Chamber and committees

There are obviously huge opportunities for the port of Leith, given its location and capacity and the fact that it is a green freeport. It can take advantage of the opportunities that will come from developing the Scottish renewables supply chain.

I will pick up on a number of areas. Developing a Scotland-based supply chain for our renewables industry in general and for offshore wind in particular is one of our greatest economic opportunities, so I take that incredibly seriously. That is why the First Minister came forward with the £500 million commitment, which has been welcomed by industry as giving not only certainty but confidence to investors, who can see that we are taking the issue seriously.

I will be developing that with colleagues and bringing forward a green industrial strategy by this summer. That will take decisions and set out a pathway for how we develop the supply chain, what it looks like and which areas we will prioritise. If we are getting that right, we will not be pleasing everybody. We will have to prioritise where public funding goes and that will be considered partly through the green industrial strategy.

We also have the strategic investment model that Gillian Martin took forward last year, which has huge potential. It includes port and harbour infrastructure and other elements that will enable some supply chain opportunities to be realised. We are collaborating on that across Government, as Mr Macpherson would expect. We are also working with industry partners to ensure that we get that right and maximise the economic opportunities, as well as facilitating and enabling developers to come forward, particularly for ScotWind, at the earliest opportunity.

I recognise the role that Ms Lennon has played on this front and her interest in and understanding of the situation.

I am keen to impress upon the people who are making career choices the importance of the planning system in realising our economic goals. Huge projects and opportunities will be coming forward in which planners will play a central role in ensuring that our economic opportunities are realised and that, as Ms Lennon rightly points out, the wellbeing economy can be progressed. I would encourage people who are considering which career path to choose to look at planning as an area where they can make a real difference in shaping our society and ensuring that we deliver for communities.

There are two further points to make. First, planning authorities are funded through the resource that is provided to local authorities in general, and it is for local authorities to determine their allocation to their own planning departments. Secondly, as I said in response to Ben Macpherson, we are looking at what more we might be able to do to provide support to planning authorities and to ensure that we can provide as much certainty as possible on the speed of some of the decisions that are being taken, so that we can provide certainty not just to potential investors but to communities where there are planning applications.

I cannot give an overall figure or say whether it will go up or down, because some of that will depend on local decision making, which is the way it should be. However, we are looking at what more we can do to support a faster process in planning. There are on-going discussions about the extent to which that would require resource and whether it would require other interventions to provide support to local planning authorities.

I acknowledge Monica Lennon’s initial point about any further reduction in the planning headcount being worrying. If we saw a reduction, it would be very challenging for us to realise what we want from an economic perspective, because of the difficulty of getting through the applications that we need to get through. That is why we are looking at what might be possible. The suggestions that Ms Lennon has made will be part of our consideration of whether there is anything more that we can do, beyond the appeal that I made in response to her first question about the central importance that planners play in giving voice to the great work that our planners do. We will consider whether other incentives and supports can be given to planning authorities, to provide greater certainty about how quickly we can process some of the applications.

It is both—both will be under consideration. We will look at the bodies’ current resource requirements and at the future, which involves getting clarity from industry about projects that will come through. I gave the example of transmission infrastructure, but there are other activities that relate to the energy supply chain and energy development where we are keen to get as clear a timeline as possible from industry for when it expects to come forward with proposals. Some of that will depend on factors that are outwith its control and our control. As I said, one of the greatest potential barriers to our renewable energy capability concerns access to the grid for energy development and offtake from the grid for particularly energy-intensive supply chain developments. Such considerations are key. I know that UK ministers and regulatory bodies are cognisant of that and understand the need to accelerate investment in the grid to ensure that we can respond to the opportunity that is before us.

We have had to take incredibly difficult decisions because of the financial settlement that we have received. In particular, as the Deputy First Minister set out, we have seen a reduction in our capital budget from the UK Government, as well as a reduction in financial transactions and a real-terms cut of almost 10 per cent coming forward in future years. That has had a direct impact on what we are able to spend. It goes without saying that we cannot spend what is not there, and I have had to take a very difficult decision to prioritise our commitment to an offshore wind supply chain, which I believe will help to catalyse some of the projects that will lead to the continued development of hydrogen.

The hydrogen innovation scheme continues to operate and we are continuing the Scottish industrial energy transformation fund, which has the potential to look at the decarbonisation of heavy industry, including through the generation of hydrogen. There are huge opportunities still available. We are incredibly well placed to take advantage of green hydrogen in particular; there is a huge market for that. We know that there is significant interest from Germany in particular for a fixed link. Hydrogen will play a critical role and I want to see it developed as quickly as possible. However, where we are faced with a fall in budgets, we have to take difficult decisions, and I have had to prioritise the offshore wind supply chain.

That is a fair point and I am cognisant of it. The issue is how we use hydrogen, where it can be deployed and what is possible from it. We should not underestimate the opportunity that would come from an export of some of that hydrogen, because it would also catalyse the wider hydrogen industry, which allows some of the other offtake to happen.

I think that you are right that the investments that we have made so far are around demonstrators as well as around testers on the viability of some of those potential uses. I am thinking of the work that the European Marine Energy Centre in Orkney has done to demonstrate that green hydrogen can power the harbour infrastructure for the ferries while they are dockside there, or indeed the investments that have been made in the demonstrator in Fife of the potential for green hydrogen to be used for an alternative energy and heat supply.

There is massive potential in relation to green hydrogen, particularly for industrial decarbonisation; also, potentially, for export and transport decarbonisation. There is a difference of opinion across industry pretty widely as to whether green hydrogen, or hydrogen in general, will be best used by deploying it for alternative household energy consumption. However, it is important that we continue to invest in those demonstrators to show whether it is viable and to work with some of the organisations that have an interest, such as the gas grid and its regulators, to see how we can best deploy green hydrogen.

Some of that thinking will come through in the green industrial strategy, but the completed energy strategy and just transition plan will also feature some of that work.

As I said, local authorities have agency and decision-making powers regarding the level of investment that they make in their planning departments. First and foremost, we are looking to ensure that the protection of planning budgets is encouraged, so that local authorities also reap the economic rewards that come from having a good planning system and taking advantage of the investment opportunities that come through it.

The Scottish Government’s commitment of its own human and financial resources to our consenting regimes is under constant review. We have a direct commitment concerning the consent time for onshore wind as part of the onshore wind sector deal, and we will need to ensure that it is reflected in the resource—including human resource—that is committed, in order that it can be realised.

Ms Dunbar is correct—we have that long-standing commitment to continue to support carbon capture. The release is triggered by the decisions that are taken at a UK Government level, as I set out previously, around furtherance of the track 2 status and, in particular, whether industrial emitters will be included. We continue to engage with the UK Government on making progress and encourage it to do so in a timeous fashion, so that we can realise our commitment and our obligations to meet not just our net zero targets but the UK’s net zero targets. The Scottish cluster also has a very important role in the UK meeting its net zero ambitions—it is not just about the central role that the cluster will play in Scotland’s ambitions. Therefore, we need to see faster progress there, and I am sure that the committee will also be interested in exploring progress on that with UK ministers.

I concur.