The future of energy in Scotland: consultation analysis

2. Meeting our Energy Supply Needs

2.1. Chapter 3 of the draft Energy Strategy consultation set out the Scottish Government's vision for transforming the energy sector, as part of the drive to tackle climate change and to bring about new economic, environmental and social opportunities to individuals, businesses and communities.

2.2. To achieve these ends, the draft Energy Strategy outlined five priorities and 27 actions.

2.3. The priorities were:

• Priority 1: Continuing to support the recovery of North Sea oil and gas as a highly regulated source of hydrocarbon fuels.
• Priority 2: Supporting the demonstration and commercialisation of Carbon Capture and Storage and CO ₂ Utilisation.
• Priority 3: Exploring the role of new energy sources in Scotland's energy system.
• Priority 4: Increasing renewable energy generation.
• Priority 5: Increasing the flexibility, efficiency and resilience of the energy system as a whole.

2.4. This chapter also posed questions relating to a new 2030 'all energy' renewables target, the role of hydrogen and the prospects of commercial development of onshore wind in Scotland.

Priorities for energy supply

Q1 What are your views on the priorities presented in this chapter for energy supply over the coming decades? In answering, please consider whether the priorities are the right ones for delivering our vision.

Summary of main themes:

• Broad overall support, across all sub-groups, for the five priorities, particularly for the whole systems approach and flexibility to adapt to emerging technology.
• A number of caveats were raised regarding the weight of emphasis on certain priorities, a perceived lack of detail or perceived areas of omission.
• There were mixed views regarding the extent of support that should be given to the recovery of North Sea oil and gas, with some respondents welcoming continued support for the sector, while some others felt there is too much emphasis on support for this sector.
• Although a relatively large number of respondents welcomed the development and commercialisation of Carbon Capture and Storage ( CCS), they highlighted perceived technical and / or financial challenges in the development of large scale CCS on a cost effective basis.
• There were some views that renewables should be supported as a significant resource in that it provides a competitive and cost-effective option.
• Some respondents felt that Priority 5 (increasing the flexibility, efficiency and resilience of the energy system as a whole) should underpin the other 4 priorities. Consideration for security of supply was also mentioned.
• There were references to the need to recognise the interdependencies between Scottish and UK energy systems and the role of European Union policy.
• Devolved policy levers should be further aligned to Energy Strategy objectives, in particular with regards to land-use planning.

2.5. 192 respondents, from across all groups, commented at this question.

2.6. The major theme in responses is one of broad overall support, from many respondents across all groups, for the five priorities presented in Chapter 3. Many respondents noted that they welcomed the whole systems approach and flexibility to adapt to emerging technologies. Several respondents commented that whilst they welcome the vision and priorities identified, they believe it will be challenging to deliver.

2.7. Many respondents commented in general terms, several commented individually on each of the five stated priorities and many focused only on the priorities that were most pertinent to their role or particular area of interest in the energy sector. A very small number of respondents actively disagreed with any of the principles.

2.8. However, there was a strong tendency for respondents to caveat their support with comments regarding the weight of emphasis on certain priorities, a perceived lack of detail or perceived areas of omission in the content of the draft Energy Strategy. Once again, this typically related to the respondent's role or particular area of interest in the energy sector.

2.9. The main sub themes in responses relating to each priority, which go some way to demonstrating differences in perspectives across respondent groupings, are detailed in the following paragraphs. Respondents expanded on many of the sub-themes raised here at later questions in the consultation.

Priority 1: Continuing to support the recovery of North Sea oil and gas as a highly regulated source of hydrocarbon fuels

2.10. There were a mixture of views regarding the extent of support that should be given to the recovery of North Sea oil and gas. A number of respondents, particularly from the Academia / Research / Training and Local Government groupings, commented positively on the proposed balance between climate change mitigation and recognition and support for the importance of North Sea oil and gas.

2.11. Several Energy respondents, particularly in the Non-Renewable sub-group, noted that they welcome continued support of the sector, recognition of its economic significance and its importance in meeting energy demand in the foreseeable future.

2.12. Several respondents, notably those in the Energy sub-group as well as Individuals, reiterated the importance of the Scottish Government helping to support and encourage transfer of skills from the oil and gas sector and its supply chain to the renewables sector, albeit a small number commented on challenges in this respect.

2.13. Other respondents, particularly from the Third Sector / NGO grouping and those in the Renewable sub-group, felt there is too much emphasis on supporting North Sea oil and gas.

2.14. A small number of respondents, particularly in the Public Sector / Delivery Agency / Regulator and Third Sector / NGO groups commented on their support for realising economic benefits from decommissioning.

Priority 2: Supporting the demonstration and commercialisation of Carbon Capture and Storage and CO2 Utilisation

2.15. A relatively large number of respondents from across respondent groups, whilst welcoming support for development and commercialisation of Carbon Capture and Storage and CO2 Utilisation, highlighted perceived technical and / or financial challenges in the development of large scale CCS on a cost effective basis. In particular, a lack of funding was cited by several respondents. Others felt that CCS is ready for wider deployment with appropriate support.

2.16. Other respondents from a small number of groups expressed concerns that a focus on CCS suggests too great an emphasis on fossil fuels going forward and others questioned whether there will be sufficient demand across industries to warrant CCS.

2.17. A small number of respondents commented on the need for support from / alignment with the UK Government to effectively move forward with CCS.

