Oil and gas contributed £9bn to Scottish economy in 2019, according to Annual Energy Statement

The oil and gas industry contributed £9 billion in gross value added to the Scottish economy last year, more than 5% of GDP.

A new report by the Scottish Government revealed the industry supported around 101,400 jobs in 2019, while 82.3% of North Sea produce was exported, worth an estimated £25bn in turnover.

Scotland also relied on oil and gas for 78.4% of its energy consumption and for 91% of its heat demand.

In the Annual Energy Statement, Holyrood reemphasised the “key role” the sector has to play in supporting the transition to a net zero economy.

It also said efforts to decarbonise offshore operations would make a “significant contribution” to climate change efforts and support a just transition.

Carbon capture and storage was highlighted as one of the developments necessary for reducing emissions, with the Scottish Government describing it as a “vital component”.

Work is ongoing across the UK to scale up the technology, with the Acorn project at St Fergus in Aberdeenshire touted as being one of the “most advanced” projects.

On the renewables side, Scotland generated enough electricity from green sources last year to meet the equivalent of 90.1% of the country’s gross demand, enough to charge almost 6.7 billion mobile phones for a year.

The report also revealed that the amount of renewable heat produced was equivalent to the gas use of every building in Glasgow.

Overall, the amount of electricity, transport and heat energy produced north of the border from sustainable sources increased between 2017 and 2018 to 21.1%.

Scotland’s “long established” hydro resources, as well the “huge strides” that have been made in onshore and offshore wind, were held up as the reason for the improvements.

In 2019, there was a net export of 15.9 terawatt hours of renewable electricity with an estimated wholesale market value of £740 million.

However, Holyrood said that there is “more that needs to be done” around the minimal Contract for Differences for specific technologies.

That includes wave and tidal wind, both of which were described as presenting a “tremendous opportunity”.

Scotland’s energy minister Paul Wheelhouse said: “This year’s Energy Statement shows that we are continuing to make strong progress towards building a greener, fairer and more equal society and economy and to meeting our world leading climate change targets.

“In particular, we continue to make good progress in areas such as renewable electricity with, in 2019, Scotland’s renewable electricity generation having grown to such an extent that it was able to meet the equivalent of 90.1% of Scotland’s gross electricity consumption making 2019 another record breaking year for the sector.

“However, to decarbonise our energy intensive industries, heat in buildings and transport through electrification and other means like hydrogen, we know we need to continue to grow our renewable electricity supplies further.

“Our recent Climate Change Plan update, published this week, contains more than 100 new policies and proposals to support Scotland’s green recovery and a just transition to net zero.

“The plan provides clear market signals which should give businesses the confidence to invest in a low carbon economy, hire and train people and grow the market in these areas.

“This will enable us to deliver emissions reductions in a way that is fair and leads to a thriving net zero economy in the future and to replicate, for other sectors like heat, the great success we have seen in electricity generation.”

Morag Watson, director of policy at Scottish Renewables, said: “The figures announced by Scottish Government today demonstrate without a shadow of a doubt that renewable energy is now mainstream.

“Technologies like onshore and offshore wind, hydro power and solar are providing the equivalent of more than 90% of Scotland’s electricity demand, as well as providing environmental and economic benefits across the country.

“With some of the world’s most challenging climate change targets, much work still to do on removing the carbon from heating and the UN’s COP26 climate conference coming to Glasgow in 2021, we look forward to working with governments in London and Edinburgh to build on these figures to show Scotland can truly lead the world in renewable energy.”