The energy off our shores

Scotland has long had reason to associate the waters off our coast with the production of energy and wealth in the shape of the North Sea oil industry. Over the decades it has provided jobs to many in the North East, seen innovations made that have been exported around the world and of course provided billions of pounds to the Treasury in London.

Latest Treasury estimates anticipate that the North Sea oil and gas sector will provide £50 billion in tax revenues over the next six years, a particularly substantial sum given the dire state of the UK’s current finances. Yet as significant as the oil industry has been, and clearly continues to be, Scotland has an incredible opportunity to harness a new energy boom in the waters off our coasts.

Scotland has a quarter of Europe’s offshore wind and tidal energy potential and 10% of its wave energy potential. The scale of the green, renewable energy that can be produced in these waters is immense and has granted Scotland an incredible economic opportunity which we must do our best to take.

It is an opportunity that Banff & Buchan can play a key part in grasping, securing important investment in the area and providing a range of skilled jobs for local residents. Peterhead was recently identified as one of Scotland’s 11 strategic hubs for the future of offshore renewables, a designation that could prove critical to the economic future of the region. A report to be published later in the year will identify the public and private investment needed to create the infrastructure and facilities needed to make Peterhead a centre for the manufacture and maintenance of offshore renewable technology.

As with the oil industry, a key benefit from successfully harnessing the renewable potential off our shores will be the ability to export technology and expertise to other countries. Our aspirations of achieving this took a step forward recently with the announcement of the most ambitious plans in the world for the leasing of sites to generate 1.2 G/W of wave and tidal power, the equivalent of either of Scotland’s nuclear power stations. With such ambition we have stolen a march on our competitor countries, but there can be no room for complacency.

There are still obstacles that must be overcome, and chief amongst them is the discriminatory nature of transmission charges in the UK. When electricity producers in Aberdeenshire face a charge of almost £20 per k/W that they send to homes and businesses through the National Grid while companies in the south of England receive a subsidy of over £6 per k/W, there is clearly something very wrong with the system.

By penalising the development of renewable energy projects, which are inevitably located in more remote areas where the local weather conditions are more powerful, the current system is acting as a deterrent to future developments. As it is these penalties are completely unacceptable, but the situation would have been even worse if Ofgem had not finally been persuaded recently to drop plans to further penalise Scottish generators.

A National Grid that sees Scottish generators currently produce 12% of UK electricity but pay 40% of transmission charges is not acceptable and as more and more renewable developments are created, the situation will become even more unfair. My SNP colleagues and I have long been calling for a wholesale review of UK transmission charges and the introduction of a fairer system. The economic future of Scotland is at stake and we will not let up on our calls.