Priority 3: Exploring the role of new energy sources in Scotland's energy system

2.18. Respondents from across groups, particularly Academia / Research / Training, several Energy sub-groups and Local Government, commented in detail regarding hydrogen as a means to decarbonise heat (please refer to Question 7 for more information in relation to the use of hydrogen). Their comments often linked this to the development of CCS for successful implementation and potential decarbonisation of heat and transport.

2.19. A number of respondents, from the Community, Local Government, Public Sector / Delivery Agency / Regulator and Third Sector / NGO groupings welcomed references to the role of land use planning and / or marine planning. In particular, several focused on the need for more integration of Scottish Government strategy across planning and energy.

2.20. Several respondents in the Academia / Research / Training group commented on Biomass and CCS as an opportunity to be approached with caution given uncertainties around technology and economic benefits and some identified a need for further research.

2.21. A small number of respondents commented on unconventional oil and gas ( UOG) at this question. Among these respondents there was some opposition to any development of UOG in Scotland's energy mix, some in favour of development of UOG, and some were keeping an open mind on exploring its potential (see Box on page 21 for more information on the range of views).

Priority 4: Increasing renewable energy generation

2.22. There was widespread explicit or implicit support for increasing renewable energy generation, albeit that many respondents' comments focused on specific aspects of renewables linked to their particular interest or perspective. A number of respondents commented on the 2030 renewable target and the relative effectiveness and efficiency of both existing and emerging technologies that might contribute to meeting that target. Some respondents commented on the importance of energy efficiency savings in also helping to achieve the target. Others noted that the target will be challenging (further views are explored under Question 3 and 4).

2.23. A small number of respondents, particularly in the Renewable and Utility sub-groups, noted their belief that renewables, particularly onshore and / or offshore wind, can provide competitive cost-effective options when compared with traditional fuels, particularly given the costs associated with CCS. The importance of specifically supporting offshore wind and marine renewables as a significant resource was also mentioned by respondents in the Third Sector / NGO group and others.

2.24. The cost effectiveness of solar thermal energy was particularly noted by some respondents in the Renewable and Other Energy sub-groups. A respondent in the Public Sector / Delivery Agency / Regulator group and a Local Government respondent commented positively on the role of solar PV.

2.25. Several respondents commented positively on the recognition of the role for pumped hydro storage.

2.26. A small number of respondents commented positively on the role of renewable electricity and renewable heat, albeit recognising challenges. For example, the challenging route to market that has been acknowledged by the SG for onshore wind projects and grid connection for remote sites generating surplus renewable electricity.

Priority 5: Increasing the flexibility, efficiency, and resilience of the energy system as a whole

2.27. A number of respondents across groups, particularly Energy sub-groups, highlighted this as a key priority or the priority that underpins the remaining four.

2.28. There was comment on the need for greater integration between the electricity, transport and heat sectors and use of technologies to facilitate integration of renewables.

2.29. A small number of respondents made specific comments relating to the importance of considering security of supply and factors that might improve security of supply.

Additional recurring sub-themes

2.30. There were a number of recurring sub-themes in comments at this question. Most commonly these included:

• The need to recognise the interdependencies between Scottish and UK energy systems, a perceived divergence in some Scottish and UK policies and strategies, the role of European Union policy and regulation to date and lack of clarity on relationships with the EU going forward. These comments were particularly common across Energy sub-groups as well as the Academia / Research / Training group. Some respondents noted the importance of collaboration between the Scottish Government and the UK Government going forward and others commented on the importance of the Scottish Government's lobbying role.
• The need to focus more on energy efficiency, whether linked to domestic, non-domestic or transport; some respondents noted that this is addressed elsewhere but would like to see greater emphasis on energy efficiency within the priorities.
• The need to offer greater certainty over future direction of Scottish Government priorities in order to encourage and facilitate investment from the private sector.
• The need for the planning system to support and facilitate developments necessary to deliver the long term changes to the energy system.
• The need for nuclear to form part of the energy mix going forward and suggestions that the Scottish Government should review its stance regarding nuclear.
• The need to foster and encourage involvement of communities in the transformative process.

Unconventional Oil and Gas

35 respondents across sub-groups commented on unconventional oil and gas ( UOG) at various questions throughout the consultation.

A small number commented that they had replied to the separate consultation on unconventional oil and gas (Talking "Fracking" - a consultation on Unconventional Oil and Gas).

18 respondents were against the development of UOG, shale gas or fracking (including the use of fracking to produce hydrogen) activities in Scotland. These respondents were primarily from the Third Sector / NGO, Community and Individual sub-groups. Two others described the use of UOG as problematic or as a short term solution.

The main reasons given for opposition were that UOG recovery has a negative effect on the environment and on public health and safety. There were also comments that the process is uneconomical and concerns about the regulations and licensing arrangements currently in place. There was support for the current moratorium and calls for a total and permanent ban to include all forms of UOG.

Nine respondents (mainly from the Non-Renewable and Other Energy sub groups) supported the recovery of UOG or said it requires consideration. Another (from the Engineering / Network sub-group) said that the Scottish Government should keep an open mind.

Comments from this group were more in-depth than from those opposed to UOG and are summarised below:

• The need to look at ways to ensure supplies in the light of dwindling North Sea production and the impact on the economy of importing foreign supplies.
• That importing oil and gas also comes with environmental impacts.
• Requests for a more favourable attitude in order to allow a debate on the subject.

Five other respondents (from a variety of sub-groups) commented without saying whether they support or oppose the use of UOG. Their comments included queries as to whether future production levels will make the use of UOG a necessity and the need to look at environmentally responsible ways of extracting unconventional resources.

