Draft Energy Strategy and Just Transition Plan

Ministerial Foreword

The evidence has never been stronger on the need for transformation of our energy system. We are publishing this draft Energy Strategy and Just Transition Plan at a time of unprecedented uncertainty and change in global and national energy systems. The imperative is clear: in this decisive decade, we must deliver an energy system that meets the challenge of becoming a net zero nation by 2045, supplies safe and secure energy for all, generates economic opportunities, and builds a just transition.

The current uncertainty in our energy sector, with global market volatility and high energy prices, is impacting Scotland's people, communities and businesses. This energy crisis has demonstrated how vulnerable our energy system is to international price shocks, as well as laying bare the need for structural reform of our energy system to ensure affordability for consumers. Whilst the Scottish Government does not have the powers to intervene in the energy markets to address these issues at source, we are taking action wherever we can to support those impacted through these difficult months. The delivery of this draft Energy Strategy and Just Transition Plan will reduce energy costs in the long term and reduce the likelihood of future energy cost crises.

It is also clear that as part of our response to the climate crisis we must reduce our dependence on oil and gas, and that Scotland is well positioned to do so in a way that ensures we have sufficient, secure and affordable energy to meet our needs, to support economic growth and to capture sustainable export opportunities. Unlimited extraction of fossil fuels is not consistent with our climate obligations. However, irrespective of the climate imperative, as an already established mature basin in gradual decline, planning for a just transition to our net zero energy system and securing alternative employment and economic opportunities for workers is essential if Scotland is to avoid repeating the damage done by the deindustrialisation of central belt communities in the 1980s, and to fully capitalise on our potential as a location for low carbon and renewable energy expertise.

For all these reasons, this draft Strategy and Plan supports the fastest possible just transition for the oil and gas sector in order to secure a bright future for a revitalised North Sea energy sector focused on renewables. This draft Strategy sets out policy positions on oil and gas, both offshore and onshore, and provides an opportunity for the public to give their views.

Scotland is at the forefront of the clean energy transition and Scotland's green jobs revolution is underway.

This draft Strategy sets out key ambitions for Scotland's energy future including:

• More than 20 GW of additional renewable electricity on- and offshore by 2030.
• An ambition for hydrogen to provide 5 GW or the equivalent of 15% of Scotland's current energy needs by 2030 and 25 GW of hydrogen production capacity by 2045.
• Increased contributions from solar, hydro and marine energy to our energy mix.
• Accelerated decarbonisation of domestic industry, transport and heat.
• Establishment of a national public energy agency – Heat and Energy Efficiency Scotland.
• By 2030, the need for new petrol and diesel cars and vans phased out and car kilometres reduced by 20%.
• Generation of surplus electricity, enabling export of electricity and renewable hydrogen to support decarbonisation across Europe.
• Energy security through development of our own resources and additional energy storage.
• A just transition by maintaining or increasing employment in Scotland's energy production sector against a decline in North Sea production.
• Maximising the use of Scottish manufactured components in the energy transition, ensuring high-value technology and innovation.

Through accessing global markets, Scotland can realise vast growth opportunities, including exporting our skills and knowledge in offshore energy and decommissioning. Fully realising these opportunities will require co-operation and action at a UK-level to facilitate smooth international trade, particularly in light of Brexit.

Recent global events have shown us how interconnected energy markets around the world are. To ensure we deliver climate-friendly, affordable and secure energy supplies here in Scotland, we must look to collaborate with others, particularly our neighbours around the North Sea, in creating mutual energy security and shared strategic advantage. The North Sea has the potential to be 'the battery for Europe' – we will look to work with others on how to realise this potential, and how best to create shared and mutually reinforcing systems and infrastructure.

This is also our first draft Just Transition Plan. Our draft Plan proposes a vision for a just energy transition that benefits communities and workers across Scotland, provides high-quality jobs and economic benefit, delivers affordability, and protects our environment and our energy security. This draft Plan is the result of collaboration between people from all parts of Scotland and all walks of life. We have highlighted how workers, businesses, communities and consumers have shaped this draft through our early co-design and set out the next steps in that process.

We will also show how this energy transition can lead to growth in employment in the sector through the development of new industries.

This draft Strategy and Plan presents the actions being taken by the Scottish Government under the current constitutional settlement. We have highlighted the key policy levers and decisions that are currently held by the UK Government and where, because of the reservation of powers to the UK Government, action is required by UK Ministers and regulators alongside that of the Scottish Government.

To ensure we succeed in delivering the level of ambition in this strategy within the current constitutional settlement, we need to work together with the UK Government. We invite the UK Government to work with us through establishment of an Energy Transition taskforce, to deliver tangible action to drive the energy transition.

Michael Matheson MSP: Cabinet Secretary for Net Zero, Energy and Transport

Richard Lochhead MSP: Minister for Just Transition, Fair Work and Employment