40% target were achievable it would still leave a significant shortfall in current capacity. The Executive therefore needs to take a realistic view of other generating capacity. UNISON Scotland would urge the Executive to adopt the balanced generating policy set out above. In particular to support investment in clean coal technologies, which will extend the life of Scotland's coal fired power stations.

New conventional capacity cannot simply be switched on overnight. It should also be remembered that renewable energy does not provide constant base load capacity, it would therefore in our opinion be a very high-risk strategy to rely largely on unproven renewable technologies.

UNISON agrees that there are substantial economic benefits to Scotland in pursuing a renewables strategy. However, currently the numbers in manufacturing are small and the operations of renewable energy facilities are not labour intensive. It is important therefore for the

Scottish Executive to maintain consistent support post-2010 to ensure business confidence and the continued creation of skilled jobs in the longer term.

UNISON Scotland believes the time has come to call a halt and bring some sanity back to Scotland's energy structures. Liberalised and competitive markets are not the panacea that some in government believes it to be. It is the belief of UNISON Scotland that we need a planned energy policy that provides safe, secure and sustainable generation, which contributes to the economic future of Scotland and eliminates fuel poverty.

For Further Information Please Contact:

Matt Smith, Scottish Secretary
UNISON Scotland
UNISON House
14, West Campbell Street,
Glasgow
G2 6RX

Tel: 0141-332 0006
Fax: 0141 342 2835

e-mail:matt.smith@unison.co.uk

 

 

 

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