Scotland and the sustainable development goals: a national review to drive action

7 Affordable and Clean Energy

• Environment
• Fair Work and Business
• Children
• Poverty
• Communities

We believe Scotland should be a world leader in affordable and clean energy. This ambition is shared across the public, private and third sector, and is being advanced through legislation, local and central government policy, community action and a focus on corporate sustainability.

Our ambition is illustrated in the Scottish Government’s Scottish Energy Strategy, which recognises that Scotland’s social and economic wellbeing, and the sustainable productivity and competitiveness of our economy depend on secure and affordable energy supplies. Published in December 2017, the Scottish Energy Strategy supports Scotland’s climate change ambitions and sets out our vision for a flourishing, competitive local and national energy sector, delivering secure, affordable, clean energy for Scotland’s households, communities and businesses. At the heart of the strategy is a commitment to “promote consumer engagement and protect consumers from excessive or avoidable costs, prevent new forms of social exclusion and promote the benefits of smarter domestic energy applications and systems”. In short, it reinforces our committed to delivering a people-centred energy transition shaped by and for the people of Scotland.

The strategy focuses on the need for an inclusive transition to our low-carbon future, and sets two ambitious targets for 2030:

• The equivalent of 50% of Scotland’s heat, transport and electricity consumption to be met from renewable sources
• An increase of 30% in the productivity of our energy use across the Scottish economy

Other targets for 2020 are:

• 100% of electricity demand to come from renewables
• 11% non-electrical heat demand to come from renewables
• 12% reduction in energy consumption
• 10% share of renewable fuels in transport petrol and diesel consumption

Renewable energy (targets 7.2, 7.3)

Scotland is uniquely well placed by European, and even global standards, as a natural resource base for renewable energy. While our wet and windy weather may require a more than desirable use of umbrellas and waterproof jackets, it does provide perfect conditions for wind, tide and wave technologies. This, along with our strong, nation-wide and cross-sectoral commitment to developing these technologies has provided the necessary momentum for moving forward our ambitious renewable energy agenda.

We are committed to ensuring that renewable and low carbon energy will provide the foundation of our future energy system. This offers us a huge opportunity for achieving clean economic and industrial growth. To achieve this we are promoting and exploring the potential of Scotland’s renewable energy resource and its ability to meet our local and national heat, transport and electricity needs, whilst also contributing to meeting our ambitious emissions reduction targets. By 2030 we aim to generate 50% of Scotland’s overall energy (heat, transport and electricity) consumption from renewable sources, and by 2050 we aim to have decarbonised our energy system almost completely. Meeting our long term climate change targets will require the near-complete decarbonisation of our energy system by 2050, with renewable energy meeting a significant share of our needs. The Scottish Energy Strategy target builds on the previous target we set in 2009, which required 30% of Scotland’s heat, transport and electricity needs to be met by renewable sources.

The Data Picture: Energy from renewable sources

Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.

The percentage of energy consumption which is renewable energy has increased steadily in Scotland over time, with 21% of Scotland’s heat, transport and electricity consumption met by renewable sources in 2018.

Line graph showing the proportion of energy consumption which is renewable energy in Scotland has increased over time from a starting point of 15% in 2014, with all years showing an increase except for a dip in 2016 (16%) which was lower than 2015 (17%) before rising again to 21% in 2018.

Source: Department for Business, Energy and Industrial Strategy (BEIS)

We have made good progress to date, with the equivalent of 20% of energy consumption being met by renewable sources in 2017. Reaching the 50% target by 2030 will be challenging, particularly in more uncertain market conditions compared to those in the preceding decades, and due to the fact that not all the relevant policy levers are devolved to Scotland. But the target demonstrates our commitment to a low-carbon energy system and to the continued growth of the renewable energy sector in Scotland. It also underlines our belief in the sector’s ability to build on its achievements and progress so far.

Scotland’s renewable electricity capacity has also shown steady growth over the last few years with the average annual capacity increase over 712MW since the end of 2008. In 2018, 75% of Scotland’s electricity demand was from renewables and 6% of non‑electrical heat demand was from renewables.

The Data Picture: Electricity consumption and renewables output

Target 7.2: By 2030, increase substantially the share of renewable energy in the global energy mix.

The share of renewable electricity has increased since 2009 with 75% of Scotland’s electricity consumption provided from renewables in 2018.

Gross electricity consumption and percentage renewables output, 2009 to 2018

Graph with columns showing both the total electricity consumption in Scotland and the proportion of it which is renewable between 2009 and 2018. Total electricity consumption has dropped slightly over time, with some variation between years, while the proportion of consumption which is renewable has risen from 27% in 2009 to 75% in 2018, increasing year-on-year for all but two years in the series.

