Climate change monitoring report 2023

Climate Change Plan Monitoring Report 2023: Electricity

Part A - Overview of sector

The 2020 annual emissions envelope published in the 2018 CCPu for this sector was for 1.7 MtCO₂e^[4], whereas the outturn emission statistics for this year (published in June 2021) show a position of 1.7 MtCO₂e. On the basis of comparing these figures, the sector was within its envelope in 2020.

The CCPu sets out the following three policy outcomes for this sector, the indicators for which are summarised below:

The electricity system will be powered by a high penetration of renewables, aided by a range of flexible and responsive technologies.	On Track	Off Track	Too Early to Say
Electricity grid intensity (CO2e per kilowatt hour)	X
Installed capacity of renewable generation (GW)	X
Renewable capacity at planning stages (GW: 3 categories)	X

Scotland’s energy supply is secure and flexible, with a system robust against fluctuations and interruptions to supply.	On Track	Off Track	Too Early to Say
Loss of Load Expectation (hours per year)	X

Scotland secures maximum economic benefit from the continued investment and growth in electricity generation capacity and support for the new and innovative technologies which will deliver our decarbonisation goals.

There are no indicators for this policy outcome. More information is provided in Part C.

Just transition and cross economy impacts

We wish to understand and report on the broader just transition and cross-economy impacts of our emissions-reduction activities in addition to these sector specific policy outcomes and indicators. To do this, in this report we use data from the Office of National Statistics (ONS): Low Carbon Renewable Energy Economy (LCREE) publication. The LCREE data presented in this report is based on survey data of businesses which perform economic activities that deliver goods and services that are likely to help generate lower emissions of greenhouse gases, for example low carbon electricity, low emission vehicles and low carbon services.

The LCREE indicator is narrowly defined and, while useful within its limited scope, does not give us the full picture of the impacts on workforce, employers and communities and progress towards a just transition.

Over the next few years we will work to develop a more meaningful set of success outcomes and indicators aimed at tracking the impacts of our policies on a just transition to net zero.

Sector commentary on progress

Scotland has made significant progress decarbonising the electricity sector, and has maintained an electricity grid intensity of below 50 gCO₂e/kWh for the years 2017- 2020. The overall downward trend from a carbon intensity of 320 gCO₂e/kWh in 2010, is chiefly the result of the closure of two coal fired power stations in 2013 and 2016, as well as reduced reliance on gas for power generation.

The Scottish Government has set an ambition of up to 12 GW of additional onshore wind capacity by 2030, as set out in our Onshore Wind Policy Statement published December 2022. We are also consulting on setting solar and tidal & wave energy deployment ambitions as part of our final Energy Strategy and Just Transition Plan (ESJTP).

The ScotWind Offshore Wind Leasing Round resulted in a developer ambition of delivering 27.6 GW of offshore wind generating capacity across 20 projects, which if approved, would deliver far in excess of our current planning assumption of 10 GW of offshore wind. ScotWind is by far the world’s largest commercial round for floating offshore wind and breaks new ground in putting large-scale floating wind technology on the map at GW scale. In light of the market ambition expressed in the ScotWind leasing round, we are consulting on increasing our existing ambition of 8 – 11 GW of offshore wind by 2030 through the draft ESJTP, as well as setting an ambition by 2045.

On 24 March 2023, 13 projects were offered Exclusivity Agreements in the Innovation and Targeted Oil and Gas (INTOG) leasing round. Exclusivity Agreements will cover projects with a proposed capacity of up to 499 MW for IN and 5 GW for TOG. This milestone in the INTOG leasing round is the next step in realising another world leading opportunity for Scotland’s energy transition: helping both decarbonise our existing oil and gas operations while helping our offshore wind sector to expand, innovate and deliver on our ambition to be a renewables powerhouse.

The Scottish Government is also committed to reviewing its energy consenting processes and to continuing efforts to ensure a sustainable security of electricity supply. Significant powers required to decarbonise electricity in Scotland remain reserved to the UK Government. In particular, the Scottish Government is calling for a reform to the Contract for Difference mechanism and to transmission charging. To modernise and accelerate consenting of electricity infrastructure, we are also seeking further powers from the UK Government.

