Climate Change Plan: monitoring reports - 2021 compendium

Chapter 1: Electricity

Part A - Overview of sector

The 2018 annual emissions envelope published in the 2018 Climate Change Plan^[1] for this sector was for 2.7 MtCO2e, whereas the outturn emission statistics for this year (published in June 2020) show a position of 2.2 MtCO2e. On the basis of comparing these figures, the sector was within its envelope in 2018. However, it should be noted that the historical GHG inventory for the period 1990-2018 was subject to technical revisions since the time of development of the 2018 Plan, which places some limitations on the extent to which these figures can be directly compared.

The updated Plan 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, we use data from the Office of National Statistics: Low Carbon Renewable Energy Economy (LCREE) publication.

The LCREE 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 meaningful set of success outcomes and indicators which can improve our ability to track the impacts of our policies on a just transition to net zero and a wellbeing economy.

Sector commentary on progress:

• Scotland's electricity system continues to evolve and is making the transition from a traditional centralised model, reliant on fossil fuels, to a decentralised model, with a more diverse electricity generation mix incorporating large volumes of renewable and other low carbon sources of electricity.
• Efforts to decarbonise the electricity sector will need to be stepped up in the face of Scotland's new Net Zero commitment, with sharp rise in capacity expected to be necessary in order to reach the target and to help drive decarbonisation across other sectors.
• Latest figures show Scotland has already reached the target of having an electricity grid intensity below 50 gCO2 per kilowatt hour, with the 2018 figure showing a grid intensity of 44 gCO2/kWh.
• Renewable electricity generation capacity in Scotland has more than trebled in the last ten years; as of September 2020, there was 11.9 GW of installed capacity across the country. Consequently, renewables' contribution towards the total volume of electricity generated has grown from 18.5% in 2008 to 61.1% in 2019.
• There is also currently an additional 14 GW of renewables capacity either under construction or at the planning stage, the majority of which is from wind generation. This indicates a strong pipeline, and a substantial level of capacity which could be added to the system in the future.

Developments in monitoring arrangements since CCPu / last report:

The CCPu retains the two policy outcomes from the previous monitoring report, and continues the outcome indicator Electricity grid intensity (CO2e per kilowatt hour) from the previous monitoring report, while introducing the following new outcome indicators: Installed capacity of renewable generation, Renewable capacity at planning stages and Loss of load expectation.

Part B - Progress to Policy Outcome Indicators

Policy Outcome: Cross-sectoral social and economic indicator

Indicator: FTE employment in Low Carbon Renewable Energy Economy

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

Most recent data: 2018

Data source(s): Office of National Statistics: Low Carbon Renewable Energy Economy (LCREE)

Assessment: Too early to say²

Commentary:

• In 2018, Scottish low carbon and renewable energy (LCREE) sector was estimated to directly provide 23,100 full time equivalent (FTE) jobs
• The LCREE estimates are based on a relatively small sample of businesses and hence are subject to fairly wide confidence intervals. LCREE employment in Scotland in 2018 is similar to previous years and not statistically significantly different to 2017.

Source: ONS

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: 2018

Data source(s): BEIS Energy Trends; Scottish Government Greenhouse Gas Emissions

Assessment: On track

Commentary:

• Electricity grid intensity in Scotland rose from 23.8 gCO2/kWh in 2017 to 44.1 gCO2/kWh in 2018 but remains below 50 gCO2/kWh for a second year running.
• This rise was due to an increase in gas fired power generation, to compensate for long-term outages at one of Scotland's two nuclear power stations.
• The overall downward trend from a carbon intensity of 320gCO2e/kWh in 2010, is chiefly the result of the closure of Cockenzie and Longannet coal fired power stations in 2013 and 2016, as well as a reduced reliance on gas for power generation. This has significantly reduced the use of fossil fuels for electricity generation.
• Emissions from power generation are now concentrated in one large gas power plant, and a handful of smaller gas power stations across the country. This, combined with our expectation that the fleet of renewables will continue to grow, gives us confidence that grid intensity will be maintained at 50gCO2/kWh or below.