Actions for energy supply

Q2 What are your views on the actions for Scottish Government set out in this chapter regarding energy supply? In answering, please consider whether the actions are both necessary and sufficient for delivering our vision.

Summary of main themes:

• Many respondents, across groups, simply voiced support for the actions in general or for specific actions; these supportive comments were all brief, along the lines of 'the respondent supports x'.
• There were few recurring themes relating to the actions overall, however some suggestions made were relevant to all the actions.
• A more detailed breakdown of comments appears at Appendix 2.

2.31. There were comments in 171 responses on the actions set out in this chapter.

2.32. There were a total of 27 actions set out under these 5 priorities, and a full listing of these is in Appendix 2. The number of actions under each priority were as follows:

• Priority 1: Oil and Gas - 5 actions
• Priority 2: CCS and CO ₂ Utilisation - 5 actions
• Priority 3: New Energy Sources - 3 actions
• Priority 4: Renewable Energy - 10 actions
• Priority 5: Flexibility and Resilience - 4 actions.

2.33. Several respondents, from various sub-groups, reiterated comments made at the previous question regarding the overall priorities or meeting energy supply needs in general.

2.34. Many respondents, across groups, simply voiced support for the actions in general or for specific actions; these supportive comments were all brief, along the lines of 'the respondent supports x'.

2.35. A number also gave their views on actions under each of the priorities (albeit small numbers commented on each) and / or suggesting additional actions. These comments and suggestions are outlined in Appendix 2.

2.36. Some suggestions made cut across the actions overall, including:

• The need for more detail on the investment from the Scottish Government that will be available to support the Strategy and, in particular, innovation around renewable technology.
• The need for specific actions relating to the Scottish Islands, in particular energy supply and generation and energy independence.
• The need to support planning authorities to deliver the 'infrastructure first approach'.
• The need for detail on the legislative powers that will be required to deliver the Strategy.
• The need for an action aimed at increasing, or utilising existing, manufacturing of technologies and infrastructure to help reduce supply-chain costs.
• The need for an energy system modelling tool for assessing current and future market viability of specific offering.

Proposed renewable energy target for 2030

Q3: What are your views on the proposed target to supply the equivalent of 50% of all Scotland's energy consumption from renewable sources by 2030? In answering, please consider the ambition and feasibility of such a target.

Summary of main themes:

• Over a third of those who commented voiced support for setting a new 'all energy' renewables target, although there was a perception from some that it is too ambitious. A small number disagreed with setting targets of any kind.
• There were requests for the target to apply to all low carbon sources of energy, not just renewables.
• There were requests for more detail on different aspects of the target, e.g. the balance of effort between transport, heat and electricity.
• A need was identified for strategy and strong leadership, clear guidance and consistent, stable and clear fiscal policy support.
• Respondents thought there had to be a clearer articulation of the balance of roles between Scottish Government and others in achieving the target.

2.37. Comments on this question came from 187 respondents across all respondent groups.

2.38. Support for the proposed target: Many (73) of these respondents, across all sub-groups, voiced support for the proposed target, with comments such as 'this positions Scotland as a leader in terms of renewable energy generation' or 'welcome Scottish Government's commitment to tackling climate change'. Several respondents quoted research undertaken by Ricardo AEA which supports this target; as noted by an organisation in the Third Sector / NGO sub-group:

"The 50% target is consistent with independent research for WWF Scotland, Friends of the Earth Scotland and RSPB Scotland by Ricardo AEA - The Energy of Scotland report - which found that a 50% renewable energy target for 2030 was a cost optimal pathway for delivering on the Scottish Climate Change Act based on MARKAL modelling. This echoes further analysis for Scottish Renewables showing a strong case for setting a 50% target."

2.39. Views on the credibility of the target: Many respondents, primarily those in various Energy sub-groups or Individuals, felt the target is unrealistic or too ambitious. The key comment emerging across these respondents was that while decarbonisation of the electricity sector is largely complete, that the heat and transport sectors will be much more difficult. As noted by an organisation within the Public Sector / Delivery Agency / Regulator sub-group:

"The decarbonisation of the electricity sector is largely complete, however, that can be viewed as 'the easy bit'. Tackling the heat and transport sectors will be much more difficult, and will require a concerted effort from both public and private sectors."

2.40. Target is unambitious: Several respondents, primarily those in the Community sub-group or Individuals, noted that this target is unambitious, with some suggesting a more ambitious target of 75% by 2030 and with total net decarbonisation by 2040. Several respondents commented that it will be difficult for all sectors to achieve this target and a small number of Local Government organisations noted the target is ambitious given the lack of progress in meeting heat demand from renewables to date.

2.41. Disagreement with the target: A small number of respondents disagreed with this target on the grounds that it is an expensive form of energy for consumers, that it suffers from intermittent supply issues and that alternatives such as gas or other forms of conventional power generation are preferable.

2.42. A need for the target to apply to all low carbon sources of energy: Many respondents commented that this target should not apply solely to renewables but to all low carbon sources of energy. They cited a number of different technologies that could form an effective low-carbon energy system and these included hydrogen, CCS, combined heat and power ( CHP), solar, nuclear and district heating. However, a small number of respondents did note their concern over the emphasis of CCS in the strategy or that this could make the target very challenging.