Renewable electricity in Scotland, Wales, Northern Ireland and the regions of England, Energy Trends, BEIS

Electricity generation and supply figures for Scotland, Wales, Northern Ireland and England, Energy Trends, BEIS

We are also committed to building Scotland’s reputation internationally for excellence in energy. We are keen to continue forging collaborative partnerships with other countries, supporting the internationalisation pillar of Scotland’s Economic Strategy and to help meet the aims of our international policy statement and international framework.

Current actions to support low-carbon energy include:

• Establishing the Energy Investment Fund that will invest £20 million in low-carbon energy infrastructure
• Promoting the development of onshore wind in Scotland and across the UK
• Working with partners to develop offshore wind opportunities
• Supporting the marine energy sector and tidal innovation through the £10 million Saltire Tidal Energy Challenge Fund
• Making it easier to invest in local and small-scale renewables
• Developing a bioenergy action plan through research and working with partners
• Investing £60 million in the Low Carbon Infrastructure Transition Programme (LCITP)
• Leading the low carbon transport transition by promoting the use of ultra low emission vehicles and removing barriers to their use
• Exploring the potential for geothermal energy in Scotland
• Obliging suppliers to source more electricity from renewable sources via the renewables obligation

The Scottish Government is investing a further £2 million in 2018-19 to support innovation and help reduce the cost of offshore wind. We are consulting on a new Sectoral Marine Plan identifying future locations for large-scale offshore wind developments.

Community energy has also become an important component in our renewable energy revolution. More and more communities across Scotland are realising that generating their own electricity can have great advantages.

Closer Look - Fintry wind turbine

Fintry in rural Stirlingshire, Scotland, has embraced renewable energy for a more sustainable future for their village. To fight fuel poverty and a reliance on carbon intensive heating systems, Fintry became the first village in the UK to enter a joint-venture agreement with a wind farm developer that secured a wind turbine for the community. From the income stream the turbine generates, Fintry has given free insulation to more than half of all households in the village and is now embarking on new ambitious projects to eventually make the village carbon-neutral. They community has also overseen further projects such as the installation of micro-renewable heating systems, planting a community orchard, and opening a woodland learning area for the local primary school.

Additionally, the solar market is making progress with reductions in technology costs and advances with, for example, the integration of wind and solar output from season to season leading to increased investment opportunities. While solar farms around the UK have historically been established by smaller energy firms and community groups, the entrance of large energy suppliers such as ScottishPower should provide momentum and new life to the sector in Scotland.

The Ocean Energy Scale-up Alliance funded by the North Sea Region Interreg programme brings together expertise from six countries, to accelerate the deployment of marine energy technologies. This includes the deployment of pilots from Tocardo Tidal Power, a tidal energy company; wave energy companies Seabased and NEMOS; Floating Power Plant which is developing a hybrid platform combining wind and wave resources; and floating wind developer SeaTwirl. The Scottish partner in this project is the European Marine Energy Centre (EMEC).

Closer Look - Scottish Power

Scottish Power is the first integrated energy company in the UK to generate 100% green electricity, following the sale of their remaining fossil fuel generation. Their focus is on wind energy, smart grids and driving the change to a cleaner, electric future. Scottish Power’s commitment to generate 100% green energy makes a big impact on delivering the Scottish Energy Strategy. The organisation supports Offshore Wind Sector Deal with pledge to build more offshore wind turbines. It plans to engage with the Crown Estate and the Crown Estate Scotland on seabed leasing and to bring £2 billion clean energy investment in 2019 and £6 billion by 2022. ScottishPower is also creating 150 new jobs in the UK renewables sector in just 2019. Their investment plan will support 300 new Scottish Power jobs in 2019.

Many businesses across Scotland are also looking at how they can realign their energy consumption to improve their carbon footprint and make the most of the commercial opportunities associated with ecologically progressive practices.

Closer Look - Scotch Whisky industry

Export sales of Scotch Whisky are important to the UK economy, amounting to £4.7 billion in 2018, that is 20% by value of all the UK’s food and drink exports. The product’s reputation for premium quality is closely linked to its ecological integrity and raw materials such as barley and water. In 2009, the sector’s membership body, the Scotch Whisky Association, announced an environmental strategy committing to sourcing 20% of primary energy requirements from non-fossil fuel sources by 2020 and 50% by 2050 – from a baseline of 3% in 2008. They passed their 2020 target four years ahead of schedule. Over £160 million was invested in renewables between 2008 and 2015, a figure second only to the utilities sector. This commitment to SDG target 7.2, increasing the share of renewable energy, will continue to lower carbon emissions and generate investment and job opportunities in future years.

