Energy

Speech by Alison McInnes delivered to The Scottish Parliament on Thu 17th Jan 2008

There are compelling reasons for ensuring that we have a coherent and comprehensive energy strategy for the UK, including the need to tackle climate change, the ever-increasing demand for energy, higher prices, and the decline in oil and gas resources. We need the right energy strategy for the UK and we need a Scottish Government that is willing to employ its own powers to best advantage.

The recent Royal Society of Edinburgh inquiry into energy concluded that

"Scotland cannot operate in isolation on energy. It is part of the global energy market. It will have to work within the powers reserved to the UK government ... The Scottish Executive will need to work in harmony with the UK".

Working in harmony with the UK Government is not something that the SNP has yet perfected. Can we hope that it is prepared to give it a go on such an important matter?

The right strategy will have to be effective in tackling climate change, but it will also have to promote sustainable economic growth, deliver security of supplies through a diversity of supply, and eradicate fuel poverty. I am disappointed that the UK bill is silent on fuel poverty.

I believe that the UK Government is wrong to press forward with a new generation of nuclear power. Nuclear power remains unwanted, unsafe and uneconomic. The market is rigged in favour of the nuclear industry. Billions of pounds of public money have gone into research and development for nuclear energy, compared with the tiny amounts that have gone into research for other forms of energy. There is a real risk that focusing on new nuclear plants will undermine attempts to find a cleaner, greener, more sustainable and secure solution. We should be concentrating our efforts on renewables and greater energy conservation.

Urgent action is needed now at Westminster, here in Holyrood and throughout the country at local authority level. We must unite to ensure that cleaner energy sources have a competitive edge. I would like to see a step change in funding for research and development in and the demonstration of renewables and low-carbon technology.

We have seen what can happen when Governments put their minds to it. The previous Scottish Administration transformed the prospects of renewables in Scotland. I want that good work to be built on. Our manifesto proposals-which were independently assessed as being the greenest-were ambitious. We support investment in renewables, demand reduction, energy efficiency, decentralised energy and microgeneration. We need look no further than Denmark and the Netherlands for good examples of using energy production to energise regional economies and reduce dependence on fossil fuels.

I would like to take a few moments to highlight north-east Scotland's contribution. Forty years of experience in oil and gas has built Aberdeen into one of the most influential, innovative and proactive energy cities in the world. Many leading international energy companies are headquartered there, and there are around 900 energy-related businesses, agencies, government bodies and research institutes in Aberdeen city and shire. A total of 16 per cent of the region's employment is in the energy business. There is a massive bank of knowledge and expertise, which is just as important as the oil reserves that we still have. The north-east is rich in natural resources-forests, wind and wave. Harness those resources with that knowledge and the north-east will continue to be the powerhouse not only of Scotland's economy but of our future energy needs.

The north-east understands the need for action and the potential economic advantages that investment in energy research and production can bring. Aberdeen Renewable Energy Group was established six years ago. That private-public partnership was set up to identify and promote renewable energy opportunities for businesses in Aberdeen city and shire. It has around 100 members drawn from energy businesses, research institutes, oil service companies, professional consultants, economic development agencies and local authorities. That collective diversity extends into every source of renewable energy-onshore and offshore wind, wave and tidal, biomass, fuel cell, photovoltaic and geothermal. Incidentally, the group was set up using money from the previous Administration's cities growth fund-funding that is no longer available for such initiatives. Support must continue to be provided to such initiatives. It is clear that government at all levels can be the catalyst for change by creating a supportive environment and developing markets.

What action can we take in Scotland? The SNP has not yet taken forward an energy efficiency strategy. The previous Executive drew up a draft energy strategy with a comprehensive package of measures, but the SNP Government is refusing either to publish it or to come up with one of its own. The Government should act quickly to remedy that.

We need more efficient financial instruments to support the move away from a reliance on fossil fuels. For example, the biomass industry has been disappointed that, until now, renewables obligation certificates have not covered the production of heat. I understand that things are changing, but there is not yet a commitment to the provision of heat ROCs. I hope that that will be resolved soon. It would help to encourage sensible and sustainable solutions for generating heat in off-gas areas.

I want the SNP Government to commit to a second round of the biomass support scheme. The first round, which was introduced by the previous Government, was a great success. The grants that were given generated an investment of around £6 million in the north-east alone, without counting the jobs that were created and the safeguarding of existing businesses such as sawmills. The multiplier was around three times the grant funding.

As many have said, we need to promote sensible microgeneration. That must involve a review of the planning processes. At present, small schemes for a single turbine can be subjected to the same scrutiny as megawatt wind farms, which discourages people from trying to make changes.

Liberal Democrats are ambitious for Scotland. The previous Administration transformed the prospects of renewable energy. The new SNP Administration is giving mixed messages and lacks clarity, which is risking confidence in Scotland's renewables industry. The key to success will be continuing the close partnership of Government, industry and academia that is represented by FREDS-the forum for renewable energy development in Scotland. I ask the minister to confirm his commitment to that forum.