Developments in monitoring arrangements since last report

N/A

Part B – Progress to policy outcome indicators

Policy Outcome: Cross-sectoral social and economic

Indicator: FTE employment in Low Carbon Renewable Energy Economy Indicator

On-Track Assessment (Milestones/Targets): Year-to-year change

Most Recent Data: 2021

Data Source(s): Office of National Statistics: Low Carbon Renewable Energy Economy (LCREE), Time spent of Green Tasks

Assessment: Too Early to Say

Commentary:

• In 2021, the Scottish low carbon renewable energy (LCREE) sectors were estimated to provide 28,300 jobs, the highest in the published data.
• The estimates of LCREE are based on a relatively small sample of businesses and hence are subject to a wide confidence interval. Scottish LCREE employment in 2021 is substantially higher than previous years but the difference is not statistically higher than 2020.

• LCREE only shows employment in roles in industries directly involved in the transition to net zero.
• The ONS also released experimental statistics on a wider perspective of green activity in the economy with their time spent on green tasks release.
• These stats reflect green activities in both LCREE and non-LCREE sectors. The 2023 data have not yet been published.
• Last year’s publication showed that in 2019 Scotland achieved an all-time high of hours spent on green tasks and proportion of workers doing green tasks, including workers who spend more than 20% of their time on green tasks.
• The proportion of workers doing green tasks in Scotland was 36% in 2019, up from 23.8% in 2004. Workers who have spent more than 20% of their time doing green tasks was 14%, up from 9% in 2004.
• The proportion of overall hours spend doing green tasks in Scotland was 7%, up from 4.9% in 2004.

Policy Outcome: 1

Indicator: Electricity grid intensity (CO₂e per kilowatt hour)

On-Track Assessment (Milestones/Targets): Maintain below 50g CO₂e per kilowatt hour

Most recent data: 2020

Data source(s): DESNZ Energy Trends, Scottish Greenhouse Gas Statistics

Assessment: On Track

Commentary:

• Scottish Grid emissions are calculated by taking emissions from the electricity sector divided by total electricity generated.
• Scotland has maintained an electricity grid intensity of below 50 gCO₂e/kWh since 2017.
• 2020 saw grid emissions fall on 2019 levels from 41 to 34 gCO₂e/kWh.
• The overall downward trend observed from a carbon intensity of 320 gCO₂e/kWh in 2010, is chiefly a result of the closures of Cockenzie and Longannet coal fired power stations in 2013 and 2016 respectively, as well as a reduced reliance on gas for power generation.
• With the closure of Hunterston B Nuclear power station in 2022, Scotland now has just one nuclear power plant left at Torness that is due to close in 2028.
• Emissions from power generation are now concentrated in one large gas fired power plant at Peterhead and a handful of small sites across the country, primarily on the Islands.
• Our expectation is that with an increased penetration of renewables, and no planned expansion of unabated fossil fuel power generation, Scottish grid intensity will remain consistently below 50 gCO₂e/kWh in the future.

Policy Outcome: 1

Indicator: Installed capacity of renewable generation (GW)

On-Track Assessment (Milestones/ Targets): Year-to-year change

Most recent data: Q3 2022

Data source(s): DESNZ Energy trends, DESNZ Renewable Energy Planning Database (REPD)

Assessment: On Track

Commentary:

• Scotland had 13.6 GW of installed renewable electricity generation capacity operational in 2022 Q3.
• The bulk of this capacity (8.8 GW) is onshore wind with the next largest capacity coming from offshore wind (2.1 GW) which has overtaken large hydro in terms of capacity since the 2022 monitoring report.
• Offshore wind has grown from 0.2 GW in 2017 to 2.1 GW in 2022 Q3. This is expected to rise considerably in the 2020s and 2030s with developer ambitions of almost 28 GW of offshore wind capacity across the 20 ScotWind projects successful in the leasing round.
• From the 2015 baseline total renewable capacity has grown by around 78% to 2022 Q3.
• The capacity of other renewable technologies has also risen. Solar capacity has increased almost 90% from 2015 from 264 MW to 411 MW.
• The largest share of solar capacity is from sites of 50 MW or greater, which make up around 46% of total solar capacity. Smaller sites less than 5 MW make up around 20% of capacity. These small projects could provide an important contribution to the development of smart, decentralised and local energy markets in Scotland.