Source: BEIS, SG

Policy

Outcome: 1

Indicator: Installed capacity of renewable generation (GW)

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

Most recent data: Quarter 4 2020

Data source(s): BEIS Energy Trends

Assessment: On Track

Commentary:

• Scotland had 11.9 GW of installed renewable electricity generation capacity operational in December 2020.
• The bulk of Scottish renewable generation capacity as of 2020 is still onshore wind, at 8.5 GW of operational capacity. Offshore wind has grown since 2017, increasing from 0.18 GW to approximately 0.9 GW in 2020.
• Total renewable capacity in Scotland has remained steady for the last two years, although it has grown by approximately 15% from the start of 2018, to most recent data in Q4 2020.
• Other renewable technologies have also grown in recent years, since the start of 2018, solar photovoltaic generation has increased 19% to 0.37GW, and bioenergy has grown 12% to 0.5GW.
• Half of the renewable capacity in Scotland comes from large installations of over 50 MW (6.2 GW in total), while 1.3 GW comes from small-scale installations of less than 5 MW. These projects provide an important contribution and could contribute to the development of smart, decentralised and local energy markets in Scotland.

Source: BEIS

Policy Outcome: 1

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

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

Most recent data: Quarter 4 2020

Data source(s): BEIS Renewable Energy Planning Database

Assessment: On track

Commentary:

• Total renewable capacity in the pipeline for Scotland has consistently fluctuated between 10 GW and 15 GW for the past decade. In Q4 2020, the total pipeline capacity for Scotland is on the higher end of this range, at 14.0 GW total, and 286 projects.
• Of this pipeline capacity: 2 GW is under construction, most of which is offshore wind farms off the Moray Firth; 7.7 GW is awaiting construction; and 4.3 GW is in planning stages of development.
• Of the current pipeline renewable capacity, the two largest technologies present are onshore and offshore wind, with pipeline capacity of 8.9GW and 4.2GW respectively. There are 187 onshore wind projects and 12 offshore wind projects in development in Scotland. Of this pipeline capacity for onshore wind, only 5% is currently under construction, whereas for offshore wind, 35% is currently under construction.
• The remaining pipeline capacity of approximately 0.9GW comprises other renewable technology projects, the largest portion of this is solar photovoltaics, and wave/tidal generation, both at approximately 0.35GW of pipeline capacity.
• Were all capacity in the pipeline to be delivered it would more than double the level currently deployed, and could generate an estimated 33.5 TWh of renewable electricity.

Source: BEIS

Policy Outcome: 2

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 2020

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 in 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 System Operator.
• Current projections from the National Grid Winter Outlook indicate that the LOLE expected in the grid system over 2020/21 is <0.1 hours/year in the base case.
• The LOLE is therefore projected to remain well below its target of 3 hours per year.
• Under high and low demand reference scenarios, the LOLE projection is still within targets, at 0.3 hours/year in the high demand scenario, and <0.1 hours/year in both the base case and low scenario.

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Maintained

Progress on implementation since time of last report / CCPu:

SG continues to maintain its focus on tackling barriers to development, such as aircraft and seismological radar issues, working in partnership with the industry and other stakeholders.

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:

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Maintained

Progress on implementation since time of last report / CCPu:

SG continues to engage with the relevant regulatory processes and to press for outcomes and reforms consistent with the development of Scotland's renewables resource and our Net Zero target.

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:

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

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Boosted [March 2020]

Progress on implementation since time of last report / CCPu:

SG has announced its intention to update Scotland's Energy Strategy, with work due to commence later in 2021.

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:

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

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Boosted [2020-2021 PfG]

Progress on implementation since time of last report / CCPu:

HPS published in December 2020, with work on Hydrogen Action Plan now underway.

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:

Publication of the Hydrogen policy Statement is completed. The development of the Hydrogen Action plan is ongoing

Policy:

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

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Maintained

Progress on implementation since time of last report / CCPu:

Total Scottish energy consumption powered by renewables was 24% in 2018.

The latest statistics show that the growth in renewable generation capacity slowed over the last 2 years (2019-2021), however renewable generation levels remain strong. So although the rate of progress on this indicator may slow down, we anticipate an uptick when renewables pipeline capacity, particularly offshore wind, starts to commission in the early-mid 2020s

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

Progress made with this indicators to date shows that in 2018 Scotland was almost halfway towards meeting the 50% target.

Timeframe and expected next steps:

N/A

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

SG continues to support energy technology innovation. Since the publication of the Climate Change Plan update, our globally recognised Wave Energy Scotland programme has successfully secured Horizon 2020 funding to lead EuropeWave, a technology development programme for the wave energy sector in partnership with the Basque Energy Agency. We have also committed further three years of funding for our Energy Technology PhD studentship programme.

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 will launch a call for evidence later this year inviting views on energy technology development opportunities.