Closer Look - Scottish Environment Protection Agency

SEPA (Scottish Environment Protection Agency) co-hosted the first in a series of Scottish round table events in collaboration with the UN Environment Programme Finance Initiative, a global partnership between the United Nations Environment Programme and the financial sector to promote sustainable finance. The Association of British Insurers is also partnering with SEPA to co-host the events, which explore how Scotland can meet the UN’s global SDGs through low carbon and renewable energy investment at national and local levels. Businesses, institutions, non-governmental bodies and influential representative bodies are attending the round tables, which focus on the significant low carbon and renewable energy investment opportunities and how to overcome investment challenges. The 2018/19 round tables will culminate in a two-day working event in autumn 2019. The aim is to identify and launch initiatives and actions that could ultimately drive billions in investment in low carbon and renewable energy solutions in Scotland.

Action is not just confined to the private sector, and public sector organisations across Scotland are investing in the renewable energy agenda. For example, Scottish Natural Heritage, supports the renewables sector by helping decision makers achieve the right development in the right place, and to balance the needs of energy generation and transmission with community and society interests and the environment. Their support cuts across the whole of the renewables industry including wind energy (onshore and offshore), solar, hydro, biomass and the required transmission.

Closer Look – Dawyck Garden

The Royal Botanic Garden Edinburgh’s Dawyck Garden has instituted a number of changes to increase the Garden’s environmental credentials and is the first carbon neutral botanic garden in the UK. Dawyck has a hydro-electric scheme which provides enough energy for the Garden’s Visitor Centre and sells surplus back to the Grid. The Centre’s heating is provided by a sustainable biomass boiler, and it has a green roof, providing insulation and temperature regulation.

Higher and further education sectors are also important actors. Carbon emissions from Scottish universities have declined only slightly in recent years (from 398,017 tCO₂ in 2015 to 380,014 tCO₂ in 2016), despite the fact that the sector has made considerable progress in energy efficiency. A key underlying issue is that the higher education sector is successful and expanding in Scotland with new research facilities being commissioned, and increasing numbers of international students travelling to Scotland to study. While both of these trends can be said to help achieve the SDGs, for example, in relation to sustainability research and access to education for developing world students, the sector will find it hard to meet carbon reduction targets without national interventions. Actions along these lines could include de-carbonisation of the power supply, large-scale deployment of carbon capture and district heating technologies, carbon off-setting schemes.

Closer Look - University Carbon Reduction Programme

In 2018 SFC provided £16.189 million of interest-free loans to Scottish universities for 15 projects to reduce their carbon footprint. In total, these projects will save 9,322 tCO₂ annually. These projects relate to SDGs 7, 9 and 13.

This kind of funding enables institutions to progress their carbon management plans and in some cases has supported renewable energy projects of significant scale. However, it remains challenging to catalyse more strategic carbon reduction projects (e.g. district heating), which often require longer‑term planning and engaging with multiple partners.

Energy efficiency (targets 7.2 and 7.3)

Heating and cooling Scotland’s homes and businesses costs £2.6 billion a year and accounts for approximately half of Scotland’s greenhouse gas emissions. Energy efficiency in this area is therefore crucial to achieving Goal 7. Using the Government’s Standard Assessment Procedure (SAP) 2012, which is the most up-to-date methodology for assessing energy efficiency, estimates from the most recent Scottish House Condition Survey, show that in 2017 42% of dwellings had an Energy Performance Certificate (EPC) of C or higher. This is 3% higher than in 2016, and 7% higher than in 2014, so we continue to make good progress.

Through the Energy Efficient Scotland programme our aim is to maximise the number of homes achieving EPC Band C by 2030 through targeted support and enabling action, with all homes to reach EPC C by 2040, and even more ambitious targets for households in fuel poverty and for social housing. The Scottish Government have also recently consulted on the impact of bringing forward the date of the long term target for homes from the current date of 2040. They will consider the responses with partners in local government and look at where we can move faster whilst supporting a Just Transition to a low carbon economy across Scotland. To drive progress, the Scottish Government have already introduced regulation in the social housing sector, from April 2020 in the private rented sector, and will be consulting soon on regulation in the owner occupied sector. So although there may be fewer ‘easy wins’ in future, we are keeping up the momentum in Scotland through this approach and through ongoing significant investment and delivery programmes.

To support this the Scottish Government has launched a 20-year delivery programme – Energy Efficient Scotland – to improve the use and management of energy in Scotland’s buildings and help decarbonize heat supply, which is designed and delivered in strong partnership between the Scottish and local government. The Energy Efficient Scotland programme builds on existing legislation and programmes that are already supporting the improvement of the energy efficiency of homes, businesses and public buildings, as well as the work we are doing with local authorities to develop Local Heat and Energy Efficiency Strategies (LHEES).

