An opportunity slipping away

In my column a few weeks ago I wrote about the hope that was growing that Peterhead power station could once again be in line to benefit from the development of carbon capture and storage (CCS) technology. Previous efforts to bring this world leading technology to Peterhead collapsed in 2007 as a result of UK Government dithering and the project was transferred to Abu Dhabi. Meanwhile the hopes of a separate project at Longannet in Fife were brought to an end a few months ago, again by a lack of sufficient support from the UK Government.

It was this most recent failure to support Longannet which many believe has put Peterhead back at the head of the race for support from a £1 billion fund to develop the technology. Such a project could create an estimated 937 jobs over the construction and lifetime of the project, providing a real boost to the economy of Banffshire & Buchan Coast.

I wrote in that column that Westminster had twice failed Carbon Capture projects in Scotland and it simply must do better with the opportunity Peterhead represented. How infuriating then, that just a few short weeks later the Treasury has delivered a hammer blow to the future of this project.

At the time the plans to fund a CCS plant at Longannet collapsed, UK Ministers promised that the £1 billion fund would be ring-fenced for a new carbon capture competition and it was widely expected that the funds from this would be disbursed within this Westminster parliamentary term. However, all that was undermined by a recent radio interview in which Danny Alexander revealed that the Treasury had raided that funding to reallocate to different sorts of projects.

This means that the UK Government intends to spend little to nothing on developing CCS technology before 2015, pulling the rug out from underneath investment plans that were gathering pace following a recent deal between Scottish & Southern Energy and Shell. With financial and political uncertainty obscuring what money will be available following 2015, the certainty that businesses need to invest in this technology has been shattered at a stroke.

History seems once again to be repeating itself and the UK Government has for the third time undermined the future of CCS technology and severely let down a local community in Scotland. I am appalled by the ineptitude that has again been displayed and I have no doubt that there will be real anger in Banffshire & Buchan Coast, especially from the many people who would be hoping for jobs as a result of this project.

Progress on emissions

Developing new technologies such as CCS has a huge part to play if Scotland is to meet our world leading carbon emission reduction targets of 42% by 2020 and 80% by 2050. Significant progress is already being made, however, with an audit Scotland report showing that Scotland has successfully reduced its greenhouse gas emissions by 28% in the period to 2009.

There is still a long way to go and we cannot afford to be complacent or let up in our continuing efforts if we are to reach those targets. Even in these difficult financial times, we should not accept anything other than further progress towards meeting these targets and seizing the economic opportunities that they also represent.

Developing technologies to harness the vast wind, wave and tidal energy resources that Scotland enjoys will play a key part of our economic future and the level of investment that is already taking place demonstrates how confident businesses are in our energy future.