Leading the transition to a carbon neutral economy

Key points:

  • Up to £20 million Energy Investment Fund
  • Reduce emissions by 75% by 2030 across the whole economy
  • A Route Map on an Energy Efficient Scotland, that will lead to over £10 billion of activity to retrofit existing homes and buildings throughout all parts of Scotland
  • 50% of Scotland’s energy needs met by renewables by 2030
  • Almost £40m invested since 2014 to support innovation in wave energy technology
  • £10m Saltire Tidal Energy Challenge Fund launched in February 2019

We are committed to reducing greenhouse gas emissions by 75% (from a 1990 baseline) by 2030, and to doing so in a way that helps to grow the economy and is fair to all. This spring we will publish an update to the Climate Change Plan showing how we will meet all our annual emission-reduction targets over the coming decade.

By 2030 the equivalent of 50% of the energy for Scotland’s heat, transport and electricity consumption is to be supplied from renewable sources, along with a 30% increase in the productivity of energy use across the Scottish economy. That is why we have made energy efficiency a national infrastructure priority and set out our plans for this transformation in the Energy Efficient Scotland Route Map. We estimate this will result in a £10-12 billion programme of public and private sector investment over the next 20 years, with the potential to boost Scottish GDP growth and generate economic opportunity across the whole of Scotland.

We have already allocated around £40 million to 16 low carbon capital projects through the Low Carbon Infrastructure Transition Programme. To progress our transition to a climate-neutral economy, we are providing support for renewable and local carbon infrastructure through our £20 million Energy Investment Fund and £60 million Low Carbon Innovation Fund. It offers flexible investment and debt funding, on a commercial basis, for energy projects that facilitate, catalyse and accelerate Scotland’s transition to net zero carbon emissions.

Scotland’s buildings – both residential and commercial – will be decarbonised in line with our net zero target. This will mean a significant up-scaling of deployment of renewable and low carbon heating as well as the development of heat networks. We will set out our policy prospectus in the Heat Decarbonisation Policy Statement in the summer.

We are already investing in renewable and low carbon heat, for example through the Scottish Government’s Low Carbon Infrastructure Transition programme (LCITP), under which we launched the Scottish Low Carbon Heat Funding Invitation for minimum of value of £30 million in September 2019.

This fair and open funding invitation has been designed to accelerate the delivery of large scale and innovative low carbon heat infrastructure projects that support the ambitions for Scotland to achieve net zero emissions by 2045.

This support will provide financial assistance for up to 50% of the total eligible capital costs of a project up to a maximum of £10 million per project. The successful projects will be innovative, demonstrating economic, social and low carbon benefits for Scotland. They must also be replicable. Applications for capital support closed on 25 October 2019 and projects will be delivered between March 2020 and March 2022.

Scotland continues to lead the world in developing and supporting marine energy technology, with the European Marine Energy Centre on Orkney recognised as a global centre of excellence. We believe that wave and tidal energy will play an important role in our own future energy system and also has substantial export potential.

Our Wave Energy Scotland programme has been designed to drive forward the search for innovative ways to harness power from the world’s oceans. Since being established in 2014 the programme has engaged around 200 organisations from industry and academia on 86 projects with investment of almost £40 million. It is the largest wave energy technology programme in world and has maintained Scotland’s position as a global leader in this sector.

We launched the £10 million Saltire Tidal Energy Challenge Fund in February 2019 to drive innovation and incentivise investment in the Scottish tidal energy sector as well as support a pathway to long term cost reduction.

Electricity & Gas Network businesses in Scotland, and their supply chain, will be key to realising our transition to a climate-neutral economy. We are working with these companies, as well as the wider sector and the regulator, to ensure these future plans are aligned to our vision for the sector.

Our continued support for oil and gas exploration and production in the North Sea will now be conditional upon a sustainable, secure and inclusive energy transition. This will include an increased net zero investment by industry and government.’

Reducing emissions from the extraction of offshore oil and gas will make a significant contribution to tackling global climate change, particularly if technologies applied in the North Sea can be exported and deployed in other countries.

To drive this change, we will support in principle the Oil and Gas Technology Centre’s plans to establish a new Net Zero Solution Centre. This will enable the North Sea to become the first net zero hydrocarbon basin in the world. This centre will support the development and deployment of carbon capture, utilisation and storage, hydrogen and renewables technologies that can be integrated with existing offshore oil and gas infrastructure.

In all of our activities, we will ensure to make best use of the world-renowned expertise, skills and facilities available in Scotland’s universities, colleges, research institutes, Centres of Expertise, and innovation centres.

Key resources:

Scotland’s Energy Strategy

Scottish Government: Energy

Energy Efficient Scotland: route map

Scottish Enterprise: Energy Investment Fund

Wave Energy Scotland

European Marine Energy Centre

Scottish Government: Energy Investment Fund

Scottish Development International: Renewables

Low Carbon Infrastructure Transition Programme