2.43. A need for more detail: Many respondents across all sub-groups requested further information or detail. These requests included:

• More / additional detail, including timescales, on how the target might be met so as to give developers and suppliers market confidence to invest and provide further cost reductions.
• Further modelling to show how demand for energy from other sources will be reduced or replaced and what this will cost.
• Scenarios on how the target will be achieved.
• The anticipated contributions from each area (electricity, heat and transport).
• A need for unambiguous and quantifiable measures to achieve the target - a detailed action plan for electricity, heating and transport describing how energy consumption can be supplied from renewable sources.

2.44. The role of the Scottish Government: Several respondents commented on the role of the Scottish Government in delivery of this target, with comments on the need to provide:

• Strategic and / or strong leadership, clear guidance and consistent policy support.
• Stable and clear fiscal policy support for energy generation and energy storage to attract investment and a supportive regulatory regime.
• Appropriate financial incentives such as Renewable Energy Investment Fund ( REIF) or Renewable Heat Incentive ( RHI).
• Encouragement for greater levels of investment in heat generation and new technologies, such as more support for electric vehicles ( EVs), investment in research, facilities and engineering and so on.

2.45. Decision making powers: Several respondents commented on the issue of devolved policy to Scotland, with some of these noting that some energy decisions will be outwith the remit of the Scottish Government and subject to acceptance by the UK Government. Some of these respondents also noted the need for the Scottish Government to work closely with the UK Government given that Scotland's energy policy is directly linked and interconnected with the rest of the UK. A small number of respondents also noted their concerns over the impact of Brexit.

2.46. The need for interim targets, regular reviews and ongoing monitoring: Several respondents suggested the imposition of interim targets and / or regular reviews, with ongoing monitoring. There was a suggestion from a small number of respondents for short and medium targets to 2030 and then longer term targets to 2050, with continued use of gas in the short term while other technologies are still being developed.

2.47. A need for separate sectoral targets: A small number of Local Government organisations noted a need for separate heat and transport sectoral targets and a Third Sector organisation noted that sectoral pathways would offer transparency and clarity on how sectoral targets will be achieved.

2.48. The role of enabling policies: A number of areas were raised by several respondents under this question as being necessary to support the delivery of the target, including (discussed in full elsewhere in the report):

• The planning system.
• Energy efficiency and demand reduction.
• The importance of behaviour change and public engagement (see later chapter on Delivery, Monitoring and Engagement for more detail on public engagement).
• The potential for improved grid management and flexibility (including storage) and the necessary changes to the regulatory regime.

2.49. Changes to grid management: Several respondents, many of whom were within Local Government or the Energy sub-groups, referred to necessary changes to the National Grid, with those in the Local Government sub-group requesting a grid connection from the Scottish Islands to the mainland. There was also reference to the need for the existing grid structure to be modernised so as to deal with increased renewable power on the grid, or improvements to the distribution grid in Scotland so that it can cope with different generation types and technologies.

Target for low and zero carbon energy technologies

Q4: What are your views for the development of an appropriate target to encourage the full range of low and zero carbon energy technologies?

Summary of main themes:

• Many voiced support for considering a 2030 target that included a wide range of low carbon technologies. A small number disagreed with setting targets of any kind.
• There were suggestions for setting targets for specific technologies, together with interim targets that can be used for ongoing monitoring.
• There were some suggestions for alternative targets.

2.50. Comments on this question came from 161 respondents across all respondent groups.

2.51. Supportive of the development of an appropriate target: Many (36) of those responding to this question were supportive of the development of an appropriate target to encourage the full range of low and zero carbon energy technologies. Key reasons were that it would inform SEEP targets and guide the ways in which incentives, grants, support and regulation could be used to achieve this, or that it provides a clear investment signal.

2.52. Disagreement with setting targets: A small number of respondents disagreed with setting targets. Key reasons for this included that they can provide negative consequences in favouring specific technologies that might not be the most effective in the long term and which could serve to distort the market, or that there should not be targets on technologies which are as yet not proven to be the most effective. Also, decarbonisation should be achieved in a cost effective way rather than specifying the means by which this is to be achieved. A small number of respondents, mostly Individuals, also noted that investment would be more important than setting targets or that supporting mechanisms need to be in place.

2.53. Setting targets for specific technologies: Many respondents across a number of sub-groups commented on the need to set targets for specific technologies, to help to attract investment and / or enable cost reductions, or that targets are necessary to help guide future policy decisions. That said, a small number commented on the need for targets to be flexible and encourage innovation.

2.54. Other suggestions, each from a small number of respondents included the need for:

• A long term perspective for targets.
• Interim targets to be used for ongoing monitoring.
• Targets to be combined with broader policy and fiscal measures.
• A target for community energy or one that will offer potential to encourage uptake at a community or local level.

2.55. Possible alternative targets: Many respondents, while in agreement with the setting of targets in general, made suggestions for alternative targets that could be used. Most of these suggestions came from respondents within the Energy and Third Sector / NGO sub-groups. These included:

• Net zero emissions target for 2050.
• An overarching low and zero carbon target or a low carbon target.
• A target for installed Energy storage.
• The use of electric vehicles or the phasing out of fossil fuel car sales.
• The vast majority of homes should achieve EPC rating of 'C' by 2025.
• The uptake of renewable or low carbon technologies within public sector buildings.
• A carbon reduction target for each local authority.
• A proportion of heat, or district heating, to be delivered from renewable sources.

Reduction of carbon dioxide emissions, as set out in the Climate Change Act and the Climate Change Plan.

2.56. Need for targets to cover a wide range of technologies: Many respondents requested this so that all options can be included in the energy mix, albeit there would be a need for effective co-ordination and focus on innovative technologies as they develop.

