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Official Report: search what was said in Parliament

The Official Report is a written record of public meetings of the Parliament and committees.  

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Dates of parliamentary sessions
  1. Session 1: 12 May 1999 to 31 March 2003
  2. Session 2: 7 May 2003 to 2 April 2007
  3. Session 3: 9 May 2007 to 22 March 2011
  4. Session 4: 11 May 2011 to 23 March 2016
  5. Session 5: 12 May 2016 to 5 May 2021
  6. Current session: 12 May 2021 to 19 June 2025
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Displaying 1071 contributions

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Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

I expect that Mr Ruskell is correct. I would need to go away and check for an update with regard to where we are now versus where the draft was in relation to the proportion of our 2030 target that is in train, in the planning process or in delivery. I am happy to look at whether there is an updated figure on the proportions.

Mr Ruskell’s assessment of the importance of the onshore wind sector deal is also correct. Industry has welcomed it. It is important not only for industry and the development of onshore wind, but for communities, so that we see demonstrable benefit and that people have a voice on those projects.

In spite of the fact that we do not have the power to enforce it on developers, the onshore wind sector deal commits the industry to consulting with communities where there is going to be an application at a much earlier stage. That means that there can be potential mitigations or changes to the way that the layout of the application comes forward, so that it answers community need. Critically, it also commits the industry to the Scottish standard on community benefit, which is £5,000 per megawatt generated. Again, we cannot mandate that, but industry is committed to that and it is an important leading principle.

We will work with industry, through the Scottish offshore wind energy council and the various bodies, to ensure that community benefit is strategically deployed so that we see the maximum economic regeneration and development coming from that finance, in order that communities that have energy and infrastructure on their doorstep can see demonstrable impact from that.

I declare an interest on that front, as there are substantial wind energy projects in and surrounding the community in Airdrie and Shotts, which I represent. I can already see some of the flow of money coming through from that and the community having a real agency over how that is deployed, which is incredibly welcome and is what we need.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

No, I did not say that. There is still an opportunity during this parliamentary session for hydrogen investment and for the hydrogen fund to be there. For this particular budget, however, I have not been able to prioritise money against that budget line. That is because I have chosen to prioritise ensuring that we kick-start the £500 million offshore wind supply chain commitment that the First Minister made. I prioritised that partly because I believe that it will help to catalyse hydrogen projects and also because there are other routes by which we can see continued hydrogen innovation happen; the hydrogen innovation scheme and the Scottish industrial energy transformation fund are two examples of that.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

We are exploring that as an option for ScotWind developments. There is complexity there; I assume that you are aware that the technology in offshore electrolysis is nascent, which means that we would still be transferring electricity onshore for electrolyser capability to happen. However, work is under way by some of the developers in the industry to see whether offshore electrolysis is possible and whether its use can be pulled forward.

That would be of particular interest to me because of the interest in Germany in a fixed hydrogen pipeline between Scotland and the continent. I believe that that has huge potential to see hydrogen production and investment continue. It would also take the pressure off the need for onshore transmission infrastructure to get electricity into the grid.

That would be a win-win situation, but your assessment is correct that we will need significant private investment. Part of what we are trying to do with our finances and the finances that are available to us is to try to catalyse some of that development to de-risk some of the investments by using public finance as best as possible. That is why the green industrial strategy, which will be published before the summer, will be so important. It will point out the direction of travel for our supply chain finance, which will give certainty to the industry. I do not want to prejudge where the work on the green industrial strategy will come out, but I would be surprised if ScotWind were not right at the top of the priority list.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

Yes. There are also UK Government interactions here. I am keen to see more work done on the transportation, storage and regulation that is required for hydrogen to come forward, so that we can provide certainty to the industry about what the expectations will be, and to see whether the UK Government is as committed as we are to that fixed link, because that is what will make the difference. If investors and developers know that there is a market and a route to market, that makes a substantial difference to their investment decisions. A fixed link will be a transformational element.

There will be differences of opinion as to what the best use of hydrogen, particularly green hydrogen, will be. The opportunity that we have before us in terms of industrial decarbonisation, the decarbonisation of transport and the potential for the decarbonisation of energy—as well as the export potential—makes green hydrogen a big opportunity. It will largely be dependent on how we get on with the development of ScotWind.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

Yes, although in the hydrogen space I go back to the fact that the hydrogen innovation fund and the Scottish industrial energy transformation fund will also continue, so there are still routes for us to invest in hydrogen projects.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

Mr Macpherson’s assessment is correct.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

I would be happy to provide the full figure once the meeting has been had at the end of this week.

Obviously, the figure of £42.5 million that we are giving for the year takes account of the fact that 801 is at an advanced stage, so it is a reduction from what we invested last year. The updated cost-to-complete figure is £130 million for hull 801 and £110 million for hull 802.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

That is a separate discussion that is under way. There was an application for capital investment to update the yard and enable it to be more competitive. We want to see greater productivity at the yard to allow it to compete on its own merits for further work. Various strands of work are on-going to try to secure further work for it, and specific conversations are happening to update the business plan and the financial model around potential further capital investments, in order to ensure that they comply with subsidy control. Those discussions are on-going, and we are working directly with the yard on ensuring that it can be compliant.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

No. That will be a discussion to be had based on the finalised plan that comes forward from the yard. Once we have that plan, we will consider whether we can finance it and where that finance would come from.

Net Zero, Energy and Transport Committee

Budget Scrutiny 2024-25

Meeting date: 23 January 2024

Neil Gray

That is what I am saying—that will be a separate consideration. It is going to be a separate—