Energy Efficient Scotland is a strategic partnership with local and national government in Scotland which has from the start identified the importance of strategic planning for Energy Efficient Scotland at local and national levels across the 20 years of the programme. Given the need for strategic planning to take place from the outset, detailed consultation around the proposals for LHEES were undertaken and LHEES have been established as the foundation on which the programme is being delivered at a local level. The launch of Energy Efficient Scotland sees us continuing to integrate and streamline our existing support over the next two years of the programme’s transition phase. Energy Efficient Scotland actions include:

• transition programme plan
• long term plan
• pilot projects
• monitoring and evaluation
• user guides for homeowners, landlords and tenants
• international collaboration
• Energy Performance Certificates (EPCs)

In addition to the measures above, the programme is continuing to invest in Area Based Schemes that support local energy efficient measures to lift people out of Fuel Poverty. It is based on the Area Based Programmes, which have seen energy efficiency measures rolled out across whole neighbourhoods, alongside area regeneration.

Our Resource Efficient Scotland (RES) programme is supported by Scottish Government Energy and Climate Change and Zero Waste teams, with match funding from European Regional Development Funds (ERDF). The programme offers technical advice and support, as well as funding, to small and medium enterprises (SMEs) on both energy and resource efficiency. Lifetime energy and carbon savings from this programme are quantified annually. For 2015-17, the lifetime impact of RES was 500,000 MWh of energy savings, 70,000 tonnes of waste and material savings, over 300 000 tonnes CO₂ equivalent savings (measured on a consumption basis), and cost savings to supported organisations of over £50 million. Many of these savings are supported by ERDF funding.

Other Zero Waste Scotland programmes have the potential to contribute to this Goal in future – for example there is an option for programmes focused on construction and procurement to consider future “in use” energy efficiency at the design, specification, and build stages. The economic and competitive benefits of resource efficiency measures are also captured in our evaluations.

Previous regulatory intervention in the reserved energy sector have not resulted in a well-functioning, competitive market which benefits all consumers. That is why in Scotland we continue to advocate to the UK Government and Ofgem on much need reform. The 2016 package of reforms set out by the Competition and Markets Authority was designed to open up competition and help consumers get a better deal, with many of the remedies transitional pending the rollout of smart meters by 2020. However, the success of reforms has not been consistent across the UK, for example, connectivity and technical metering issues are delaying the smart meter rollout in Scotland.

In May the Scottish Government published the Energy Consumer Action Plan which establishes a framework to place consumer considerations at the heart of Scotland’s energy policy and influence change across GB. The plan encourages consumers to help shape how Scotland moves towards affordable clean energy. Actions include a commitment to:

• Establish an independent Consumers Commission “to give consumers a more powerful voice” in Scotland and Britain’s energy policy and the development of a charter committing signatories to address consumer issues
• Introduce a duty on public authorities to place people’s interest at the heart of policy and regulatory decision making and invest in supporting new approaches to tackle energy affordability through a new Improving Consumer Outcomes Fund
• Explore ways to provide more holistic support to vulnerable energy consumers, including making it easier to access priority support and providing more help for consumers with energy debt

Decarbonising heat and energy efficient buildings (targets 7.1, 7.2 and 7.3)

Heating our homes and businesses makes up a significant part of our energy consumption and greenhouse gas emissions in Scotland. Decarbonising heat by reducing and eliminating the greenhouse gases emitted during its generation and use, is essential to meeting our climate change ambitions. The Heat Policy Statement which was published in 2015, set out three objectives for decarbonising heat:

• Reducing the need for heat
• Supplying heat efficiently at least cost to consumers
• Using renewable and low carbon heat

We are working to decarbonise heat in Scotland by investing in the things which we can control such as:

• Improving heat efficiency, including reducing demand and supplying it more cost-effectively
• Supporting low-carbon heat solutions in individual buildings off the gas grid or heat networks where appropriate

In areas outside our control, including decarbonising the gas grid, we are working with the UK Government and our partners to determine the best route.

The Scottish Government’s Low Carbon Heat team are playing a key role in scoping the opportunities for, and advising on the technical options to implement, district heating schemes in Scotland, and in furnishing evidence to support policy development. A Heat Network Partnership was established in 2013 to provide coordinated support for district heating, and to develop a district heating strategy programme for local authorities to help accelerate the growth of heat networks. The network is championing efforts to improve the efficiency with which heat is supplied to Scottish homes and businesses. More than 70 public bodies are working to provide the Scotland heat map, a tool for identifying heat supply and demand opportunities across Scotland. The map can be used to:

• Identify where there are opportunities for heat networks
• Assess heat density and proximity to heat sources

The heat map, which is shared with every local authority in Scotland via the Scotland heat map framework and which helps them plan district heating and identify unused excess heat, is updated every year using annual building energy data submitted by public bodies.