2.57. The need for long term targets, with interim targets: There were also calls from several respondents for any targets to be long term, and with interim targets. A small number also noted that targets need to be realistic, achievable, and flexible. A small number also commented that whatever target(s) is set, it will need to encourage innovation and the ongoing development of technologies.

2.58. A need for more detail: There were calls from several respondents across a range of sub-groups for further information or clarity. At a basic level, there were a small number of requests for a definition of what is meant by 'low' and 'zero carbon technologies' or clearer definition of any targets set. There were also requests for more detail on how policies will help to deliver targets or how targets outlined in the Scottish Government's Climate Change report will be achieved.

2.59. The need for support or incentives: Several respondents noted the need for support or incentives to be provided, to help bring certainty and stability to the market.

2.60. A need for Scottish Government involvement: Once again, there were also some requests for the Scottish Government's involvement in delivery of any target(s); including published information on whether targets are being met, targeted policies to allow support to reflect the risks of technological development, and deployment and strategic channelling of fiscal and institutional support to technologies demonstrating effectiveness.

2.61. Other points raised by relatively small numbers of respondents included the need for:

• Collaboration between local and central government, or between the public and private sectors or between the public and private sectors and communities (covered in greater detail elsewhere in the report).
• A need to engage with the public in order to increase public awareness of the need to change lifestyle.
• A need to engage with landlords to adopt new technology (covered in greater detail elsewhere in the report).
• A need to have a system of review or monitoring in place in order to assess progress and ensure that resources are used effectively.
• A need for pathways for delivery of policies and actions.
• A national roadmap to clarify when decisions will be made at a national level for rolling out new energy choices.

2.62. There were also some queries as to how the Scottish Government will work with the UK Government, particularly as some of the low carbon technology policies are within the remit of the UK Government.

Commercial development of onshore wind

Q5 What ideas do you have about how the onshore wind industry can achieve the commercial development of onshore wind in Scotland without subsidy?

Summary of main themes:

• A number of key issues were outlined that are needed to create the commercial development of the onshore wind industry without subsidy, including a more streamlined and consistent consenting and planning process, the use of spatial planning for projects, together with updated guidance, stability in terms of grid connections, grid management and charges and alternative funding options to mitigate against the loss of subsidies, including Power Purchase Agreements and a route to market under a zero-subsidy Contracts for Difference mechanism.
• There were some suggestions for maximising economies of scale, for example, through extensions to existing projects, opportunities for smaller projects to establish links with a neighbouring high-energy user capable of utilising energy or more efficient turbines.
• There were suggestions for a number of actions to be undertaken by the Scottish Government including close working with the UK Government.
• There were some comments on the need for continuing subsidies until the onshore wind sector is established; particularly within remote and rural locations because of a lack of enabling infrastructure and grid connection.

2.63. 124 respondents, across all groups, commented at this question.

2.64. Allied to this consultation was one on the draft Onshore Wind Policy Statement. This provides further detail and should be read in conjunction with this report.

2.65. Some respondents to this consultation noted support for the Scottish Government's ambition to achieve a subsidy-free onshore wind sector in Scotland. Some noted that costs are falling across the sector and that onshore wind is now among the lowest cost forms of new power generation.

2.66. Respondents focused on a number of key issues that are needed in order to create the commercial development of the onshore wind industry without subsidy; outlined in the following paragraphs.

2.67. Role of the Scottish land use planning framework: Many respondents referred in some way to the current land use planning framework, with some of these - across most respondent groups - requesting a more streamlined planning process. These respondents referred to the need for a faster, more efficient, streamlined and consistent consenting process, to allow for a more co-ordinated and plan-led approach to development, which in turn would provide more certainty for investors and reduce the risk of costly and lengthy challenges to planning applications. There were also a small number of requests not to increase planning fees.

2.68. The use of spatial planning: Several respondents, primarily in the Third Sector / NGO sub-group, commented on the need to use spatial planning for renewable energy projects as this would help to identify the most suitable sites for development and to help guide sites for future development that have the lowest costs in terms of initial financial set up and the least impact on wildlife and the environment; and thus help to de-risk projects. There were also a small number of comments that local development plans need to be fully aligned with the Scottish Government vision for energy in Scotland.

2.69. The planning process and the development of energy generation should be more closely aligned: A small number of respondents in the Renewable sub-group also commented on the current lack of coordination between the planning process and energy development, with some sites at the pre-planning application stage having grid capacity ahead of sites that already have planning and consents in place. A small number of respondents also noted there should be less stringent planning permissions on visual impact restrictions. Several respondents suggested the need to cut back on community benefits, shared ownership and / or the mitigation required by National Air Traffic Services.

2.70. Need for updated guidance: There were requests from several respondents, primarily in the Renewable sub-group, for Renewables Guidance, particularly the online renewable energy planning guidance, to be updated and kept updated. Again, this should be consistent with the Energy Strategy and the ambitions outlined in the draft Onshore Wind Policy Statement and should include guidance on extending or amending consent on existing sites.