Policy Outcome: 1

Indicator: Renewable capacity at planning stages (GW: 3 categories)

On-track Assessment (Milestones/Targets): Year-to-year change

Most recent data: 2022 Q3

Data source(s): DESNZ renewable Energy Planning Database (REPD)

Assessment: On track

Commentary:

• Total Renewable capacity in the pipeline for Scotland was around 17.1 GW in 2022 Q3.
• There are 397 projects in the pipeline in Scotland. The majority of these projects are onshore wind farms which make up around 55% of projects and 66% of capacity (11.2GW).
• After wind, bioenergy and solar are the next biggest contributors to capacity with 501 MW and 317 MW respectively.
• Pipeline estimates do not include all of the potential 28GW of offshore wind that the ScotWind leasing round, or INTOG, could add. This is due to projects not yet being included in the REPD, which is used for calculating pipeline capacity, as these projects are still subject to planning and consenting decisions.
• Total renewable capacity in the pipeline in Scotland has fluctuated between 10 GW and 17 GW for the past decade.
• Of the total capacity of 17.1 GW, 3.4 GW is under construction, most of which are offshore wind farms in the Moray firth. 6.8 GW are awaiting construction and 6.9 GW in planning.
• Were all capacity in the pipeline to be delivered it would more than double the level currently deployed, and could generate an estimated 40.3 TWh of renewable electricity per year. However, there are a number of factors that may mean that projects in planning and consented may not progress to commissioning.

Policy Outcome: 1

Indicator: Loss of Load Expectation (hours per year)

On-track Assessment (Milestones/Targets): Maintain GB standard below 3 hours per year

Most recent data: October 2022

Data source(s): National Grid Winter Outlook

Assessment: On Track

Commentary:

• Loss of Load Expectation (LOLE) is a measure of security of supply of the GB electricity system. This is measured through the number of probability projected hours of a year in which demand could exceed supply, and which would require measures be taken by National Grid Electricity System Operator.
• Given the ongoing conflict in Ukraine, National Grid Electricity System Operator (ESO) modelled several different demand and supply scenarios to assess the GBs Security of Supply going into Winter 22/23.
• Their modelling indicates that across the scenarios the GB grid should remain within the GB standard of 3 hours LOLE per year.

Part C - Information on implementation of individual policies

Outcome 1: The electricity system will be powered by a high penetration of renewables, aided by a range of flexible and responsive technologies

Policy

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

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

Onshore Wind: In December 2022 SG published its final onshore wind policy statement setting an ambition of 20 GW of onshore wind by 2030. SG continues to maintain its focus on tackling barriers to deployment- such as aircraft and seismological radar issues - working in partnership with the industry and other stakeholders through our recently established onshore wind strategic leadership group. The onshore wind strategic leadership group will focus on the development of an onshore wind sector deal. This will form the basis of a commitment between industry and SG to enable the delivery of the 20 GW ambition, whilst ensuring maximum benefits to the people of Scotland.

Offshore Wind: In January 2022, CES announced the winners of the ScotWind leasing round. The developer ambitions for ScotWind add up to almost 28 GW of offshore wind across 20 projects. A further offshore wind leasing round, Innovation and Targeted Oil and Gas (INTOG) is currently in progress in Scottish waters. This leasing round is designed to enable development of projects that will specifically deliver green energy to oil and gas installations, and to test new technology or solutions in Scottish waters.

In light of the new market ambitions, we are consulting on updating our ambition of 8 – 11 GW of offshore wind by 2030 through the draft ESJTP. We are also seeking views on establishing a new ambition for deployment by 2045.

We are continuing to work with UKG and the offshore wind industry through the Scottish Offshore Wind Energy Council (SOWEC) to tackle barriers to deployment.

Solar: Solar power has an important role in continuing to decarbonise our heat and electricity supply. Our draft ESJTP set out a vision for the future of solar in Scotland and requested stakeholder views on whether a deployment ambition for solar should be set. We expect a final solar vision to be published as part of the final ESJTP. Solar projects are also supported through a range of Scottish Government funding programmes; including Home Energy Scotland / the SME Loan Fund & the Community and Renewable Energy Scheme (CARES).

