‘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