2.71. Maximising economies of scale: There were a small number of suggestions for opportunities to maximise economies of scale by extending existing projects, or through smaller projects establishing links with neighbouring high users of energy. Allied to this, there were suggestions from several respondents across the Energy sub-groups, in the Public Sector / Delivery Agency / Regulator sub-group and in Local Government that it should be possible to repower where this is economically viable as this would offer additional capacity, with a small number suggesting the Energy Strategy needs to provide more support for repowering. Another means by which to maximise economies of scale cited by respondents, many of whom were in the Renewable Energy sub-group, was the need for the planning system to support more efficient turbines, that are higher and with longer blade lengths. A small number of respondents noted this is already practice in some other countries and would increase the output, efficiency and therefore the viability of onshore wind. There were also some suggestions that there would be economies of scale if turbines are co-located. This would help to open up more predicable income streams and maximise the efficiency of onshore wind.

2.72. Role of Scottish Government in setting the UK policy framework: Several respondents commented on actions that need to be undertaken by the Scottish Government to monitor developments in the UK policy framework and the need for it to work closely with UK government on a market stabilisation mechanism in the short term and on a future price control framework so there is a route to market for onshore wind projects.

2.73. A small number of respondents felt the Scottish Government should encourage the UK government to extend the obligation set out to 2030 and to allow new renewable projects to be eligible for receiving Renewable Transport Fuel Certificates ( RTFC) which can help provide an alternative revenue stream.

2.74. A small number of respondents also commented that the UK Government's commitment to nuclear power and a centralised strategy for energy supply will obstruct the granting of licenses for major Scottish energy projects or that UK Government energy policy is already restricting the commercial potential of wind energy in Scotland.

2.75. A small number of respondents also noted that the Scottish Government should continue to support Remote Island Wind being classed as a separate technology from UK Mainland Onshore Wind to allow access to the Contract for Difference ( CfD) support mechanism and help to mitigate inequitable transmission charges.

2.76. Alternative funding options: Many respondents made suggestions for alternative funding options to mitigate against the loss of subsidies. These included:

• Shared / community ownership, although there were some suggestions that subsidies would still be required for community ownership projects as these tend to be on a smaller scale.
• The allocation of capital grant funding for community organisations promoting renewables.
• The reintroduction for community share offers of Seed Enterprise Investment Scheme / Enterprise Investment Scheme ( SEIS / EIS) subsidies which were phased out in 2015.
• Introduction of a Scottish Renewable Energy Bond (this is covered in greater detail in a later question).
• Crowdfunding.
• Introduction of a carbon tax that penalises other forms of energy and which is supported by import tariffs.
• A small number of respondents referred to the ongoing Barclay Review into business rates.
• Power Purchase Agreements ( PPAs) under a 'sleeve arrangement' would offer a potential route to market.
• Contracts for Difference ( CfD) offer a low risk route to market and help to provide a level playing field for onshore wind (mentioned mainly by respondents in the Renewable Energy sub-group).
• Scottish Investment Bank or a Scottish Energy Company which could back projects that commercial investors might not wish to back.
• Investing ongoing profits to replace existing turbines and to provide ring fenced funding for onshore wind to support the sustainability of the sector.
• Some form of floor price guarantee.
• Inward investment in turbine manufacture to mitigate fluctuations in supply chain uncertainty and to reduce costs.

2.77. A need for ongoing investment / incentives for energy research: There were also requests from a small number of respondents for ongoing investment and / or incentives in energy research, smart grids, other technologies such as storage, the construction of hydrogen producing electrolysis plants to facilitate exploitation of under-utilised renewable resources or investment in the skills required in this sector. There were also suggestions for an end to subsidies for fossil fuels.

2.78. Grid / transmission: Many respondents, often from the Renewable sub-group, commented that without subsidies there would need to be stability in terms of grid connections, grid management and charges. There were some suggestions for a grid charging regime for demand to be allowed to vary by transmission zone or for lower connection costs through flexible local connection.

2.79. Need for partnership working / collaboration: As at previous questions, several respondents noted the need for engagement and partnership working between the Scottish Government and various other organisations. This is covered in more detail elsewhere in this report.

2.80. A case for continuing subsidies: There were comments, primarily from respondents in the Third Sector / NGOs, in Local Government or in Public Sector / Delivery Agency / Regulator, about the need for continued subsidies for the onshore wind sector as subsidy is an effective tool to enable the onshore wind market to deliver policy objectives during periods of change and that subsidies should not be removed until the industry is established. For example, the comparative size of some developments does not allow costs to be driven down enough to enable them to be subsidy free, particularly smaller developments that are community-owned.

2.81. There were also some comments about the need for continued subsidies for rural and remote locations, particularly the Islands, because of the lack of enabling infrastructure and grid connection. A small number also noted that the easiest sites have now all been developed and that it will be more costly to develop future sites.

2.82. Other issues raised by small numbers of respondents included:

• The need for devolution of energy policy to meet Scotland's carbon free energy targets.
• Reference to Everoze Report commissioned by Scottish Renewables (this report notes that costs can be reduced and investment encouraged significantly via a smarter planning system, a transformed grid and a revolution in revenue model).

Decommissioned thermal generation sites

Q6: What are your views on the potential future for Scotland's decommissioned thermal generation sites?

Summary of main themes:

• A capacity to use the existing infrastructure is perceived as a key benefit; this is due to a combination of their strategic locations, a skilled workforce, their existing grid capacity and community support.
• There were also suggestions that the existing infrastructure can be used as centralised energy storage to help mitigate against the intermittent nature of renewable energy.
• There were some references to a need for additional policy support within the planning system such as the need for these sites to be highlighted in the National Planning Framework as priority energy development sites.
• Only a small number of respondents felt there were disadvantages in using existing sites.

