Scotland's energy future: First Minister addresses All Energy Conference

I'm absolutely delighted that I'm able to be here at what, of course, is the UK's largest low carbon and renewable energy event.

There's no doubt it is extremely fitting that we meet for this conference on the banks of the River Clyde. Not just because of sunshine. But it's fitting for other reasons, more important reasons, because the work that took place here, in the 18th and 19th centuries – in our shipyards, factories and mills – put Scotland at the forefront of the industrial revolution. And now, as we find ourselves in another period of hugely significant change – as the world embarks upon a low-carbon revolution – Scotland is again emerging as real world leader.

Back in 2009, the Scottish Parliament set some of the most ambitious carbon emission targets anywhere in the world. And I'm delighted to say that we have already met those 2020 targets six years ahead of schedule. And that is undoubtedly helping us to meet our moral obligations when it comes to climate change. But it is also bringing to Scotland really significant economic benefits and opportunities as well.

Our low carbon and renewable sector now accounts for almost 60,000 jobs across our country – and has a turnover of £10.5 billion.

So we want to build on that success. We are determined here in Scotland to develop our low carbon and renewables sector even further. And of course, we also want to continue to support our oil and gas industry.

So that's why, earlier this year, we published our draft Energy Strategy. And what that does is set out our long-term plan to create an integrated, low-carbon energy system – one that will benefit our economy, our environment and the people of this country.

Today, I want to speak about that plan. I want to talk about how we will meet Scotland's future energy needs – and how we intend to transform our energy consumption. I also want talk about some of very real challenges facing the energy sector. And finally, I will speak about our support for local energy solutions.

Now, when it comes to the future of our energy supply, our aim is crystal clear.

We want renewable energy sources to play the major role in meeting Scotland's energy needs.

At the moment, renewables generate almost 54% of Scotland's electricity demand. In terms of our overall energy consumption – for electricity, heat and transport – around 15% is currently met by renewables. It's important to point out that that figure has more than doubled since 2009.

In our draft Energy Strategy we proposed a new target. We want renewable sources to meet the equivalent of 50% of Scotland's total energy needs by 2030.

I don't have to tell anybody that's a hugely ambitious target. But it does reflect the immense confidence we have in Scotland's renewables sector, and it reflects our strengths across the range of different technologies.

Now as all of you know, our primary source of renewable electricity is onshore wind. If you leave this building and look south, you can see the turbines of Whitelee Wind Farm. That's the largest of its kind in the UK – and one of the largest anywhere in Europe. And that's just one of many across Scotland. In fact, our current and consented onshore capacity is enough to power the needs of Scottish households twice over.

That's why we're so determined to ensure that onshore wind has a viable route to market. And as part of that, we've called for Scotland to become the first area in the UK to host a subsidy-free onshore wind farm.

It's a challenge to the industry – but it's also an indication of our commitment to securing the future of onshore wind in Scotland.

Of course, as well as onshore wind, our offshore capacity is also hugely impressive. Scotland accounts for 25% of Europe's total offshore wind resource. Later this summer, the world's largest floating offshore windfarm will be deployed off the coast of Peterhead. And next year, an even bigger one will be constructed at Kincardine in the North East.

Scotland is also at the forefront of developing marine renewables. Just last month, the world's most powerful tidal turbine – developed by the Orkney firm Scotrenewables – reached peak power at the European Marine Energy Centre in Orkney.

And over the past couple of years, Wave Energy Scotland has committed almost £25 million for a series of groundbreaking wave technology projects.

So it's very clear that, across wind, wave and tidal – not to mention hydro and solar as well – Scotland's renewables sector really is a global leader. By setting our new all-energy target, we're aiming to ensure that continues, and that all of us can reap the benefit of that. Of course, alongside our support for renewables, it is important that we continue to support our oil and gas sector.

As the International Panel on Climate Change has noted, during the low-carbon transition, hydrocarbons will continue to help meet the world's energy needs. So a secure supply of oil and gas – of course produced to the highest, least polluting standards – will be an important part of Scotland's energy mix for a long time to come.

It's also why we continue to support the industry amid the current challenges that it faces – through initiatives like our Energy Jobs Task Force and our Transition Training Fund.

After all, our oil and gas sector is not just a hugely important part of our economy, supporting over 120,000 jobs. The industry's key strengths – in terms of expertise, infrastructure and supply chain – are also a huge asset to the wider energy sector. It's environmentally and economically essential that we harness all of those strengths to support new low-carbon technologies and energy sources.

For example, the experience of our oil and gas industry in working offshore is clearly of real relevance to our offshore wind sector. And that's just one of many ways in which the oil and gas sector can contribute to the growing success of our low-carbon economy.

Of course, ensuring that Scotland has a reliable, low-carbon energy supply is just one part of our strategy. We're equally focussed on transforming the way that we use energy.

I'll give just two examples of that. The first concerns energy efficiency.

We know that increasing energy efficiency helps to lower energy bills, reduce fuel poverty and maximise the competitiveness of our businesses.

