Europe 2020: Scottish national reform programme 2017

Chapter 5: Climate Change, Low Carbon and Resource Efficiency

Scotland's Economic Strategy emphasises the importance of ensuring that Scotland protects and nurtures its natural resources and explores the opportunities offered by the transition to a more resource efficient, lower carbon economy.

This chapter sets out the activities being undertaken across Scotland in support of the transition to a low carbon, resource-efficient economy and the EU's flagship initiative, "Resource Efficient Europe".

Europe 2020 headline targets:

• Reducing greenhouse gas emissions by 20 per cent compared to 1990 levels (or by 30 per cent if conditions are right);
• Increasing the share of renewable energy sources in final energy consumption to 20 per cent; and
• A 20 per cent increase in energy efficiency.

Current Scottish Performance

The Scottish Government has established a range of targets which are focused on driving Scotland's transition to a low carbon economy. Scotland's current performance against these targets is presented in Table 4.

Table 4 - Current Scottish Performance Against Transition to a Low Carbon Economy Indicators

Indicator	Target	Current Level	Change Over Year	Reference Period
Greenhouse Gas Emissions [19]	Reduce emissions by at least 42% by 2020 and at least 80% by 2050, compared to a 1990 base year	45.8% reduction from 1990 to 2014, after taking account of trading in the EU Emissions Trading System ( EU ETS)	12.5% decrease in emissions, after taking account of trading in the EU Emissions Trading System ( EU ETS)	2014
Indigenous Renewable Energy Sources [20]	Generate the equivalent of 100% of gross electricity consumption from renewable sources by 2020	59.4%	9.5% pts increase	2015
Heat Demand [21]	11% of Scotland's heat demand from renewables by 2020	3.8%	1.1% pts increase	2014
Energy Efficiency [22]	Reduce final energy end-use consumption by 12% by 2020 (against a 2005-2007 baseline)	15.2% lower than baseline	3.0% pts decrease in consumption	2014

Scotland is performing well against each of its low carbon targets. As shown in Table 4, Scotland has exceeded its own 42 per cent greenhouse gas emissions reduction target six years early; Scotland has now exceeded its interim target to produce 50 per cent of its gross electricity consumption from renewable sources; final energy end-use consumption is decreasing; and the share of Scotland's heat demand from renewables is increasing.

Climate Change

In January 2017, the Scottish Government set out proposals in a draft Climate Change Plan ^[23] for meeting greenhouse gas emission reduction targets out to 2032 that represent a 66% reduction below 1990 levels ^[24] . It also published a full statement of its ambitious long-term vision of energy supply and use in Scotland, aligned with greenhouse gas emissions reduction, in a draft Energy Strategy ^[25] .

Both the Climate Change Plan and draft Energy Strategy are rooted in the ambition and vision of Scotland's Economic Strategy, and are designed to boost productivity and secure competitive advantage, protect and preserve Scotland's environment and deliver inclusive growth. The approach set out in these documents contains transformational outcomes in transport, heat, electricity generation, and energy efficiency along with increased natural carbon sinks and more efficient agricultural practices. They will shape action to deliver a modern, integrated, clean energy system, delivering reliable energy supplies at an affordable price, in a market that treats all consumers fairly; and a strong, low carbon economy - sharing the benefits across communities, reducing social inequalities and creating a vibrant climate for innovation, investment and high value jobs.

The Scottish Government will be outlining proposals in 2017 for a new Climate Change Bill that responds to the UNFCCC Paris Agreement with new, evidence-based, statutory emission reduction targets.

Opportunities From a Low Carbon Economy

The transition to a low carbon economy, as part of the drive to tackle climate change, has the potential to bring new economic, environmental and social opportunities to individuals, business and communities across Scotland.

Scotland is already capturing the economic benefits associated with this energy transition. Scotland is an internationally renowned centre for energy innovation and expertise with Scottish renewable energy business now working in more than 40 countries around the world. In 2015, low carbon industries and their supply chains in Scotland generated over £10.5 billion and supported 58,500 jobs.