2.83. Comments on this question came from 106 respondents across all respondent groups.

2.84. Benefits of using existing infrastructure: Most of the comments made by respondents related to the benefits of using the existing infrastructure. The advantages of using the existing infrastructure include strategic locations which offer good access to transport routes using rail, road or water, as well as access to water for cooling, a skilled workforce and community support. Several respondents focused on the need to try and maintain existing jobs for the benefit and welfare of the local communities, particularly as the relevant skillset already exists in these locations. A Trade Union respondent noted that these sites are substantial employers and that the draft Energy Strategy needs to give greater consideration to the employment provided by these sites within local communities. Furthermore, these lost jobs will not be replaced by the renewables sector.

2.85. Usage of the existing infrastructure: Many respondents noted ways in which the existing infrastructure could be used, with reference to the capacity for centralised energy storage from several respondents as this can help to overcome the intermittent and reliability issues related to renewable energy. A small number of these respondents referred specifically to Longannet being a possible location for hydrogen production and storage.

2.86. Another benefit to using the existing infrastructure mentioned by a small number was that of the existing grid capacity, which could be made available to other generators.

2.87. A respondent within the Academic / Research / Training sub-group and reflecting comments made by a number of other respondents noted a number of advantages:

"Their primary advantage is their grid connectivity and the fact that these sites have already been used for industrial power generation, both of which should facilitate the potential for co-use in these locations. This should be geared towards renewable / low carbon options. Innovative, site specific renewable generation solutions should be sought for these sites to continue generating electricity. In addition to this these sites are often surrounded by residential areas and therefore co-generation and district heating solutions should be encouraged."

2.88. Use of decommissioned sites: Many respondents noted specific forms of energy that would be suited to these locations and these included:

• Renewable energy generation such as wind or solar.
• Nuclear energy, with some reference to the use of Small Modular Reactors ( SMRs).
• Gas fired power stations (such as Combined Cycle Gas Turbines ( CCGTs), with some references to CCS.
• Biomass applications.
• Hydrogen production.
• Capturing heat for district heating systems, as some of these sites are surrounded by residential areas.

2.89. Other potential non- energy uses cited by two or more respondents included:

• Maritime construction / decommissioning.
• Research / development / training.
• Helping wildlife, for example in creating SSSIs or managing environmental risks.
• Business hubs.

2.90. The disadvantages of using existing infrastructure: A small number of respondents felt that as some of these sites are in remote locations, they might not be ideally positioned in respect of the efficient distribution of heat networks. A similar number noted the need to assess the potential value of sites, particularly in respect of emerging and developing technologies. A small number also cautioned on the need to ensure that any future use must meet the tests of keeping the system within carbon budgets while providing energy security at the lowest possible cost.

2.91. The need for policy support: Once again, there were several references to the need for the planning system to attach planning importance to these sites so they are not lost to non-energy development or that they should be highlighted in the National Planning Framework ( NPF) as priority energy development sites. Indeed, two local authorities noted that these are national assets and that this should be reflected in the NPF and development plans. A key benefit to this is that the use of existing brownfield sites can avoid the timescales and costs associated with obtaining planning permission and environmental permits.

2.92. While there is a preference from many respondents to continue to use these sites for energy generation, a small number cautioned that the decision to redevelop these sites remains with the owner.

The role of hydrogen

Q7: What ideas do you have about the role of hydrogen in Scotland's energy mix and the development of hydrogen production in Scotland?

Summary of main themes:

• There was overall support for developing the role of hydrogen in Scotland's energy mix.
• Hydrogen can be used across different sectors including transport, heating and power, although there were some suggestions that hydrogen is best suited to the transport sector.
• There were suggestions hydrogen capacity can be set up on sites adjacent to large scale wind energy sources to enable use of surplus energy, although there would also be a need for storage facilities.
• Although views were generally positive about the role of hydrogen, there were some provisos or concerns noted by respondents, with some requests for hydrogen to be produced from non-fossil fuels. There were also some comments that Carbon Capture and Storage ( CCS) is needed but that at present is has not been developed at sufficient scale.
• There were some calls for the Scottish Government to be involved in and / or provide support for demonstration projects.
• It was also felt that there is a need to increase public awareness, engagement and perceptions so that hydrogen can be accepted as a possible energy source.
• There were also calls for further development of the UK Hydrogen and Fuel Cell Roadmap, with some suggestions for a similar Scottish-based roadmap.

2.93. Comments on this question came from 140 respondents across all respondent groups.

2.94. Overall, there was support for developing the role of hydrogen in Scotland's energy mix, with many respondents pointing out various advantages that this brings with it.

2.95. Only a small number of respondents - primarily Individuals - were against the use of hydrogen in Scotland's energy mix; key reasons were that they felt it would be unsafe, it would be expensive to replace infrastructure and equipment such as boilers and that it is dependent on CCS which is as yet unproven as a technology.

2.96. Advantages of hydrogen: A key advantage noted by many respondents was use of the existing gas distribution network, which would help to avoid huge capital investment in a new infrastructure. Some of these respondents commented that it is possible to blend a proportion (c. 5-15%) of hydrogen in the natural gas grid. A smaller number of respondents suggested that in the short term it would be possible to have a mix of hydrogen and natural gas in the existing gas grid with no significant impact; then in the longer term the distribution networks should be converted to transport 100% hydrogen. The downside of this approach - noted by a small number of respondents - was that the switch to hydrogen could be a greater challenge than the switch to natural gas in the 1970s.

2.97. Some respondents, primarily within the Energy and Academic / Training / Research groups, along with some Individuals, noted that hydrogen can make a contribution as a fuel source for a number of different sectors including transport, heating and power.

