2030 and all that: Scotland’s journey to net zero greenhouse gas emissions

On May 8th this year I was invited to give a short speech at a dinner hosted in Glasgow by the Gas and Electricity Markets Authority (GEMA), the Board of the energy regulator, Ofgem. As well as the members of GEMA, the dinner was attended by senior figures from Ofgem and a number of external stakeholders. It was tough brief: I’d been asked to talk about emissions reduction in Scotland, to do it in 10 minutes, and to speak in between the starter and main course. That is, I was going to be keeping people from their food!

That all feels like a very long time ago. The first thing I said that evening was that it had been a dramatic time in Scottish politics with the dropping of the 2030 emissions reduction target and the resignation of the First Minister. It’s been an even more dramatic time in UK politics since then.

I’d been about to publish what I said on May 8th when the General Election was called. I was advised that, due to my role on the Climate Change Committee, I was covered by civil service pre-election rules on public engagement on policy-related matters so I held back. However, with the renewed interest in emissions reduction policy at a UK level, I thought perhaps what I said in May about what was happening in Scotland might still be of interest. If you agree, please read on.

Have we been making enough progress in reducing emissions?

It’s been a dramatic time in Scottish politics in recent weeks with a close connection to policy on emissions reduction. What’s been happening in Scotland has even been getting attention from London-based media.

It was announced by the Scottish Government on April 18th that it would be bringing forward legislation to drop the target for a reduction of greenhouse gas emissions of 75% by 2030, relative to 1990 levels, and introducing a new set of targets based on 5-year carbon budgets.

Scotland’s 2030 target was always going to be a stretch but the Climate Change Committee (CCC) concluded in its report published in March that meeting it is no longer credible. In respect of progress across four key sectors – transport, buildings, industry and agriculture – Figure 1 shows why the 2030 target would be so difficult to achieve: progress in the last 10 years has not been enough leaving too much to do in the next 6-7 years. This is shown even more clearly in Figure 2 where the electricity sector becomes fully decarbonised by 2035 in line with the UK Government’s target and other sectors’ emissions fall to net zero by 2045, consistent with Scotland’s target.

Getting low carbon electricity from where it’s produced to where it’s used

We can see from the charts that progress over the years in reducing emissions from electricity production has been very good. Wind farms located in Scotland have been instrumental in reducing GB-wide emissions. As we know, there is enormous potential for further wind generation onshore in Scotland and in Scottish waters. However, as we also know, there is a major challenge in developing enough transmission network capacity to get the power from generators to demand.

We can think of the need for the electricity transmission network in terms of how much power, measured in megawatts, needs to flow over what distance, measured in kilometres. The power flows change from hour to hour as demand and the availability of power from renewables in different parts of the country vary and give us a set of MWkm numbers.

As a way of gauging the impact of the transition to a low carbon electricity system and the locations of different resources, we can compare how far each unit of electrical energy flows and the MWkm figures over a year in the recent past with what they will be in the future. Focusing only on the bulk flows between regions and neglecting the collection and distribution of power within regions, some recent modelling by Simon Gill and I for the Offshore Renewable Energy Catapult suggests that, if the transmission network had infinite capacity, the average distance travelled by each MWh of electricity in 2022 would have been 113 km. In the 2035 scenario that we modelled, it’s around 160 km. The highest total megawatt-kilometres of flows in any hour in our simulation of 2022 was 8.8 million; in 2035 it’s 25 million, nearly a threefold increase.

We can also see the impact of network limits: the maximum MWkm flow in 2022 would have been reduced from 8.8 million to 6.5 million. In 2035, even with National Grid ESO 's planned network reinforcements from the ‘Holistic Network Design ’, it’s 13 million, only 52% of the unconstrained peak but still more than twice the network-constrained maximum MWkm figure in 2022.

This hopefully gives us some idea of just how much extra transmission network capacity we need to build. One of the biggest challenges with transmission, as the Electricity Networks Commissioner observed last year, is in getting developments quickly through planning. However, we also need the planning system and its associated machinery to be capable of quickly processing generation applications, something that seems to have been a problem recently in respect of approval for Berwick Bank offshore wind farm .