As well as reducing emissions, increasing our energy supply from renewable and low carbon sources presents an opportunity to build upon Scotland's proud legacy of community energy projects. Community ownership of renewable schemes is delivering valuable local revenues to support a wide range of local needs. With a shift towards smarter, more local approaches to energy, the opportunity also exists to develop new local energy economies. This broadening in our approach to energy provision can help tackle some of Scotland's most pressing issues from security of supply, to demand reduction, making energy supplies more affordable to households and business and to stimulate regeneration and local economic renewal.

Maximising the Social and Economic Opportunities of Energy and Resource Efficiency

In June 2015 Scottish Ministers announced that improving the energy efficiency of all of Scotland's buildings will be designated a National Infrastructure Priority. Moving forward the cornerstone of the National Infrastructure Priority will be Scotland's Energy Efficiency Programme ( SEEP) which will provide an offer of support to buildings across Scotland - domestic and non-domestic - to improve their energy efficiency rating over a 15-20 year period. It will be an integrated programme of support for domestic and non-domestic buildings with a key role for partners in local government, housing associations, communities and the private sector. It will continue to provide support to households suffering from fuel poverty, and will also seek to leverage further private investment into improving energy efficiency to support the development of loan schemes to enable households and businesses who can afford to pay, to spread the upfront costs of investing in energy efficiency.

SEEP seeks to make Scotland's buildings warmer and easier to heat, as well as reducing their impact on the environment. It builds on a range of existing programmes which support households and organisations across Scotland to become more energy and resource efficient and to decarbonise heat. SEEP is a key part of Scotland's draft Energy Strategy, and the Scottish Government's efforts to tackle Climate Change and Fuel Poverty. SEEP's vision and aim is for Scotland's buildings to be near zero carbon by 2050; reducing the energy demand and decarbonising the heating of Scotland's built environment in a way that is socially and economically sustainable. The programme objectives are:

• By 2032 94% of non-domestic and 80% of domestic buildings' heat is supplied using low carbon heat technologies.
• By 2032 improvements to the fabric of non-domestic and domestic buildings results in a heat demand reduction of 10% and 6%, respectively.

Work on the programme is underway. During the first phase of the programme the Scottish Government is focusing on delivering existing programmes more effectively, developing new pilot schemes, to test integrated delivery mechanisms for the domestic and non-domestic sectors. We are supporting this work with investment of over £9 million to 11 local authorities to support pilots in 2016-17 to test different approaches to improving the energy efficiency of Scotland's buildings. In February 2017 the First Minister announced a further £11 million to support phase 2 of pilot activity. We are listening to a wide range of stakeholders as we design the new programme before launching the delivery phase in 2018, after powers over energy efficiency have been devolved.

The Scottish Government has allocated over £650 million since 2009 and, as set out in the 2016 Programme for Government, it will make available half a billion pounds over the next four years to tackle fuel poverty and improve energy efficiency. This means that by the end of 2021, the Scottish Government will have committed over £1 billion to making Scotland's homes and buildings warmer and cheaper to heat. The Scottish Government is now consulting on the design and delivery of the SEEP programme as part of its wider consultation on the draft energy strategy.

Box 2: Low Carbon Infrastructure Transition Programme ( LCITP)

The Low Carbon Infrastructure Transition Programme ( LCITP) has committed European funds to projects up until autumn 2018. The projects being funded support important economic, employment and social priorities. Until it is clear how negotiations with the EU are to progress, these important projects should continue.

LCITP is a collaborative partnership led by the Scottish Government, working with Scottish Enterprise, Highlands and Islands Enterprise, Scottish Futures Trust and Resource Efficient Scotland.

LCITP supports the acceleration of low carbon infrastructure projects across the public, private and community sectors to develop investment grade business cases to help projects secure public and private capital finance. The programme aims to stimulate commercial interest and investment and maximise Scotland's vast potential in the low carbon sector whilst contributing to the positive progress of the Scottish Government in reducing Scotland's greenhouse gas emissions.

LCITP launched the Standalone Low Carbon Energy Demonstrator Solutions Call in March 2016. The call supports projects that can demonstrate the commercial application of technologies which support decentralised and distributed low carbon energy solutions and energy security in Scotland. One project is currently being supported with capital funding under this Call.