Work is also underway to reduce demand for heat by improving the energy efficiency of buildings. Our target is that, by 2040, all Scottish homes will have an Energy Performance Certificate (EPC) rating of band C where technically feasible and cost effective, and all non-domestic buildings will have their energy efficiency improved to the extent that it is technically feasible and cost effective. By 2032, we aim to reduce residential heat demand by 15% and non-residential heat demand by 20% by improving the fabric of Scotland’s buildings and ensuring they are insulated to the maximum appropriate level. This is being achieved through a number of schemes:

• Transition Programme Decarbonisation Fund
• Energy Efficiency Transition Programme
• Local Heat and Energy Efficiency Strategies (LHEES)
• District Heating Loan Fund

We have set standards for energy efficiency in social housing and in private rented housing, and offer schemes to support people in fuel poverty to make their homes more energy efficient (home energy and fuel poverty policy). The Energy Efficient Standard for Social Housing (EESSH) was introduced in March 2014 and aims to encourage landlords to improve the energy efficiency of social housing in Scotland. This supports the Scottish Government’s vision of warm, high quality, affordable, low carbon homes and a housing sector that helps to establish a successful low carbon economy across Scotland. The EESSH sets a milestone for social landlords to meet for social rented homes by December 2020, based on minimum Energy Efficiency (EE) ratings which vary depending on the type of property and the fuel used to heat it (broadly EPC Band C or D). The rate of compliance with the standard is 80% (2017/18), with attainment of EESSH projected to reduce carbon output by 760Kt per annum from the social rented sector. A new post-2020 standard (EESSH2) was confirmed in June 2019, for all social housing to meet, or be treated as meeting, EPC Band B (EE rating), or to be as energy efficient as practically possible, by the end of December 2032 and within the limits of cost, technology and necessary consent. It has also been confirmed that no social housing is to be re-let below EPC Band D from December 2025, subject to temporary specified exemptions. Landlords, including local authorities as larger social landlords, have made significant investments to meet the EESSH, with total investment over £300 million since 2015/16.

The Low Carbon Infrastructure Transition Programme (LCITP) was also launched in March 2015, in partnership with Scottish Enterprise, Highlands and Islands Enterprise, Scottish Futures Trust, the Scottish Government, and sector specialists. The LCITP has been awarding funds backed jointly by the EU and Scottish Government. There are four large scale district heating projects which are currently in the construction and commissioning stages in Fife (£8.5 million), West Dunbartonshire (£6 million), Stirling (£2 million) and Dundee (£2.9 million). Scotland also has a Memorandum of Understanding with Denmark on cooperation covering the decarbonisation of heating systems, district heating, and energy efficiency in buildings, and we have used this relationship to further knowledge exchange.

There are approximately 200,000 non-domestic buildings in Scotland, and these vary widely in terms of construction, size, and use. The diverse nature of non-domestic buildings means we know less about their energy performance compared with those in the domestic sector. As of July 2017 there were around 30,000 non-domestic buildings with an EPC assessment. Scotland has energy efficiency standards in the non-domestic sector as well as energy efficiency standards in the public sector. Given the wide variety of building size and use in the non-domestic sector, we have proposed to move to a benchmarking system in Scotland for assessing energy efficiency. Views were sought on this in February 2019 through the Energy Efficient Scotland consultation.

We also proposed to build on the current Non-Domestic Energy Efficiency (NDEE) regulations under the Climate Change (Scotland) Act. These currently only apply to buildings over 1,000m2, and buildings can defer improvement by reporting their energy use. By 2040 we aim to have extended the regulations to all non-domestic buildings, and for them to be improved to the extent that this is technically feasible and cost effective. The regulations will be phased in so that they are extended to progressively smaller buildings over time.

Further consultation on plans for the non-domestic sector will be undertaken in 2019 to inform proposals for this sector by 2020, ahead of new regulations commencing in 2021. Proposals will focus on our advice and support services, as well as Resource Efficient Scotland, Local Energy Scotland, and the public-sector NDEE Project Support Unit, who together provide advice and project support to SMEs, communities, and public sector organisations. A guide on improving energy efficiency within SMEs has been produced, Energy Efficient Scotland user guide: small and medium enterprises.

Industrial energy efficiency (targets 7.1, 7.2, 7.3)

In our efforts to improve Scotland’s overall energy efficiency, it is essential that we engage with the industrial and commercial sector which accounts for around 40% of total final energy consumption in Scotland. Given this, we aim to improve industrial and commercial energy productivity by at least 30% by 2032, through a combination of fuel diversity, energy efficiency improvements and heat recovery. Work with Scottish industry includes the eight most Energy Intensive Industries (EII) – cement, ceramics, chemicals, food and drink, glass, iron and steel, paper and pulp, and oil and gas refining – to overcome the challenges associated with investing in energy efficiency or decarbonisation measures.

Supporting industrial energy efficiency is a key priority in the Scottish Manufacturing Action Plan, the Energy Strategy and the Climate Change Plan. Our understanding is that greater energy efficiency can have many benefits for industry, such as:

• Reduced operating costs
• Protection against energy price rises
• Additional income streams such as through the recovery or use of captured excess heat

However, investing in energy efficiency measures presents challenges to industry. Payback periods for equipment or technology are often considered too long, and business cases for greater efficiency may struggle to gain board approval due to the multinational nature of many companies.