Policy:

Renewed focus on developing local energy projects and models, including through CARES, supporting the achievement of 1GW and 2GW of renewable energy being in Local Community ownership by 2020 and 2030.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Maintained

Progress on implementation since time of last report / CCPu:

As of December 2020, an estimated 853 MW of community and locally owned renewable energy capacity was operational in Scotland. This represents 85.3% progress towards the 2020 target and 42.6% progress toward the 2030 target

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 CARES Contract on SG behalf which monitors progress toward targets.

Timeframe and expected next steps:

Ongoing

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

This is underway.

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:

N/A

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

SG continues to work with stakeholders to identify where possible further improvements can be made to reduce determination timescales.

The average time taken to determine an Electricity Act wind farm application has improved over the last two years from 51 months in 2018 to 26 months in 2020.

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

Ongoing

Timeframe and expected next steps:

Ongoing

Policy:

We will deliver the actions from our Offshore Wind Policy Statement, published in October. 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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

The Scottish Offshore Wind Energy Council (SOWEC) has created 5 workstreams to take forward the actions identified in the OWPS

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

Ongoing

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Boosted [CCPu 2020]

Progress on implementation since time of last report / CCPu:SG continues to work with the sector on these issues through the Ministerially chaired Aviation 2030 Group.

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

Ongoing

Timeframe and expected next steps:

Ongoing

Policy:

Review and publish an updated Electricity Generation Policy Statement ahead of the next Climate Change Plan.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

Work on this will take place in the context of the Energy Strategy update, with further details to follow.

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

Ongoing

Timeframe and expected next steps:

Ongoing

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

We will continue to work with energy sector stakeholders and assess options for building on recent and successful innovation support in this area, as well as to identify and support wider policy changes in reserved areas which could deliver these outcomes.

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

Ongoing

Timeframe and expected next steps:

Ongoing

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Maintained

Progress on implementation since time of last report / CCPu:

We continue to engage with the UK Government as well as with the energy regulator, Ofgem, on these issues, and to press for reform which will unlock investments in Scotland.

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

Ongoing

Timeframe and expected next steps:

Ongoing

Policy:

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

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Maintained

Progress on implementation since time of last report / CCPu:

We are engaging with Scottish developers, and pressing the UK Government to use its existing mechanisms and powers to unlock investment in pumped storage hydro.

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

Ongoing

Timeframe and expected next steps:

Ongoing

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).

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Maintained

Progress on implementation since time of last report / CCPu:

We remain involved in discussions at a UK level around the implementation of this Plan and the benefits that it can deliver.

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

Ongoing

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

Maintained

Progress on implementation since time of last report / CCPu:

We are in regular contact with transmission network owners and the system operator regarding the need for and benefits of increased interconnection to Scotland's renewables and climate change agenda.

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

Ongoing

Timeframe and expected next steps:

Ongoing

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

A great deal of activity is already taking place in this area, some of which has published or been set in motion since the Climate Change Plan update was published. We will consider and monitor these studies and their evidence before deciding on the additional value that any specific Scottish Government work might generate.

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

TBC

Timeframe and expected next steps:

TBC

Policy:

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

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

External research has been commissioned to support this policy

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

Completed research due end 2021.

Timeframe and expected next steps:

N/A

Policy:

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

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

SG continues to support energy technology innovation and we have recently committed further funding for our Energy Technology Partnership PhD programme, where sustainable security of supply is a key focus. Later this year we will launch a call for evidence later this year inviting views on energy technology development opportunities.

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:

N/A

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.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

As part of the UK Government Consultation on the Contracts of Difference, the Minister for Energy, Connectivity and the Islands submitted the Scottish Government's response on 6^th February 2021

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:

UKG was due to publish their consultation response by end of March 2021, however this has not yet materialised. With implementation Q3/Q4 2021

Policy:

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

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

This was reviewed as part of the recent ScotWind pause with the outcome announced on 24 March 2021.

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:

Supply Chain Development Statements will be required as part of applications to the current ScotWind leasing round.

Financial penalties (on a sliding scale) will be issued to applicants who fail to meet up to but not including 80% of their Supply Chain Development Statement commitments.

Applicants who fail to meet 80% (and over) of their commitments can have their option agreement withdrawn.

Policy:

Identify and support major infrastructure improvements to ensure that Scotland's supply chain companies and facilities can benefit from the continued growth of renewable energy.

Status: New, Boosted or Maintained compared to last CCP [date announced]:

New [CCPu 2020]

Progress on implementation since time of last report / CCPu:

(1) The CES Arup report published in October 2020 identified what improvements were required.

(2) Chaired by Prof Sir Jim McDonald SOWEC have commissioned a report into the Scottish supply chain to identify availability, gaps and improvements

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:

(1) A working group has been established work through the actions identified.

(2) Due to report April 2021