The Transformational Low Carbon Demonstrator Invitation for Financial Support was launched on 10 July 2016, designed to encourage innovation of both design and business models, along with aggregation at scale and acceleration of large scale transformational low carbon infrastructure projects in Scotland. The Invitation made available up to £20 million per project, up to a maximum of 50% of the project's capital expenditure. Successful projects will be announced in May 2017.

LCITP launched the Innovative Local Energy Solutions Invitation for Funding in March 2017. This invitation has been designed to support and accelerate the development and delivery of innovative, local low carbon energy opportunities across Scotland. In particular, the invite aims to support solutions in rural and remote parts of Scotland, smaller towns and settlements, and areas that are off gas grid. Successful applicants will be notified of the outcome of their application for LCITP support during summer 2017.

LCITP Case Study - West Harris Trust: Pairc Niseaboist Community Energy Project

Background

The Isle of Harris is located in the North West corner of the group of Islands known as the Outer Hebrides or Western Isles on the West Coast of Scotland. West Harris Trust ( WHT) is a community charity responsible for managing 7225 hectares of land on the west side of Harris. The key aims of the Trust are to revitalise the community by attracting new residents and creating new housing and employment opportunities; create environmentally sustainable energy for the community via small hydro and micro-wind projects; and conserve and increase understanding of the natural and cultural heritage.

Map showing boundary of WHT land - photo source: WHT.

Project Drivers and Anticipated Benefits

The Trust is delivering an exciting project to West Harris - the Community Enterprise Centre Project at Pairc Niseaboist, Horgabost. The project will help to reinvigorate the West Harris community via the provision of new business, tourism, social and housing opportunities. This signature development will create a community hub and reflect the aspirations of West Harris for a vibrant and sustainable future. This development includes a local energy system, along with private and third sector partners Albatern and Hebridean Housing Partnership ( HHP), as part of the overall development, with the installation of a wind turbine and smart management system on site to power the enterprise project.

The Pairc Niseaboist Community Energy Project aims to put in place a sustainable energy generation, storage and consumption system. The Western Isles suffers from severe grid constraints limiting the ability of communities and business across the islands to export the valuable renewable resources available to them.

For this reason the goal for this project is to create a resilient self-sustaining local energy economy incorporating a 70-100kW wind turbine and potentially, in the future, a 45-75kW wave energy array. It is envisaged that the settlement will be capable of maintaining a continuous energy supply - and provide a resilient community hub - during times of grid constraint and/or power outage from the grid. The project will produce renewable energy at an affordable cost from locally available wind (and potentially wave) resources to power the new Community Enterprise Centre, and six new social housing units with a further four plots with extremely low greenhouse gas emissions and zero from device operation.

Project Development/Technical Solution

The first phase of development for this project sought to explore initial feasibility of the project scope and to develop an outline business case for taking the project forward; as well as looking to gain a deeper understanding of the distributed energy challenges in a remote area and seek to apply renewable energy generated at a local level successfully into the local distribution network; and reduce reliance on high carbon generation supplied through the existing grid. This support enabled the project to develop an initial strategy for development of the next stages of the project and allow financial, technical and legal feasibility to be confirmed.

The work that was taken forward demonstrated that the project was feasible. The energy management study has shown that the proposed 100kW wind turbine with 50kW export connection can supply power to the various site users with import required from the grid during low wind periods and an energy store during periods of sustained high output. A battery storage system would not be appropriate for financial and technical reasons. However it was identified that a mini district heating system using hot water or a storage heater system managed by a central control mechanism in the community building could enable supply and demand to be more evenly matched.

The second phase of the project built on the results of the energy management study to commission the necessary detailed design work for a mini district heating system and private electricity supply from the wind turbine (and potential wave array) to the HHP new social housing development. The project is underway, with the installation of the wind turbine now complete, and the final touches being made to the completion of the HHP social housing development and community centre.

Project nearing completion - photo source: WHT.

Project Funding/Support

The development work for the project is being supported through the European Regional Development Fund - the LCITP (for which Highlands & Islands Enterprise is a delivery partner in the Highlands & Islands region), WHT, HIE and Albatern.