Given that the industrial sector accounts for more than half of Scotland’s exports and sustains many high-value jobs, it is however, crucial that we support rather than force industry to save energy. We are developing a coordinated approach to incentives for Scottish industry to make their processes more energy efficient and to discourage them from relocating to countries with less stringent energy regulations (known as carbon leakage).

To achieve this we are engaging with industry to:

• Build industrial cross-sector working that includes trade associations from the EII sectors and Scottish site representatives
• Raise awareness of existing energy efficiency advice and support for industry
• Gain detailed insight into investment barriers and work together on how to overcome them
• Examine the roles of government, agencies and industry to collectively achieve greater industrial energy efficiency

Scottish Ministers chaired an EII roundtable in November 2017 to build an effective platform for engagement and collaboration with stakeholders in Scotland. Feedback from the roundtable directly influenced the industrial part of Scotland’s Energy Strategy, published on 21 December 2017. Workshops were subsequently held with a range of industrial stakeholders during 2018. These events allowed us to gather evidence on the nature of Scotland’s industrial landscape including the challenges and opportunities for decarbonisation, which include:

• The cost of energy (including as a result of policies on renewables)
• Re-using excess heat so that industrial process become more efficient or emit less carbon
• Unattractive payback periods on measures so investment is diverted to other areas
• Limits to growth, change or decarbonisation due to network infrastructure

A paper on decarbonisation and energy efficiency in the industrial sector that summarises our engagement with industry to date has been published. This outlines the identified barriers to investment in decarbonisation, references the support currently available and proposes next steps to create an improved Scottish support framework. Discussions on how to overcome barriers to investment with Scottish energy intensive industry stakeholders are taking place through 2019.

Carbon Capture Utilisation and Storage (CCUS) and the hydrogen economy is a further area which is relevant for industrial decarbonisation, and where there is interest among sectors in Scotland. Work across teams and agencies is being undertaken on this and industrial stakeholders will be invited to be part of these discussions.

Transport and clean energy (targets 7.1, 7.2, 7.3)

Transport Scotland is the national transport agency for Scotland. It oversees the operation and improvement of the transport networks, concessionary and accessible travel schemes, traffic and travel information, and promotes sustainable transport and active travel to reduce carbon emissions and improve public health. The organisation also supports the National Transport Strategy which determines our vision for transport in Scotland over the next 20 years. Transport Scotland had a budget of nearly £2.4 billion in 2017 to 2018 and its priorities for delivery are:

• Improved connections across Scotland
• Increased safety and more innovation
• Continuously improved performance
• Better journey times
• Better reliability
• Greener transport alternatives
• Reduced emissions

These aims provide a clear focus to support the development and delivery of efficient, effective and sustainable transport infrastructure and services for Scotland.

The protection and enhancement of our natural environment should be an important aspect of all transport projects in Scotland. In recognition of this Transport Scotland is undertaking work on:

• Air quality - minimising environmental impacts by measuring, monitoring and managing transport impacts on air quality
• Low Emission Zones - transforming towns and cities into cleaner, healthier places to live, work and visit
• Carbon reduction on roads - aiming to reduce carbon emissions from the road transport sector
• Climate change - aiming to reduce greenhouse gas emissions wherever practicable from our operations, projects and maintenance activities.
• Landscape and biodiversity - acknowledging and respecting our country’s remarkable landscape and wildlife
• Sustainability - using the Civil Engineering Environment Quality Assessment and Award Scheme (CEEQUAL) on a number of transport infrastructure projects

However, as the data below shows, the challenge remains to reduce our overall transport emissions as well as the relative balance of contributions across the different forms of transport.

The Data Picture: Transport emissions

Transport (including international aviation and shipping) accounted for 14.9 million tonnes of carbon dioxide equivalent, representing 37% of net greenhouse gas emissions allocated to Scotland in 2017. Within transport emissions, road accounts for the largest proportion (10.2 million tonnes of carbon dioxide equivalent). Transport’s percentage share of total net emissions has increased in recent years as non‑transport emissions have fallen.

Line graph showing the proportion of Scotland's total net greenhouse gas emissions that arise from transport. This figure increases consistently over time from 27% in 2013 to 37% in 2017.

Source: Scottish Transport Statistics 2019 Edition

Since 2011, the number of Ultra Low Emission Vehicles (ULEVs) in Scotland has increased from less than 500 to over 10,000 - an increase of over 2000%. By 2017, a distance of almost 40 million miles had been travelled in electrically charged vehicles in Scotland: the equivalent of going to the moon and back 95 times.

