Chamber and committees

Neil Gray has identified an error in his contribution and provided the following correction.

At col 9, paragraph 1—

Original text—

We know that wind—onshore and offshore—is the cheapest form of renewable energy and already provides a huge amount of capacity for the grid.

Corrected text—

We know that wind—onshore and offshore—is one of the cheapest forms of renewable energy and already provides a huge amount of capacity for the grid.

No, it has to be—

I thank Ms Dunbar for that question. I cannot begin to appreciate just how difficult last winter was for families across Scotland. Families who ordinarily would have felt themselves to be relatively comfortable, as well those who were already struggling, found last winter incredibly difficult. To compound that, we are now in a situation in which interest rate rises are posing difficulties for people with their mortgage payments and in which the new price cap is going to keep energy prices at double what they were a few years ago. The pressure on households is therefore still grim. We are doing what we can with the resources that we have available to us to mitigate some of that pressure. The First Minister’s first action was to see the fuel insecurity fund not doubled but trebled, and we hope that that will provide some comfort and support over this winter.

What we really need is structural change. The sad irony is not lost on me. We were talking earlier about the massive renewable potential and the current energy generation that is coming from Scotland. Yesterday, I saw at SSEN that the energy generated is four or five times beyond requirements in the area at which I was looking. We are generating way beyond our need, yet in Scotland we have some of the highest energy bills and highest levels of fuel poverty. That is why we need structural change on energy pricing. We need to see it being decoupled from wholesale gas prices, and we need to see Scotland’s benefit from having such a huge resource being put to use to support households and businesses. I was in Rutherglen yesterday, talking to businesses. Brexit was the number 1 issue that was being talked about, but the second issue was energy costs, which have been absolutely crippling for not only households but businesses. We need to see that support continue, we need Ofgem and the UK Government to intervene and we need to see a wholesale change in the way in which the market operates.

As I have said, the work that we have done with the fuel insecurity fund to mitigate some of the pressures is important, but in both those areas it is the responsibility of Ofgem and the UK Government to come forward. There has been a considerable campaign, and the Scottish Government has supported an end to the increased charges for prepayment meters. There is welcome progress being made by some of my colleagues at Westminster, who have led the charge on this, but we need to see more action. Elements like that are minor mitigations, but structural change is what really needs to happen to ensure that we take advantage of our resources and are able to put them to use for our people to see demonstrable benefit for them through reduced energy prices.

I do not know whether this gives Jackie Dunbar comfort, but I have had casework in Airdrie and Shotts on that, and I am sure that other colleagues in the committee have dealt with similar cases. It is genuinely crippling people—households and businesses, as I said. We know from surveys that it is one of the top areas of concern for businesses, particularly energy-intensive business. I have asked businesses where their challenges are—not just yesterday in Rutherglen but throughout the summer—and they mentioned the impact that Brexit had had on the trading environment. The second and third issues, which were pretty close, were energy costs and access to labour. It is a massive issue for our entire economy. We cannot afford to allow that to fester. We need to make sure that action is taken. We will continue to call on the UK Government to provide greater protection for people this winter.

It is incumbent on Government ministers to come forward with information in the way that Monica Lennon has outlined, and to make sure that

“it is factual, credible and evidence-based”.

We must also ensure that the public discourse is as informed as possible. The best approach in the energy sector is not to demonise bad behaviour; it is to exemplify good behaviour, including where good work is being done to transition, and to ensure that people take the right decisions and move in the right direction. That is the best approach. As I said in response to Monica Lennon’s earlier questions, especially in the energy sector we will need the people and their skills and we will need investments for a just transition that is as speedy as possible. Taking them with us, just as we need to take the public with us, will be of critical importance.

I can give Mr Lumsden absolute confidence that, when we are in a position to have certainty about the timescale and about which emitters will be included, the funding that we have committed to will be realised.

As I have said, when we have certainty on which emitters will be included and what the UK Government will fund, we will use the £80 million to add maximum value to those that are involved, depending on what the UK Government sets out. That is why, as I have said repeatedly, it is so important that the UK Government sets out which emitters will be included and what it is going to fund. Until we know that, it will be impossible for us to add value because, as yet, there is nothing to add to. That is why we and industry are looking for the UK Government to move much faster.

The longer the delay, the less likely it is that we will be able to meet our targets and see the industrial decarbonisation that we all want to see and that we have to see if we are to meet our net zero objectives. That is why I call on the UK Government to move much faster, and I do that through engagement, publicly and privately, as do my officials.

We need to take this in order. The consultation on our energy strategy and just transition plan closed earlier this year and received substantial feedback. The consultation responses are being considered, and we are hoping to produce a response as soon as possible to make sure that that part of our programme is realised. We will move as quickly as we can on a sector-by-sector basis thereafter.

Ms Lennon’s initial proposition is absolutely correct: the Scottish and UK Governments have very different positions regarding new oil and gas projects. That said, we are very much focused on ensuring a just transition, which is why the areas for which we have responsibility—we do not grant licences for new oil and gas exploration—are focused on a just transition. That is where our responsibilities lie, and it is where we will continue to provide focus.

However, we appreciate that the energy companies that are involved in oil and gas are transitioning and that their workforce and investments will be incredibly important—I refer to Mr Lumsden’s contribution—in allowing us to make that just transition. We will not be able to meet the 2045 target without private capital. A substantial amount of that, particularly in the energy generation sphere, will need to come from energy companies that are involved in oil and gas.

We need to take a measured approach that appreciates the role that those companies have to play. That will be critical, but we also need to push them to go as fast as possible in that just transition. That will be of paramount importance. All my engagements over the summer, with those in the sector and with Government colleagues, have been about ensuring that a just transition happens as quickly as possible.