Infrastructure Investment Plan 2015: progress report for 2020 to 2021

Energy

Key achievements over last five years

Launched in 2015, the Low Carbon Infrastructure Transition Programme (LCITP), co-funded by the European Regional Development Fund, focused on supporting the acceleration of low carbon energy 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 aimed to stimulate commercial investment and maximise Scotland's vast potential in the low carbon sector whilst contributing to the positive progress in reducing Scotland's greenhouse gas emissions. LCITP has supported the co-development of over thirty proof of concept and development proposals for low carbon projects. Since its inception, LCITP has awarded over £52 million of grant funding to low carbon demonstration projects across Scotland, which encourage replication, and wider uptake of innovative renewable technology.

LCITP has also run a number of open funding invitations, including the Green Recovery: Low Carbon Energy Project Capital Funding. This LCITP funding invitation targeted £50 million of support for projects that demonstrate innovative low carbon heat solutions for buildings as well as proposals for integrated energy systems that support the ambitions for Scotland to achieve net zero emissions by 2045 and further catalyse economic recovery from the challenges imposed by the COVID-19 Pandemic.

Our flagship Community and Renewable Energy Scheme (CARES) provides loan and grant funding to community groups and organisations, rural SME's, and other eligible organisations seeking to explore their renewable energy options. CARES provides support to local and community renewable energy projects, which have the potential to reduce carbon emissions, create local jobs, upskill local people, reduce energy costs and overall allow greater investment in local economies. Since its inception, CARES has directly supported:

• Over 600 community and locally owned energy projects throughout Scotland to date (March 2021);
• Made available funding of up to £52 million (March 2021) in support of renewable and energy efficient projects;
• 87 island communities as at February 2021; and
• 43 operational shared ownership projects throughout Scotland under the current CARES contract.

The Scottish Investment Bank (SIB) has delivered the Energy Investment Fund (EIF) on behalf of Scottish Government since late 2012 (initially the Renewable Energy Investment Fund), providing flexible investments for energy projects and companies in Scotland to support Scotland's transition to a net zero economy. Since its launch, EIF has provided £90 million to 44 companies (ranging from £60,000 to £19.6 million) which has leveraged additional investment of c. £200 million and generated £31.9 million of income. The team has deployed £25.1 million into 26 projects community energy projects, which generated conservative forecasts of over £142 million of free income to community groups to invest in their local area addressing key issues such as fuel poverty, youth unemployment and improving local amenities.

Wave Energy Scotland (WES) is fully funded by the Scottish Government and delivered by Highlands and Islands Enterprise (HIE). It funds the development of disruptive technologies that will improve the performance and cost effectiveness of wave energy devices and is recognised as a truly innovative approach to pre-commercial procurement delivering both value for money and innovation. In total, almost £50 million has been invested in WES and it has seen 200 organisations from industry and academia across 13 countries collaborate on almost 100 projects. Two half-scale wave energy convertors from the programme will be deployed for testing in real sea conditions in Orkney in the summer of 2021, representing a significant milestone for the sector.

Scotland is home to substantial tidal energy resources and is among the world leaders in the tidal stream energy sector. The Scottish Government's £10 million Saltire Tidal Energy Challenge Fund was launched in February 2019, supporting the commercial deployment of tidal energy generation in Scottish waters.

Progress in 2020-21

The LCITP is due to be replaced in September 2021 and a Call for Evidence was launched in February 2021 seeking views on the support and interventions necessary to accelerate future deployment of low and zero carbon heat infrastructure projects in Scotland.

In 2020, the WES programme awarded £1.4 million to four projects developing quick connection systems to improve the installation efficiency and infrastructure of wave power devices.

In 2020, the Saltire Tidal Energy Challenge Fund supported the deployment of a subsea hub as part of Simec Atlantis Energy's flagship MeyGen project in the Pentland Firth. This innovation will facilitate the build out of the next generation of grid connected tidal turbines.

Activity going forward

By 2030, the Scottish Government aims to generate 50% of Scotland's overall energy consumption from renewable sources and by 2050 aim to decarbonise our energy system almost completely with renewable and low carbon energy proving the foundation of our future energy system with CARES supporting the delivery of the Scottish Government targets of 2GW by 2030.

Activities coordinated by the WES programme over the next five years will support the commercialisation of the technology developed under the programme to meet the needs of either utility scale project developers or alternative markets.

The Saltire Tidal Energy Challenge Fund has enabled Orbital Marine Power to manufacture in Scotland, its next generation technology. The O2, Orbital's first commercial turbine, is due to be installed and tested at the European Marine Energy Centre (EMEC) in Orkney by the summer of 2021.