Hydro: Scotland has a proud history of hydro power and it has the potential to play a significantly greater role in the energy transition.

We will continue to advocate for the UK Government to provide a proper support mechanism for the further development of hydro projects through a cap and floor regime.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Onshore wind – sector deal in 2023.

Offshore wind – consulting on revised offshore ambitions in the draft ESJTP

INTOG exclusivity agreements offered in April 2023.

Solar – final solar vision as part of final ESJTP.

Policy

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.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

Network charging and access is an area of policy reserved to the UK Government.

The Scottish Government continues to make the case to Ofgem and the UK Government for a change to the transmission charging methodology and for assurances that charging and access rights create a level playing field that will support both an accelerated transition to net zero and protect consumers.

The Scottish Government is engaging in a number of different ways in relation to these complex policies including:

• Responding to the UK Government’s REMA consultation in October 2022. We continue to engage with the UK Government and Ofgem to ensure Scotland’s needs and interests are represented in wholesale electricity market reform.
• Supporting the work of Ofgem’s Transmission Network Use of System (TNUoS) Charges taskforce.

Engaging with the ESO, Ofgem and the UK Government regularly to make clear what is needed to support further renewables deployment in Scotland and consumers in Scotland.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing, though the powers in this space are largely reserved to the UK Government.

Policy

Publish a revised and updated Energy Strategy, reflecting our commitment to net zero and key decisions on the pathways to take us there.

Date announced

March 2020

Progress on implementation since time of last report / CCPu

The Scottish Government published its draft ESJTP on 10 January 2023, and the ESJTP will be open for consultation until 9 May 2023. The final ESJTP will be published in due course.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The final ESJTP will be published once we have conducted a thorough review of the consultation responses and engaged with the full range of stakeholders.

Policy

Develop and publish a Hydrogen Policy Statement by the end of 2020, followed by a Hydrogen Action Plan during 2021.

Date announced

2020/21 PfG

Progress on implementation since time of last report / CCPu

Hydrogen Policy Statement published November 2020. Draft Hydrogen Action Plan published November 2021. Finalised Hydrogen Action Plan published in 2022.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing implementation of the Hydrogen Action Plan to support the development of the hydrogen economy to meet an ambition of 5 GW of renewable and low carbon hydrogen production capacity by 2030.

SG will ensure the regulatory / planning / consenting framework for renewable energy & hydrogen developments support the scale -up of hydrogen going forwards.

We will also ensure our ambitions for onshore/offshore wind development in Scotland support our 5 GW by 2030 hydrogen ambition.

Work will continue to build on our evidence base understanding the extent of the role hydrogen is likely to play in both domestic / global markets.

Policy

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

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

In 2020 Scotland, total renewable energy met the equivalent of 26.7% of total nationwide consumption. (This is an increase of 2.7 percentage points since 2019; when the figure stood at 24.0%)

This rise is largely attributable to greater renewable electricity generation. Around 1,800 GWh extra renewable electricity was generated between 2019 – 2020 – much of this as a result of increased wind generation.

In 2020:

• The amount of electricity generated in Scotland from renewable sources was the equivalent of 21.9% of total energy consumption.
• The amount of heat generated in Scotland from renewable sources was the equivalent of 3.4% of total energy consumption.
• The amount of energy from renewable sources used by transport was the equivalent of 1.3% of total energy consumption.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing

Policy

Introduce a new framework of support for energy technology innovation, delivering a step change in emerging technologies funding to support the innovation and commercialisation of renewable energy generation, storage and supply.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

SG established the Scottish Marine Energy Industry Working Group as a forum for the sector to speak with one voice about its priorities and the steps needed to maintain Scotland’s competitive advantage. The group was reconvened to produce a suite of papers on the key opportunities, barriers and collective actions needed to build on the sectors achievements to date. Published January 2023 the papers include several industry recommendations for consideration.

These recommendations helped to shape and develop an outline marine ‘vision’ for the future of marine in Scotland which was published in the draft ESJTP.

