Delivering on Scotland’s energy security

The Scottish Parliament's Economy, Energy and Tourism Committee has published its report on energy security: 'Plugged-in Switched-on Charged-up: Ensuring Scotland’s Energy Security'.

Those looking for a blueprint for energy security will be disappointed, in fact there was some debate over what energy security even means. However, the Committee hopes, it will contribute to a debate on the future of something we tend to take for granted, but which powers our everyday plugged-in, switched-on, charged-up lives.

The focus of the report is on electricity supply. The reports asks: “Does Scotland need more generation or better interconnection? The Scottish Government appears to favour the former approach, National Grid the latter. Greater clarity is needed if we are to avoid policy deadlock.”

The Scottish Government's concerns are that UK capacity margins have declined from 15% in 2009 to as low as 2% in 2016. They cited the views of Sir John Arnott and Dieter Helm, who argued that it should be between 10 and 20%. Whether for Scotland or on a GB basis. They also argued that narrowing of the gap between supply and demand was likely to have a negative impact on consumers because as the capacity margin falls, prices inevitably go up.

Some may give a wry smile to these concerns, given that despite the Scottish Government claiming to be in favour of a balanced energy policy, their actions have been the opposite. In particular, the non-replacement of thermal, in the view of Professor Haszeldine, would mean Scotland becoming “more and more like Northern Ireland” – with no thermal generation of its own and reliant on Scotland and in Scotland’s case, for “large parts of the year”, on England. Transmission charges certainly are a disincentive to invest in Scotland, but so has Scottish Government energy policy.

The policy target of 100% from renewables is unlikely to be achieved anyway. Scottish Renewables has recently said the Scottish government's goal would not be achieved by the 2020 deadline without further investment from Westminster. Predictably, this resulted in more ranting from Scottish Ministers at Westminster.

A report from the respected Institute of Civil Engineers next month will say: “Scotland will transition from being a net exporter to being a net importer of electricity if the closures of Longannet, Hunterston and Torness are not replaced by new development.”

The Committee wants the Scottish Government (along with Ofgem) to look more closely at “demand-side response” and to produce a demand reduction strategy, either as part of a wider document such as the Electricity Generation Policy Statement or a strategy in its own right. They linked to this is district heating, and while the minister is keen to develop this, he doesn't appear to have a plan.

On consumer responses the report highlights the evidence of the CMA who found those customers generally engaging least with the energy market – by not switching supplier for example – and therefore “leaving most money on the table” were people on low incomes, of a poor educational background, with disabilities, or otherwise disadvantaged. Mindful of the November 2016 deadline for the Scottish Government's target to eradicate fuel poverty, the report asks the Scottish and UK Governments what can be done to address this inequity in the system.

Branding the committee report as “very poor”, Inverness-based economist Tony Mackay said that the committee’s choice of witnesses who provided oral evidence were “almost entirely” drawn from pro-wind farm bodies. Oral evidence was indeed narrowly drawn, but this is perhaps a little harsh. Mackay also says that forthcoming closure of Scotland’s two nuclear power stations at Hunterston and Torness are dealt with “very poorly” in the report. That is certainly true.

Back in the real world capacity shortages have hit home for real. For the first time a new tool to balance the energy system, Demand Side Balancing Reserve (DSBR), was used to help manage the peak demand time between 5pm and 6pm. This involved a small number of contracted large businesses being asked, under a commercial arrangement, to cut their electricity use.

The power shortage was caused by a number of factors including unexpected maintenance issues at ageing coal-power stations, which led to temporary shut downs at several power plants; low wind speeds, meaning wind farms were only able to produce 1 per cent of the UK’s required electricity, and no solar input, because the requirement happened when it was dark. All highlight the risk of relying on intermittent generation.

The ICE report next month will call for a national debate on how we, as a country, deal with changes to electricity generation to ensure that we have a resilient supply with sufficient capacity for the long term. Amen to that!


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