2.98. Use of hydrogen in electric vehicles: Many respondents - many from the Energy sub-groups - cited a number of benefits to using hydrogen for transport including that:

• It produces no harmful emissions and thus can improve air quality.
• Hydrogen electric vehicles are quieter and smoother to run.
• Hydrogen electric vehicles have a better range of travel than battery electric vehicles, and a shorter refuelling time.

2.99. There were also some comments that an infrastructure would need to be in place to encourage development and take up of hydrogen electric vehicles.

2.100. Several respondents felt that hydrogen was suited to specific types of vehicles and that further development of this technology should focus on these vehicles. These included buses, large commercial vehicles, coaches, vans and heavy duty transport. There were also a small number of mentions of ferries. A small number of respondents suggested the public sector should set an example to other sectors by making use of hydrogen forms of transport.

2.101. Another advantage cited by several respondents was that hydrogen capacity could be set up on sites adjacent to large scale wind energy sources. This provides opportunities to use surplus electricity produced from wind or renewables to generate hydrogen, although there would need to be storage facilities co-located so as to store excess renewable generation at times of high renewable output. There were a small number of suggestions that storage facilities could be located adjacent to the main truck routes for gas grid conveying, with some references to St Fergus and Bacton.

2.102. Reducing fuel poverty: Given that many renewable sources of energy are located in more rural and remote locations in Scotland, and that these areas tend to have higher proportions of individuals in fuel poverty, producing hydrogen from renewable energy, would also serve to help reduce fuel poverty in households unable to access the grid. This comment came primarily from respondents within Local Government and the Academic / Research / Training sub-groups.

2.103. A small number of respondents also noted the need for a supply chain to support the development of the hydrogen sector in Scotland.

2.104. Other advantages cited by small numbers of respondents included:

• There is significant potential for the hydrogen sector to harness the skills and expertise that have been developed within the offshore oil and gas industry.
• There are opportunities to produce hydrogen from water when large wind farms and other renewable energy generation facilities are facing constraints.
• Hydrogen is low carbon / zero carbon at point of use.
• The combination of hydrogen from steam methane reformers along with CCS technology could mean a very low carbon fuel source that can be used to help address the traditionally hard-to-decarbonise sectors of heat and transport.
• Hydrogen can be delivered at constant prices irrespective of wider fossil fuel energy market price movements.

2.105. Concerns about hydrogen: While views were relatively positive over the role of hydrogen in Scotland's energy mix, respondents noted some provisos and / or concerns. Many respondents, primarily in the Energy sub-groups, the Third Sector / NGOs and Local Government, said hydrogen should be produced from low carbon sources such as electrolysis using renewable energy. Some of these respondents noted they did not want hydrogen produced from fossil fuels, with the reason being that it will not contribute to the renewable energy target of 50% if fossil fuels are used. One felt the draft Energy Strategy did not focus enough on the benefits of green hydrogen over brown, with another suggesting consideration of Power to Gas (P2G) which generates hydrogen from surplus renewable energy and then combines it with carbon dioxide to make methane.

2.106. Many respondents also made comments in relation to Carbon Capture and Storage ( CCS), in that hydrogen needs to be integrated with CCS to be an effective energy source. Comments included that there will need to be development of CCS at sufficient scale but there were some comments that this would have cost and infrastructure challenges and that CCS is, as yet, an unproven technology. A small number of respondents noted concerns that the energy generation projections from BEIS do not include CCS in the UK's energy mix until 2032; others noted concern that there is not a long enough timescale to meet the 2032 target in the draft Climate Change Plan.

2.107. A small number commented on challenges in respect of scale, geographic spread and regulatory burdens.

2.108. Role for Scottish Government: Given that for many respondents, hydrogen technology is still relatively untested and new, there were several comments relating to the need for the Scottish Government to be involved in, and / or provide support for competition and demonstration projects. These projects are seen as needed to fully test assumptions and clarify the potential for hydrogen and to look at the wider use of hydrogen in Scotland's energy mix and to look at technical delivery mechanisms for gas network upgrades to accommodate higher mixtures of hydrogen. Additionally, respondents saw a need to carry out cost benefit analysis and consider associated costs and benefits. Some respondents also made positive reference to demonstration projects already underway utilising the use of hydrogen technology; these included projects in Aberdeen, Fife, Orkney, Leeds and Levenmouth.

2.109. Increasing public awareness, engagement and perceptions: Several respondents commented on the need to increase awareness of hydrogen as a potential energy source, to create public engagement and to improve public perceptions of hydrogen (see later chapter on Delivery, Monitoring and Engagement for more detail on public engagement). These comments came primarily from respondents in the Energy sub-groups and Local Government. There were also a small number of suggestions for support to businesses, in the form of subsidies and incentives.

2.110. Some respondents, primarily in the Energy sub-groups, referred to the need to develop the UK Hydrogen and Fuel Cell Roadmap further, with suggestions that Scotland could align its work with this and work with the UK Government, BEIS, industry and other stakeholders. There were also several requests for a Scottish-based roadmap.

2.111. As at previous questions, several respondents also noted the need for a supportive policy framework and changes to regulation, for example in updating building regulations to require low carbon heating in properties, or amending the Gas Safety & Management Regulations ( GSMR) to allow a higher proportion of hydrogen to be mixed into the gas grid.

2.112. Several respondents reiterated points made to earlier questions and these included the need for a range of technologies within Scotland's energy mix.