The draft also includes questions about the introduction of a new level of ambition for marine energy and potential near-term action to achieve those aims.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The current consultation of the ESJTP provides an opportunity to engage further with the sector and to develop our strategic approach to marine energy.

We expect a final marine vision to be published as part of the final ESJTP.

SG will continue to support the Wave Energy Scotland programme, which runs from 2022-26, as it drives further innovation and international collaboration, and prepares for the larger-scale demonstration of wave energy technology in Scotland.

Policy

Renewed focus on developing local energy projects and models, including through CARES, supporting the achievement of 2 GW of renewable energy being in Local Community ownership by 2030.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

Local and community energy projects and models continue to be supported through the Scottish Government CARES Programme.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Annual report on Community and Locally Owned Energy in Scotland, produced by EST through the CARES contract on SG’s behalf (which monitors progress toward targets).

As of December 2021, an estimated 896 MW of community and locally owned renewable energy capacity was operational in Scotland.

This represents 45% progress towards the 2030 target.

Timeframe and expected next steps

A new CARES contract began in 2021, and runs until 2025, which has an increasing focus on heat decarbonisation. Support such as the Community Buildings Fund and Community Heat Development Programme were launched in 2022 and will run until the end of the contract, subject to funding availability.

Policy

We will carry out detailed research, development and analysis during 2021 to improve our understanding of the potential to deliver negative emissions from the electricity sector.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Research has been undertaken to better understand the potential for negative emissions technologies in Scotland. See NETs chapter.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

See NETs chapter

Timeframe and expected next steps

Ongoing.

Policy

We will continue to review our energy consenting processes, making further improvements and efficiencies where possible, and seeking to reduce determination timescales for complex electricity generation and network infrastructure applications.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The Scottish Government’s Energy Consents Unit continues to ensure a fully resourced unit, which will deliver efficiencies on determination timescales following the implementation of increased application fee regulations. The officers within the Energy Consents Unit continue to receive training- from internal / external resources in relation to key aspects of assessment and decision-making. External stakeholder engagement has taken place to explore mechanisms to accelerate determination timescales.

The Scottish Government is calling for regulatory changes by the UK Government to allow the grid onshore consenting process to be reformed, to accelerate timescales.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

SG and stakeholders continue to work together and implement actions to accelerate determination timescales for electricity generation and network infrastructure applications.

Timeframe and expected next steps

Energy Consents Unit is reviewing its current processes and engaging with planning authorities and statutory consultees with the aim of streamlining processes. Energy Consents Unit is undertaking further work on standardisation of consent conditions.

Policy

We will deliver the actions from our Offshore Wind Policy Statement, published in 2020. These actions, ranging from support for supply chain, planning, innovation and skills, will support the development of between 8 and 11 GW off offshore wind capacity by 2030.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The results of the ScotWind offshore wind seabed leasing process were announced on 17 January 2022. The combined ambition of ScotWind projects is almost 28 GW of generating capacity. The planning and consenting processes that lie ahead means it is not possible to know now exactly what scale of development will be permitted ultimately. However, we are seeking to maximise the opportunities from ScotWind and deliver on the ambition set out in the Offshore Wind Policy Statement. We recognise that the ambition set out in the OWPS needs to be reviewed in light of the market ambition expressed in response to the ScotWind leasing round.

We are using the draft ESJTP to consult on increasing this ambition, and we are also consulting on establishing a 2045 ambition for offshore wind in Scotland.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing

Policy

Accelerate our work with aviation, energy and other stakeholders to ensure that all radars are wind turbine tolerant/neutral during the coming decade

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The finalised Onshore Wind Policy statement was published in December 2022. The Onshore Wind Aviation Radar Delivery 2030 group (OnWARD 2030) has now been formed, led by RenewableUK, and formed at the request of the DESNZ led Aviation Management Board.

The aim of this group is to create a more collaborative and strategic relationship between the aviation & renewables industries; delivering mutual benefit and allowing for strategic solutions to barriers for deployment.

