I don’t have time to read much fiction these days, but the recent flood of reports on renewable energy policies in the UK makes up for that.
The Scottish Government, the UK Government and the European Commission (EC) have all published new targets for renewable energy production.
At the end of June, the Scottish Parliament passed the Climate Change (Scotland) Bill, which sets targets for the reduction of greenhouse-gas emissions up to 2030 and was claimed to be the most ambitious climate-change legislation anywhere in the world.
The bill commits Scotland to reducing its emissions by at least 80% from 1990 levels by 2050, with an interim reductions target of at least 34% by 2020 – or 42% if the EU increases its 2020 target to 30% in the event there is a global agreement on climate change at Copenhagen later this year. These targets are obviously very ambitious.
A more accurate description, however, is wishful thinking. As an economist, I believe the targets are unachievable.
The bill was accompanied by A Climate Change Delivery Plan. This is a glossy document full of nice pictures and phrases but devoid of any realistic content.
It is easy for Government ministers, at both Scottish and UK level, to set ambitious targets. It is also easy for civil servants to write documents like the delivery plan. They will almost certainly not be around in 2020, never mind 2050, when people can check the predictions against reality.
The Climate Change Delivery Plan highlights “four transformational outcomes” – not my words – including a largely decarbonised electricity generation sector by 2030 and similar proposals for the heat sector (by 2050) and road transport (also by 2050).
I do not have space to cover all of these, so let me concentrate on electricity generation as the example. The outcome envisages that at least 50% of electricity in Scotland will be generated from renewable sources by 2020.
At the present time, approximately 35% of our electricity is generated by nuclear power stations, 25% from coal, 12% from gas, 8% from hydro and 20% from other sources. Three thermal power stations currently account for about 30% of total Scottish emissions – Longannet (coal), Cockenzie (coal) and Peterhead (gas/oil).
Cockenzie is scheduled to close by 2015, but the other two should still be operating well after 2020. Work is under way to reduce emissions at Longannet, but that is an expensive and long-term challenge.
Plans to invest in a carbon capture and storage (CCS) plant at Peterhead were abandoned last year because of a lack of UK Government financial support.
The delivery plan is vague about how the emissions from the thermal power plants will be reduced sufficiently to meet the 2020 targets.
Further, the authors of the delivery plan appear to be unaware that we have two nuclear power stations in Scotland at Hunterston and Torness which currently account for about 35% of our electricity supply. They may close by 2020. How will their share be replaced?
The civil servants know of the existence of Hunterston and Torness, of course. The failure to discuss them is because of the SNP Government’s anti-nuclear policies. The UK Government is firmly committed to building new nuclear power stations, partly to replace ones closing down, but in the current political environment, none of those will be built in Scotland.
Thus, the great white hope is renewable energy, notably from windfarms – onshore and offshore – and in the longer run, marine energy from areas such as the Pentland Firth. The delivery plan should demonstrate how the ambitious targets for renewable electricity production will be delivered, but sadly, it does not.
There are no estimates of the investments required and how the vast range of projects can, or will, be financed. As an economist, I wanted to see cost-benefit analyses of different scenarios, including a nuclear option, but there are none – just pretty pictures and flowery words.
How will grid connections from the proposed offshore windfarms be financed? How will the Beauly-Denny Interconnector, which I expect the Scottish Government to approve very soon, be financed? And carbon capture and storage projects at Longannet and Peterhead? Many similar questions can be asked.
In principle, I support the Scottish Government’s ambitions to reduce emissions and to increase renewable energy production – as well as those of the UK Government and the EC.
As an economist, however, I want to see realistic cost estimates and implementation plans so we can all contribute to meaningful debates on the options. The Climate Change Delivery Plan, like most similar documents, does not provide that.
Tony Mackay is MD of economists Mackay Consultants
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