As well as investing £15 million to add an additional 1,500 new charge points in homes, businesses and communities including 150 new public charge points, over 1,200 people have received one of our interest free loans to help purchase a low emission vehicle. We now have one of the most comprehensive charging networks in Europe with Charge Place Scotland (CPS) providing a single network operator for the whole country: a unique asset for Scotland’s increasing community of ULEV owners. Our programme of investments since 2012 means that the number of public charge points on the CPS network has grown to almost 1,000. The network has been used over 1.5 million times since 2011, with the average distance between charge points in Scotland at just over two miles. We are supporting sustainable charging options by installing charge points at park and rides, transport hubs and providing charging infrastructure for taxi owners switching to ULEV.

Across Scotland’s public sector, we are supporting a transformation in the use of ULEVs, with the total number in Scotland’s public fleets now over 1,000. This assists with reducing air pollution in cities and displacing our reliance on fossil fuels.

Transport Scotland is also committed to increasing levels of cycling and walking for transport and leisure in Scotland. This is being achieved in part through Walking and Cycling: Developing an Active Nation which includes an active nation commissioner for Scotland and close working with partners and local authorities to deliver the Active Travel vision, underpinned by the Cycling Action Plan for Scotland and the National Walking Strategy. Funding for projects throughout Scotland are designed to improve our public spaces, such as creating segregated walking and cycling lanes and safer junctions and crossings. Transport Scotland also supports educational and behaviour change projects, making walking and cycling the easy choice for everyday short journeys.

Transport Scotland is also committed to encouraging more people to make active travel choices for short everyday journeys wherever possible, to improve health, wellbeing and the environment. Our long term vision sets out how Scotland will look in 2030 if this is achieved. Linked to this vision are the National Walking Strategy, the Cycling Action Plan for Scotland 2017-2020 and the Active Travel Task Force report which makes suggestions for overcoming barriers to the delivery of innovative and new walking and cycling infrastructure. Transport Scotland’s work to develop an Active Nation encompasses actions in this area. The Scottish Government doubled the already record level of investment in walking and cycling from £39.2 million in 2017-18 to £80 million per year in 2018-19. Much of this budget is allocated to active travel delivery partners who work across Scotland delivering projects that will get more people walking and cycling for shorter everyday journeys. These partners in turn distribute much of this funding to local authorities, community groups, third sector groups and others.

Fuel poverty (targets 7.1)

Scotland has introduced world leading legislation to tackle Fuel Poverty. The Fuel Poverty (Target, Definition and Strategy) (Scotland) Act sets a target relating to the eradication of fuel poverty; creates a new definition of fuel poverty which more closely aligns with income poverty; mandates the preparation of a new, long term fuel poverty strategy and makes provision for reporting on fuel poverty. The ambitious target set by the Act is that, in the year 2040, no more than 5% of households in Scotland are in fuel poverty; no more than 1% are in extreme fuel poverty; and that the median fuel poverty gap of households in fuel poverty in Scotland is no more than £250 in 2015 prices before adding inflation. Within this ground-breaking legislation, Scotland is one of the few countries in the world to define fuel poverty, let alone set a target which, if achieved, will go a long way towards eradicating it. The achievement of this target is closely connected to Scotland’s delivery on SDG 7.3, because low energy efficiency is one of the key determinants of fuel poverty. The policy is supported by the Scottish Government national fuel poverty programme, Warmer Homes Scotland. In 2017/18 4,903 households received assistance, each of them saving on average £318 per year off their energy bills.

Challenges and next steps

It is clear that Scotland is uniquely well placed in terms of our natural, knowledge and skills environment to become a world leader in renewable and clean energy. We also have the political will and leadership across the sectors to set and drive an ambitious programme of reform. However, despite Scotland’s commitment to renewable energy, and wide spread public support for on-shore wind, the cheapest form of renewable energy, UK energy policy prevents a route to market for further expansion. Finding a path through these and other constitutional, resource, commercial, cultural and behavioural barriers to progress has taken on increased urgency in the light of recent reports on global warming and biodiversity.

In Scotland we do, however, have a community of government, civil society, private sector and third sector partners which is working together to take a holistic approach to making energy clean and affordable. Local government in particular is a key partner in a wide range of programmes and policy initiates, driving progress in collaboration with Scottish Government, or as part of their own political mandate. For example, options for Local and Scottish Government co-designing a publicly owned energy company are currently being scoped out. Such a company would contribute to reducing fuel poverty, carbon reduction and sustainable economic development. Other examples of collaboration between Scottish and local government are highlighted above in the Energy Efficient Scotland Programme among others. It is clear that continued close partnership between national and local government, public and private sector, are essential for creating the collaborative relationships, practices and infrastructure we need to meet our ambitions on affordable and clean energy.