The SG has maintained continuous official level representation on the Air Defence and Offshore Wind Programme Board, part of the OWIC Aviation and Radar workstream, in order to maintain engagement and seek solutions for defence and civil radar issues to co-ordinate and oversee delivery of the mitigation of impacts.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

OnWARD 2030 meets monthly and feeds into the UKG led Aviation Management Board. The Scottish Government is an active member of both of these groups.

Timeframe and expected next steps

To follow up with RUK group ‘ONWARD’ as their membership and workplan develops.

Offshore wind – ongoing.

Policy

Review and publish an updated Electricity Generation Policy Statement ahead of the next CCP.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The draft ESJTP sets out a strategic vision for the future of the electricity sector in Scotland and actions to deliver that.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The final ESJTP will provide further detail on the future of Scotland’s electricity sector.

Outcome 2: Scotland’s electricity supply is secure and flexible, with a system robust against fluctuations and interruptions to supply

Policy

Support the development of technologies which can deliver sustainable security of supply to the electricity sector in Scotland and ensure that Scottish generators and flexibility providers can access revenue streams to support investments

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The Scottish Government continues to engage with Ofgem / Department for Energy Security & Net Zero on the need for support for long duration energy storage.

The Scottish Government provided £550,000 of match funding (through the Low Carbon Infrastructure Transition Programme) to support demonstration of wind energy providing services (including frequency response and black start) at the Dersalloch Wind Farm in Ayrshire.

This is the first example in the world of a commercial wind farm demonstration black start, and it highlights opportunities to operate the electricity system in line with net zero ambitions.

The Cabinet Secretary opened Statkrafts Greener Grid Park in Moray, which will provide balancing services to National Grid and reduce reliance on gas.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

We continue to press the UK Government on plans to support long duration energy storage.

We continue to engage with ESO to apply lessons learned from Dersalloch.

Policy

Press the UK

Government for market mechanisms and incentives which recognise locational value, both for energy and for security of supply, and which do not create undue barriers for investment in Scotland.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

National Grid ESO has set a target to be able to operate a net zero system by 2045. This will require new market mechanisms that support net zero technologies.

The Scottish Government has responded to the UK Government’s initial consultation on the Review of Electricity Market Arrangements (REMA) recognising the importance this work could have on the ability to deploy further renewable energy projects in Scotland.

The Scottish Government continues to make the case to Ofgem and DESNZ for a change to the transmission charging methodology and for assurances that charging and access rights create a level playing field that will support both an accelerated transition to net zero and protect consumers.

The SG engages with the ESO, Ofgem and the UK Government regularly to make clear what is needed to support further renewables deployment in Scotland and consumers in Scotland.

We continue to press the UK Government to maintain the Contracts for Difference (CfD) mechanism in a manner that captures economic benefits for Scottish and UK supply chains.

We continue to lobby the UK Government to provide a proper support mechanism for the further development of hydro projects through a cap and floor regime.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Engage with Ofgem’s strategic review of network charges.

Continue to input to the UK Government’s work relating to REMA.

Engaged with UKG on any changes related to CfD or introduction of support for long duration energy storage.

Policy

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

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

Continue to lobby the UK Government to provide an appropriate support mechanism for the further development of hydro projects through a cap and floor regime.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Continue to engage with UKG on any changes related to CfD or introduction of support for long duration energy storage.

Policy

Work with all parties to secure maximum benefits from the move towards smarter and more flexible electricity systems and networks, as set out in the UK Smart Systems and Flexibility Plan (2017).

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

In 2022 SG engaged with the Distribution Network Operators (DNOs) to support the development of the electricity distribution price control (Revenue = Incentives + Innovation + Outputs. ED2 stands for: Electricity Distribution 2. RIIO ED2) business plans. This led to a fair RIIO ED2 outcome for the DNOs and consumers which can support the network investment necessary to meet SG decarbonisation goals.

The SG has established a new forum to enable developers to directly communicate any concerns with the DNOs through a local electricity network engagement group. This will identify consider and address overlapping, and strategic issues and opportunities related to the decarbonisation of heat and transport.

In 2022 research was taken forward to understand the impact of heat decarbonisation on the electricity networks.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Ongoing.

Policy

Encourage and support increased interconnection which can enhance Scottish system security while considering effects on domestic capacity and investment.