Don’t forget about the demand side

The supply side of the energy system continues to need attention. However, while it would be unfair to say that the demand side has been completely neglected, we do now need to see significant progress there. It’s not going to be easy to get changes in how energy is used in industry, in buildings and in moving people and goods around.

One of the best options for heating buildings in densely populated urban areas is district heating, provided we can access low carbon sources of energy. One option there is large scale water source heat pumps. (Every large city in Scotland has access to large waterways). We also have challenges presented by our relatively old housing stock and high rural population although the latter does offer the opportunity of long-term cost savings through electrification in place of fuel oil.

Notice that I referred to long-term cost savings. We can’t avoid the fact that the capital costs of heat pumps and electric vehicles are high, and that, in general, they need new infrastructure, whether that’s charge points, a beefed-up electricity distribution network or new radiators and insulation in a home. Although, note, those infrastructure developments only need to be done once, and not all of them are needed everywhere.

A just transition

The energy transition is only going to be achieved if it’s seen to be fair or “just”. That doesn’t just mean a graceful ramping down of the oil and gas sector and enabling of jobs for workers in that sector in other sectors, important though that is. (That would need to happen anyway, regardless of the climate-driven need to reduce demand for fossil fuels, as the volume of what can be extracted from the North Sea shrinks. And, by the way, we need to start thinking seriously about how to decommission large sections of the gas network at reasonable cost and how to cover that cost).

A just transition also means that the overall costs – and benefits such as lower energy bills and cleaner air – are shared fairly. According to analysis published over the last year or so by the CCC and by The Royal Society , the average “system cost” of electricity in a renewables-dominated system should be lower – much lower – than the average forward wholesale price in GB last year.

Here’s the challenge for all the energy economists, which I’m sure they’re well on top of: how do you design a market that ensures that energy users benefit from those low costs; that supply of electricity is sufficiently reliable; and that investment in the right mix of facilities is encouraged? That’s not easy when you have a heterogeneous system with some energy sources having zero marginal cost (and highly variable availability), and others having a very high marginal cost.

Dealing with variability in the energy system

An energy system needs to find a way of dealing with the variability of demand and, as we lean ever more heavily on renewables, of supply. In the past, we did that through an ability to store molecules. Although the cost of storing an electric charge has come down dramatically, it’s still expensive so it looks like there is still a role for molecules, but molecules of what?

The lightest atom in the periodic table, hydrogen, featured heavily in the Scottish Government’s draft Energy Strategy and Just Transition Plan , seemingly as a way of squaring longevity of the oil and gas sector with decarbonisation.

I agree that some kind of storable fuel manufactured by low carbon means, most likely hydrogen, is enormously important as it offers a two-way street between electrons and molecules, and a way of moving terawatt-hours of energy between one week and another. However, let’s not get carried away just yet with things like export potential, or continue to be distracted by arguments about just how big the demand for low carbon hydrogen will be. We can be pretty confident that we’ll need a lot. As the CCC has noted on numerous occasions, there are low regret actions that we need to get on with now .

That includes, urgently, a need to get into the detail of what works where for a low carbon hydrogen system, with a full understanding of geography (access not just to electricity but also water for electrolysis and salt caverns for large storage capacity) and how hydrogen gets paid for in a way that doesn’t distort things on the demand side relative to direct electrification.

Choice on the demand side

The Climate Change Committee and the National Infrastructure Commission have expressed, to say the least, scepticism about the role of hydrogen in heating buildings . The challenge of low carbon heat in buildings remains. I’m delighted to see, finally, some bold proposals from the Scottish Government in the Heat in Buildings Bill . Of course, one of the challenges in delivering what that Bill aspires to is bringing people – energy users – along with what’s intended.

One of the things that’s struck me most about the various climate assemblies convened over the last few years is how much people support the energy transition but want to be able to exercise choice in how it’s achieved. That’s going to be difficult when the most cost-effective delivery mechanisms depend on a critical mass, such as a baseload of users for a heat network, or systematic street-by-street insulation improvement, heat pump installation and unlooping of ‘looped’ electricity network connections. There’s also the matter of consumer protection once you’re on a heat network.

As we know, “choice” is something that retail competition was supposed to open up but, to me, it wasn’t working particularly well even before the energy price crisis of the last 30 months or so. On the other hand, there are some positive developments with one or two of the big retailers getting into delivery of low carbon heating systems and offering time of use tariffs.