That's why we have taken the deliberate step of making energy efficiency a national infrastructure priority. We've committed half a billion pounds to Scotland's Energy Efficiency Programme over the next four years. That money will be used to implement energy efficiency measures in homes and businesses right across the country. And I think that's a very good example of an investment which definitely benefits the environment that is also good for families and businesses right across Scotland.

The second example I think it's important to highlight is transport.

We know we need to reduce emissions from road travel. That is a vital part of meeting our climate change targets – but it's also hugely important to protecting public health.

That's why we are seeking to be at the forefront of innovation when it comes to low or zero-carbon fuels – like hydrogen. In fact, Europe's largest fleet of hydrogen fuel cell buses is currently in operation on the roads of Aberdeen.

And it's also why we set a new target in our draft Energy Strategy – that by 2032, 40% of all new cars sold will be ultra-low emission vehicles.

We're already building the infrastructure that will be necessary to achieve and support that. Our network of electric vehicle (EV) charge points is one of the most comprehensive in Europe – and we'll continue to develop that.

But alongside that, we also continue, through the Energy Savings Trust, to provide interest-free loans to consumers and businesses for the purchase of electric vehicles.

It's just one part of our comprehensive agenda to reduce Scotland's transport emissions. And along with our investment in energy efficiency, that will contribute to the long-term transformation of our energy use.

Now, while we're underlining – and I hope I am underlining for you today – our ambitions for the future, we also must recognise that our energy sector faces very real challenges. I already mentioned the challenges facing our oil and gas industry. Over the past couple of years, there's no avoiding the fact that the low carbon and renewables sector has also suffered some setbacks.

Our offshore oil and gas fields are potentially the largest carbon storage resource in Europe. We also have a huge amount of expertise in the oil and gas sector and its supply chain. So Scotland should be, and very much is, a natural centre for this vital new technology.

But proving the commercial viability of carbon capture and storage – and of course, Scotland's own capabilities – is absolutely essential.

That wouldn't just help us to lower emissions from power generation and heavy industry. It's also hugely important when we look at future trends in energy generation. Carbon capture and storage, I think, has an important role to play in ensuring that hydrogen is a truly sustainable fuel source.

Now, I welcome today's announcement that EU funds have been awarded to the Acorn Project. This initiative will explore how oil and gas infrastructure in Aberdeenshire could be used for carbon capture and storage. In doing so, it aims to show how a vibrant carbon capture and storage industry could develop in Scotland.

Now so far I've talked about our national policy ambitions and some of the challenges we face; I've focused on the action we're taking to modernise our energy supply and change the way we use energy. But we're also looking to support and encourage local energy solutions. We want to harness the skills, ideas and resources of communities right across the country.

The benefits of this are potentially transformational. Local energy systems, as we know, can help to provide secure, sustainable and affordable energy that meets the specific needs of different communities. And by supporting a culture of energy innovation, we can keep Scotland at the forefront of the low-carbon revolution.

That's why we're providing £43 million of new funding for 13 renewable and low-carbon energy projects across Scotland. It's part of our Low Carbon Infrastructure Transition Programme – which is joint funded by the European Union.

Today, we're announcing the projects that have been selected to benefit from that funding. Some of them are led by community energy companies, some are led by private companies, others are led by local authorities.

They include a scheme in Stirling that uses the biogas from waste water to produce heat and power, and a project on Fair Isle to create a standalone energy system incorporating wind, solar and battery storage.

Another project involves installing a heat pump on the site of a former shipyard in Clydebank, about five miles away from here, helping to provide low-carbon heating for more than 1000 homes.

So the projects support good ideas, but they also have the potential to directly benefit specific communities and businesses. And of course, as we learn lessons from their implementation, they could bring wider benefits to the whole of Scotland as well.

And these local projects are a further example – I hope – of the scale of our ambition for Scotland's energy future. We are absolutely determined that Scotland will play our full part in reducing carbon emissions and tackling climate change.

We're determined to build a modern, secure energy system that creates jobs and strengthens our economy. And we want our energy sector to be a world leader across all forms of energy.

The truth is, we have all of the raw materials here in Scotland that we need to achieve those ambitions.

Per head of population, we're one of the most energy-rich nations in Europe. We've retained our traditional strengths in construction, manufacturing and engineering. And, of course, with five universities ranked among the top 200 in the world, we also boast an outstanding science and research base.

But for all those advantages, we know, and we have a real recognition, that there's nothing inevitable about Scotland realising our energy potential. It's the decisions we make now – and the direction we take – that will determine whether we use these raw materials to fulfil and realise that ambition.

My pledge today, on behalf of the Scottish Government, is that we will continue to do all we can to support the energy sector through the current challenges. And we will do everything we can to help you seize the opportunities for innovation and growth.

Because I believe that, notwithstanding the challenges we face, the opportunities outweigh those challenges. And if we work together, with a clear sense of direction, a clear sense of leadership, I am convinced we can turn those raw advantages into reality and make Scotland's energy ambitions a reality. For the benefit of Scotland, but also for the benefit of the world overall as well.