A challenging and exciting time for renewables project development in Scotland.

With the Scottish and UK Governments having set testing climate change targets, it is encouraging that there is significant additional capacity in renewable energy development across Scotland, with projects either in planning or already consented totalling over 12GW.

Capacity increases in the short term will come from onshore wind, with over 3.9GW of capacity already consented and a further 1.9GW in planning. In addition, there are 258MW of solar projects at various stages of development with 382MW of wave and tidal projects either in the planning process or already consented.

Onshore Wind

Onshore wind has been the significant success story in the last decade. Scotland currently has around 8 GW of onshore wind installed and it is the largest renewable energy source in the UK. The industry has however been subject to significant political and regulatory uncertainty over the last decade, none more so than in 2015, when subsidies were removed for new onshore wind projects.

Despite that, 2017 saw a record number of onshore wind turbines installed as developers rushed to construct and meet the government deadline for securing subsidies. A record generating capacity of 2.6GW was installed in 2017.

Offshore Wind

The UK already has the largest operational offshore wind capacity of any country, and a further 7 GW is under construction or with contracts secured. The Government’s announcement of support for an additional 2GW of offshore wind per year in the 2020s could deliver up to 16GW of new capacity, generating approximately 20% of UK electricity.

Burness Paull have been involved in the financing and development of the three offshore wind farms currently under construction in Scotland – Beatrice, Moray East and Neart na Geoithe. These projects represent three of the most significant infrastructure projects in Scotland in the next decade, with the financing package for the Moray East project consisting of a debt amount of £2.6bn.

The sector has been buoyed recently by a number of announcements, including the commitment to a Sector Deal for offshore wind (with the intention to create 27,000 jobs and generate 70% of the UK’s electricity from renewable energy by 2030), the commitment to future subsidy for offshore wind, and Crown Estate Scotland recently announcing new leasing rounds for developers in certain defined areas for new offshore wind projects.

Offshore wind is a sector that will only grow in both Scotland and the UK and has the benefit of strong Government commitment.

Waste and biomass projects

Scotland has long championed a zero-waste culture and there are ever-increasing opportunities to develop energy from waste projects capitalising on waste streams that are now being diverted from landfill.

In the social and local authority housing sectors, both gas and biomass district heating systems are becoming increasingly popular. In the private sector the ‘cost/benefit’ balance of such schemes is not so clear cut.

New technologies and markets

Advances in energy storage technologies, particularly battery technology, combined with a greater need for flexibility in the electricity system in the UK, has increased the viability of these technologies to contribute towards developing a more dynamic electricity system. The industry is behind the development of energy storage due to the multitude of benefits that it can provide - for example, in respect of security of supply and co-location with renewables - as well as by system operators (such as ScottishPower Energy Networks and National Grid) for managing voltage fluctuations and avoiding the need for large scale infrastructure investment.

The move towards new technologies, such as battery storage, has been accelerated by other technologies (onshore wind, solar, offshore wind etc) becoming more mature, and in some cases, having subsidies removed. Developers are now seeking alternative ways of developing renewable energy projects to participate in various other energy markets, including the Capacity Market, Enhanced Frequency Response and Short Term Operating Reserve.

Electrification of transport / infrastructure

Almost a quarter of our emissions come from domestic and commercial transport. Politicians have already set the direction of travel for the growth of electric vehicles (EVs), with the Scottish Government pledging to phase out new petrol and diesel vehicles by 2032 and the UK following in 2040.

As a country however, we are not yet equipped to meet the expected growth and uptake of EVs and this is an area which represents a significant opportunity for a variety of key industry stakeholders and developers in the coming decade.

The development of infrastructure for EVs, the commercial and domestic charging network required, the sale and electricity of power, the advances in technology etc, will all have an important part to play in the ultimate success of EVs.