In spite of the information provided by Home Energy Scotland, which I’ve personally found to be rather sketchy, choice is still something that’s difficult to navigate if you want to get a low carbon heating system in your home.

It seems to me that “choice” when you still need a majority to sign up for something, whether it’s a heat network or deciding what kind of electricity network development you can live with, depends on well-functioning democracy. In principle, devolved government in Scotland, effective local authorities and good relationships between the Scottish Government and local authorities give Scotland a better chance of doing that than England. I also note, in passing, the importance of the new National Energy System Operator – the NESO – not just in coming up with credible plans but also getting stakeholder buy-in to those plans in every region.

Supply chains and people

Another key thing for delivery is supply chain capacity and skills, which of course depends on the supply of suitably trained and educated people. This is fundamental to the Just Transition.

A critical dimension is craft and technician skills, such as for heating systems and power networks. Training for these depends, to a large extent, on what are too often the Cinderellas of the education sector: Further Education colleges.

Although education in Scotland faces significant challenges, I’m pleased to say that my own experience is that Scotland punches well above its weight in delivering good graduates keen to work on the energy transition, in particular engineers not just for Scotland but for the whole of the UK. For example, 英国斯特拉斯克莱德大学 is just one of 8 full university partners in what I think is a great scheme to attract engineering undergraduates into the electrical energy sector, the Power Academy , but has supplied around 45% of the students since the scheme started in 2004.

Good access to talent in Scotland is reflected in so many companies – and Ofgem – opening large offices in my home city of Glasgow, the Electricity System Operator (ESO), soon to become the NESO, being the most recent of them. However, that creates a problem: there are lots of employers competing for a limited supply of people. How can we deliver more? And how can universities help to bootstrap the energy sector’s knowledge about things it’s never seen before, such as how hundreds of large power electronic inverters interact with each other? One way is through doctoral training related to the electricity system which, in my opinion, public funders of research have paid far too little attention to. I know through my own contacts, with Scottish Power, SSE, the ESO and others, that the industry is keen to support PhD research but access not just to the new knowledge but the people doctoral training delivers is slow and expenditure on large numbers of scholarships is difficult to justify to their finance officers.

A just transition and the future

To wrap up, here’s arguably the biggest challenge for policy makers and regulators. A low carbon transition is only just for future generations if it happens, and if it happens quickly enough. How do we value the interests of our children against our own, present day interests? That includes not just investment in reducing emissions but also in adapting to climate change and being sufficiently resilient.

We will soon not have an emissions reduction target for 2030 in Scotland, but we need to get on with things in the transport, buildings, industry, land use and agriculture sectors as if there is.

Here are some final bits of good news. In spite of the cost of living crisis and politicians’ apparent reluctance to make the case for the harder demand side parts of the energy transition, repeated surveys, climate assemblies and so on show that the vast majority of people understand that we need to look after the interests of the next generation and that the impacts of climate change are things we can’t deny. And, if we get the system design right, both commercial and physical structures, we won’t have to wait too long to see the benefits of low carbon energy for bills, warm homes and clean urban environments.

It's said that where there’s a will there’s a way. In Scotland, I believe there’s a will. Can we deliver the way?

Thanks again to Calum Mackinnon for allowing me to use one of his lovely photos. See his LinkedIn page for more of what he's been up to.

Notes on the figures:

1. Data sources: Climate Change Committee, Progress in reducing emissions in Scotland – 2023 Report to Parliament, March 2024. National Atmospheric Emissions Inventory (2023) Greenhouse Gas Inventories for England, Scotland, Wales and Northern Ireland: 1990-2021; CCC analysis. Notes: Historical emissions are not available for the years 1991-1993 and 1996-1997, so the values for these years are interpolated from the data points for 1990, 1995 and 1998. The dashed line shows temperature-adjusted buildings emissions, which are adjusted for differences in heating demand due to year-to-year variation in temperatures.
2. Data sources: Climate Change Committee, Progress in reducing emissions in Scotland – 2023 Report to Parliament, March 2024. National Atmospheric Emissions Inventory (2023) Greenhouse Gas Inventories for England, Scotland, Wales and Northern Ireland: 1990-2021.