Date announced

CCP 2018

Progress on implementation since time of last report / CCPu

We have established a Major Energy Network Projects Group (MEPG) – which brings together Scottish Government energy policy / planning & consents unit officials / Scotland’s transmission network owners / the electricity system operator / key stakeholders.

The Group’s key purpose is to maintain a focus on the progress of major electricity transmission projects, while widening its focus to other major energy network projects / developments as required.

Shetland cable is underway.

Orkney ‘Needs Case’ was provisionally approved by Ofgem in March 2023.

Western Isles ‘Needs Case’ – was approved.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Quarterly meetings of the MEPG

Policy

Launch a call in 2021 for evidence and views on technologies that can transform our electricity system, including energy storage, smart grid technologies, and technologies to deliver sustainable security of supply. This will help ensure that our funding and interventions support world leading activity in Scottish based companies.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Requirement for a call for evidence has been superseded by research commissioned into security of supply and the consultation process that is being undertaken as part of the draft Energy Strategy and Just Transitions plan.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

Final ESJTP to be published in due course, once we have conducted a thorough review of the consultation response and engaged with the full range of stakeholders.

Security of supply report to be published in due course.

Policy

Develop a series of whole system energy scenarios to guide infrastructure investment decisions for Scotland.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Energy Systems Catapult have produced a comprehensive set of Scotland-specific whole energy system scenarios providing options to reach the 2030 and 2045 energy system targets.

These scenarios are not exclusive pathways to net zero, nor are they ‘preferred options’. They provide important insights to inform discussions on the trade-offs needed to meet statutory targets.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

N/A

Timeframe and expected next steps

The final report was published in September 2022. Scottish whole energy system scenarios (climatexchange.org.uk)

Policy

Ensure that sustainable security of electricity supply is included as a priority within future Scottish Government energy innovation funding programmes.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

Scottish Government provided £550,000 of match funding through the Low Carbon Infrastructure Transition Programme to support demonstration of wind energy providing services including frequency response and black start, at the Dersalloch wind farm in Ayrshire.

This is the first example in the world of a commercial wind farm demonstration black start and it highlights opportunities to operate the electricity system in line with net zero ambitions.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

National Grid ESO is working with industry to apply lessons learned from Dersalloch.

Timeframe and expected next steps

Ongoing

Outcome 3: Scotland secures maximum economic benefit from the continued investment and growth in electricity generation capacity and support for the new and innovative technologies which will deliver our decarbonisation goals.

Policy

Press the UK

Government to further reform and maintain the CfD mechanism in a manner which better captures the economic benefits and total value added for the Scottish and UK supply chains.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

The SG continues to press the UK Government to maintain the CfD mechanism in a manner that captures economic benefits for Scottish and UK supply chains.

This included responding to the UK Government consultation which proposed changes to various elements of the CfD regime in February 2023.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

UKG confirmed that annual auctions will take place.

The process for Supply Chain Plans has been strengthened since consultation in 2021.

Timeframe and expected next steps

CfD AR5 to open end of March 2023

Policy

Introduce new requirements for developers to include supply chain commitments when applying to the ScotWind leasing process run by Crown Estate Scotland.

Date announced

CCPu 2020

Progress on implementation since time of last report / CCPu

We will use every lever within our devolved competence to support & grow the offshore wind supply chain here in Scotland.

Each ScotWind applicant was required to include a Supply Chain Development Statement (SCDS) setting out its supply-chain goals, & committing the developers to meeting these through various stages of their projects.

Failures to deliver on commitments will trigger remedies ranging from financial penalties to an inability to progress to a seabed lease.

This has produced a leasing round focused on quality & deliverability of bids, and the long term prize of supply chain investment – which promises to transform the Scottish economy in coming decades.

SCDS are also a requirement for the INTOG leasing round, currently in progress.

Have any implementation indicators / milestones been set for this policy? If so, most recent data for progress against these.

Developers have committed to investing an average of £1.4bn in the Scottish supply chain for per project, amounting to a potential of £28bn of investment into the Scottish supply chain.

Timeframe and expected next steps

We see these statements as the expectation of what the bid winners will deliver for Scotland.

Long standing project, as it will take some time to get everything in motion.