Chamber and committees

The ten-year £500 million Just Transition Fund has been established to support the North East and Moray region, which does not host any of Scotland’s nuclear power facilities.

Our forthcoming Energy Strategy and Just Transition Plan will provide a clear roadmap for Scotland’s energy system. It will be co-designed with workers, businesses and communities across the country and establish a shared vision for Scotland’s energy system, identifying concrete steps to manage the economic and social impacts of the transition fairly.

This year we will outline our sequence of Just Transition Plans, including any sub-sectors or sites of the energy system that would benefit from an individual plan.

Our draft Energy Strategy and Just Transition Plan is currently being developed. This will include co-design as a key underpinning principle, ensuring workers from across the energy sector have the opportunity to contribute towards this process.

Additionally, we are investing in a green transition for North Ayrshire, supporting the region surrounding Hunterston B. The Scottish Government has invested £103 million in the Ayrshire Growth Deal which will support inclusive growth across the region; and help create good, green jobs.

As confirmed on 14 January 2022, the Scottish Government has offered financial backing of up to £80 million from the Emerging Energy Technologies Fund (EETF) to help the Scottish Cluster project accelerate its development.

As set out in our Climate Change Plan Update 2018-2032, £80 million of funding from the EETF will be directed to projects supporting the development of a carbon capture and storage (CCS) transport and storage network that will further enable negative emissions technologies (NETs) projects to develop in Scotland. This is the basis on which the figure of up to £80 million was developed.

The Scottish Government first offered this financial backing to the UK Government in a letter dated 12 October 2021 (i.e., prior to the UK Government’s announcement of Track-1 clusters on 19 October 2021) to the UK Chancellor, Rishi Sunak, and Her Majesty’s Treasury. Our offer was reiterated in a meeting between the Cabinet Secretary for Net Zero, Energy and Transport and the UK Government’s Minister for Energy, Greg Hands, on 13 January 2022.

Our offer of support was made on the basis that the Scottish Cluster is given certainty of its due status within the UK cluster sequencing process.

The Scottish Cluster demonstrated full suitability for Track-1 status based on the competition criteria, but has been designated as a ‘reserve’ cluster. Awarding the Cluster its ‘due status’ would therefore mean ensuring it can continue its development on a Track-1 timeframe.

Despite repeated requests to the UK Government from both the Cluster and Scottish Ministers, the designation of ‘reserve’ status has come with little clarity and no guarantees of future support for the Cluster. As the First Minister stated in her letter to the UK Prime Minister on 04 November 2021, this uncertainty risks delaying the delivery of crucial and strategically important projects including the decarbonisation of Scotland’s largest point industrial emitter at Grangemouth.

The Scottish Government does not hold all the necessary legislative and regulatory powers to allow us to support the Cluster alone; key levers, including access to BEIS business models, are reserved to the UK Government. Further detail on how the financial backing of up to £80 million could best be spent will therefore be determined in due course following further engagement with the UK Government on the Scottish Cluster’s status within the cluster sequencing process.

As detailed above, our offer of support has been made on multiple occasions to the UK Government. Officials also consulted with representatives of the Scottish Cluster.

The Bioenergy Policy Working Group have met six times since the Bioenergy Update was published in March 2021.

Our homes and workplaces account for around a fifth of Scotland’s total greenhouse gas emissions. We can and must make very significant progress towards eliminating these emissions over the next decade and reduce them to zero by 2045.

As set out in the Heat in Buildings Strategy, we see a limited role for bioenergy in domestic heating, in line with advice from the UK’s Climate Change Committee.

Warmer Homes Scotland provides heating systems and insulation measures to enable these systems. Warmer Homes Scotland does not provide fuel to customers and, where a heating system technology allows for a choice of fuels, the scheme cannot influence the customer’s ongoing choices. Scottish Government has no plans to reintroduce LPG heating systems to the list of measures available under Warmer Homes Scotland.

Our draft Energy Strategy and Just Transition Plan is currently being developed. This will include co-design as a key underpinning principle, ensuring workers from across the energy sector have the opportunity to contribute towards this process.

In addition, the Scottish Government is investing £300m in the Edinburgh and SE Scotland City Region Deal, which will create new economic opportunities across the area and is expected to provide up to 21,000 jobs. This includes £25m for an Integrated Regional Skills and Employability Programme, which will help local people prepare for the changing regional labour market and benefit from the many new jobs that the Deal and other investments across the region are creating.

Security of electricity supply is a reserved matter and is delivered by National Grid ESO across the whole of Great Britain under regulation from Ofgem. Scotland is part of a GB electricity system that is managed by National Grid in its role as Electricity System Operator. NGESO is responsible for sourcing generation to meet demand.

A mixture of renewables, storage and carbon capture technology – as well as increased interconnection across GB and to the continent – can support a secure and decarbonised power sector in Scotland following the closure of the existing large nuclear generators.

Scotland is currently a net electricity exporter and in 2020 exported 20.4 TWh of electricity, equivalent to powering every household in Scotland for 26 months. It only imported a little over 1 TWh of electricity, meaning that net exports of electricity were 19.3 TWh in 2020, its highest year on record.

Our Just Transition plans (beginning with the draft Energy Strategy and Just Transition Plan due to be published later this year) will set out how the economic and social impacts of our transition to Net Zero will be managed in a way that delivers on our national just transition outcomes.

From this programme of work, and the co-design activity that will be undertaken to support the Plans, we will be able to assess the nature and scale of impacts on workers across the sectors of our economy. This will enable us to assess how we support the full range of businesses and business models currently operating across sectors, including contractors contracting via a limited company.

Our Just Transition Fund is a new financial commitment and is currently being developed. It will be shaped in discussion with regional partners. Further updates will be shared as this engagement develops.

We consulted on a draft of the Heat in Buildings Strategy in February 2021. 178 individuals and organisations responded. This consultation asked for views on the impact of the strategy on island and other remote communities. We have published the analysis of the consultation alongside the Strategy.

Alongside the consultation, we organised a series of 7 consultation workshops, including one on Place, one on Communities and one on Islands. These were open to all interested participants, aiming to communicate the vision and actions planned as part of the Strategy and collect feedback.

The consultation events were attended by 156 individuals in total, and included representatives of organisations, community groups, housing associations and local authorities located in rural and island areas of Scotland.

We have also published an Island Communities Impact Assessment (ICIA) drawing on the engagement and responses generated from the Draft Heat in Buildings Strategy consultation. Officials also met with islands representatives from Highlands and Islands Enterprise during the initial stages of the ICIA. Where possible negative impacts on island communities were identified, relevant mitigating actions were outlined. The ICIA also noted multiple positive impacts heat decarbonisation will bring to islands communities.

Alongside the Heat in Buildings Strategy we published a Business and Regulatory Impact Assessment which sets out the evidence relating to capital and running costs of converting to zero emissions heat.

We recognise that the costs of conversion for island and rural homes can be higher than equivalent urban properties for a variety of reasons, including supply chains, transport needs and weather disruptions. Further details and mitigating actions are set out in the Heat in Buildings Strategy Island Communities Impact Assessment , and we will publish an Islands Energy Strategy later this year. Our Heat in Buildings Supply Chain Delivery Plan will include a specific focus on developing local supply chains particularly in our islands and remote communities to help bring costs down.

The financial implications for households will depend on how heat and energy efficiency measures are funded and financed. This is an area of active policy development. We already run schemes to help households retrofit their properties to cut emissions, and are committed to supporting those least able to pay. We have established a new Green Heat Finance Taskforce which will recommend ways the Scottish Government and private sector can collaborate to scale up investment.