The public, as energy consumers are important actors in this nationwide project, and fostering better relationships with consumers is critical to our success. Better understanding consumer needs and the factors which enable and/or restrain behaviour change is a priority. Consumer mistrust in the energy sector is a significant barrier to engagement in Scotland, for example. As part of our vision to build a Fairer Scotland, the Scottish Government is raising the profile of consumers and placing them at the heart of Scottish policy making. This transformational programme aims to fundamentally change the way consumer issues are viewed and tackled across public policy making in Scotland and will be reflected in the work of the Just Transition Commission.

In January 2018 the Scottish Government convened a summit of energy suppliers and consumer groups to address issues affecting vulnerable energy users living in Scotland. Building on the success of the 2016 summit it called on suppliers and consumer groups to work collaboratively for the benefit of vulnerable consumers. This group are developing a Consumer Vision and Action Plan to give detailed consideration to consumer issues across the energy landscape. The plan will ensure consumers’ needs, interests and motivations are understood and addressed as we move towards a low carbon Scotland. To support this work we established an Energy Consumer Expert Advisory Group in October 2018. The newly established group brings together Ofgem, Energy UK, academics and consumer group representatives to help shape the Scottish Government’s approach to a fair and inclusive energy transition. The developing Consumer Vision & Action Plan will complement the Scottish Government Gas and Electricity Networks Vision to ensure regulatory interventions and the price control processes led by Ofgem take the Energy Strategy and our wider policies into account.

Fuel poverty also continues to be an issue for us, particularly in remote and rural areas. In 2017, 25% of households in Scotland were estimated to be in fuel poverty. The Outer Hebrides Community Planning Partnership noted in 2017 that the Western Isles faces one of the highest levels of fuel poverty within the UK and there are four main elements which contribute to this. These are: low incomes, fuel bills, energy efficiency, and how energy is used in the home. In the Western Isles, this is exacerbated by a high population of elderly people, extreme weather conditions, many low income families and almost one third of properties in single occupancy. In addition, the lack of mains gas and a high proportion of older houses and detached houses (leading to higher heat loss) all increase the prevalence of fuel poverty whilst also placing a burden on local health services. From this example we can see that the conditions which underpin fuel poverty and the resulting policy solutions for this are complex.

We must, however, ensure that inclusive policies continue to be embedded at a local and community level to ensure that energy is affordable for all. This is particularly important now, since the equilibrium of generation, consumption and the grid is changing with increasing intermittent renewable generation, inclusion of energy storage, changing heating technology and property efficiency levels as well as smarter grid and metering capabilities.

The Scottish Energy Strategy committed the Scottish Government to publishing an Annual Energy Statement, the first of which was published on 15 May 2019. The Statement highlights key developments in the sector, progress made to date and key plans for delivery of the strategy in the coming year and beyond. The Scottish Government is committed to publishing a Heat Decarbonisation Policy Statement in summer 2020 setting out our actions to decarbonise the heat supply, a timeframe in line with the Committee on Climate Change’s advice. The Policy Statement will take into account the responses received from the Call for Evidence on the Future of Low Carbon Heat for Off Gas Buildings which closed in June 2019.

The barriers to the uptake of low carbon heat options must be explored, as well as opportunities and challenges for the supply chain, and how to avoid any potential adverse effects on fuel poverty. The Climate Change Plan outlines an ambitious trajectory to supply 35% of domestic heat and 70% of heat used by non-domestic properties, from low carbon sources by 2032. At the same time, the Scottish Government’s goal is that no more than 5% of the population will be living in fuel poverty by 2040. Evidence from this exercise will help us ensure the transition to low carbon heat does not have an adverse impact on this target.

Although these are ambitious policies, they need to be supported by sufficient levels of public finance and a regulatory regime through which to lever in private finance to achieve the targets set. Providing adequate finance and setting in place effective policy integration and coherence are fundamental to enabling Scotland to be the affordable, clean energy nation we aspire to be.

Commitments in the Scottish Government’s 2019-20 Programme for Government that relate to this Goal

• Introduction of the Heat Networks Bill which will introduce regulation of the heat network sector to support, facilitate and create controls for the development of district and communal heating in Scotland
• A Low Carbon innovation Fund, targeting a minimum of £30 million of support for renewable heat projects
• An assessment of the use of hydrogen across various applications, and informed by this assessment, the publication of an action plan for the development of a hydrogen economy
• Continue to support Scotland’s offshore wind potential, by producing Offshore Renewable Energy Decommissioning Policy Guidance by the end of the year and aiming to publish a final version of the Sectoral Marine Plan for Offshore Wind by 2020
• Champion wave and tidal energy including through the £10 million Saltire Tidal Energy Challenge fund and a further £10 million to the Wave Energy Scotland programme
• Continue to work to deliver the ambition of creating a new public energy company by summer 2021 which will help Scotland tackle fuel poverty and tackle climate change