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We commissioned EY to undertake a substantial piece of analytical work, this has now been published and is available to view here – Energy System and Just Transition Analysis

Early outputs informed the ESJTP to help us better understand the implications of the transition to net zero on the energy system, including oil and gas, and to help us plan for a just transition across the sector.

This research will help us determine how the sector can help deliver our net zero targets, and how meeting our own energy needs can help build a new low-emission energy industry.

As the draft Strategy sets out, irrespective of the climate imperative, due to the maturity of the North Sea basin, planning for a just transition to a net zero energy system and diversifying employment and economic opportunities for workers is essential. Scotland’s energy transformation is therefore urgent and inevitable.

In establishing a renewed policy position on oil and gas, whilst licensing is reserved to the UK Government, the Scottish Government is consulting on whether, in order to support the fastest possible and most effective just transition, there should be a presumption against new exploration for oil and gas.

The draft Energy Strategy and Just Transition Plan is an open consultation and as such requires statutory assessments to be undertaken. Some assessments have already been published and the others will be available with the final document.

National Planning Framework 4 (NPF4) signals a turning point for planning, placing climate and nature at the centre of our planning system and making clear that significant weight is to be given to the global climate and nature crises when considering all development proposals. NPF4 policy 11 (energy) supports all forms of renewable, low-carbon and zero emission technologies, including repowering, expanding, and extending the life of existing wind farms. Where proposals meet relevant thresholds, they will also be considered ‘National Developments’ meaning the need is established in principle, and does not need to be assessed again at the consenting stage.

Our NPF4 Delivery Programme, the first iteration of which was published by the Scottish Government in November 2022, is an important tool that sets out the approach for implementing NPF4, including delivery mechanisms, governance and funding. The Delivery Programme identifies a range of priority actions, delivery partners and anticipated timescales.  

The Delivery Programme is available at https://www.transformingplanning.scot/mdeia/3136/national-planing-framework-4-delivery-programme-for-publication-2-November-2022.pdf.

The Scottish Government is investing £79.5 million, an increase of almost 60% from 2022-23, to deliver climate action through an updated climate change plan and Scottish adaptation programme, a public engagement strategy and community action.

The Scottish Government will provide £50 million in capital and financial transactions to support the Just Transition Fund for the North East and Moray to accelerate the development of a transformed and decarbonised economy in the region. This increase from 2022-23 is part of the Scottish Government's commitment to spend £500 million over ten years.

The Scottish Government will also continue to influence positive and progressive international climate action investing at least £6m in the Climate Justice Fund.

The Scottish Government’s financial commitments to create green jobs include funding support provided through our Green Jobs Fund and the Just Transition Fund.

The Green Jobs Fund is a five-year, capital fund of up to £100m over 5 years which will support businesses and their supply chains to help them better transition to a low carbon economy and create new green jobs. In year one of the Green Jobs Fund, between the Enterprise Agencies and Scottish Ministers, 57 projects have been supported with grant funding of £16.8m. Figures provided by the recipients of these awards estimated this fund will support up to 3,886 jobs over the life of the individual projects. Figures for year 2 of the fund are not due to be published until Q2 2023 as contractual negotiations are continuing to be finalised.

The fund consists of £50 million provided by our Enterprise Agencies for businesses which provide sustainable or low carbon products and services to help them develop, grow and create jobs and up to a further £50 million to help ensure that businesses and supply chains across Scotland can capitalise on our investment in five priority sectors: energy transition; transport; manufacturing; construction; agriculture and land use. The Green Jobs Fund will make focused investments in, for example, machinery and equipment and research and development to ensure businesses are well placed to win public and private contracts.

Our Just Transition Fund is a ten year, £500m investment to support a fair transition to net zero and to diversify the regional economy, with the first £50m committed this year. Examples of the projects supported in the first year of the fund include a digital offshore energy skills passport which empowers offshore workers to utilise their existing certification; and an advanced manufacturing skills hub.

The Scottish Government also ring-fenced £1m of the Just Transition Fund this year for participatory budgeting, whereby local communities are able to influence and have a direct say on how money is spent in their local areas.

The Scottish Government is determined to maximise the economic opportunity for the Scottish supply chain from our offshore wind potential. That is why we asked Crown Estate Scotland to introduce the Supply Chain Development Statement as part of the ScotWind leasing round to demonstrate how serious the Scottish Government is about holding developers to account if they do not honour their supply chain commitments and create green jobs.

ScotWind developers have committed to invest an average of £1.4 billion per project, equating to more than £28 billion of potential investment in Scotland's supply chain. Government and its agencies continue to work closely with developers and those at the top of the supply chain to ensure that local suppliers in Scotland have a realistic opportunity to compete for key manufacturing contracts.

We are already seeing the employment benefits from the development of Scotland’s offshore wind sector. Scotland is the best performing UK region in the Green Jobs Barometer, a tool to track job creation, wider employment benefits, job loss, carbon intensity of employment, and worker perceptions with relevance to the green transition.

Engagement events in summer 2022 were part of a series of engagement sprints that have informed the draft Energy Strategy and Just Transition Plan (ESJTP). The draft ESJTP is currently open for public consultation and we welcome views from as broad a spectrum of respondents as possible. A series of open engagement events are currently in preparation to which Aberdeen City Council will be invited.

On 9 February 2023, the Minister for Just Transition, Employment and Fair Work met representatives of Aberdeen City Council to discuss the Just Transition Fund.

I met with the oil and gas industry to discuss the draft Energy Strategy and Just Transition Plan at the following engagements:

• Cabinet Secretary NZET briefed Melfort Campbell, co-chair Strategic Leadership Group on the draft ESJTP on 10 January
• Cabinet Secretary NZET briefed Sir Ian Wood on the draft ESJTP on 10 January
• Officials briefed Equinor on the draft ESJTP on 10 January
• Cabinet Secretary NZET briefed David Whitehouse, oeuk, on the draft ESJTP on 10 January
• Cabinet Secretary NZET briefed SEAB on the draft ESJTP on 31 January
• Cabinet Secretary NZET due to engage with David Whitehouse, oeuk, on 8 March

In addition to the above engagements, officials are due to speak to oeuk on 6 March and further official and ministerial engagements with the industry are being planned throughout the consultation phase of the ESJTP.

The Scottish Government has provided funding to support job retention during energy transition in Aberdeen through a number of projects. Some are focussed on the North East, while others are nationwide. Many Scottish Government schemes and policies support ‘job retention’ directly or indirectly, therefore this is not an exhaustive list.

The £12 million Oil & Gas Transition Training Fund announced in 2016 was a three-year fund to support workers from the oil & gas sector at risk of redundancy. It supported over 4,000 people, surpassing the 1,000 participants planned for each of the three years the fund was in operation.

Starting in 2017, we are investing £125 million over 10 years in the Aberdeen City Region Deal to support Aberdeen’s ambition to become an energy transition capital, providing significant investment to diversify its economy and support job retention.

Our 2021-22 budget also included an allocation of £14.3 million through the North East Economic Recovery and Skills Fund (NEERSF) to tackle the dual impact of the Covid-19 pandemic and the downturn in oil and gas. Courses delivered via the Fund covered entrepreneurship and broader provision linked to the local labour market, including the transition to net zero. A report on the Fund is due to be published in March 2023.

£3.5 million of this allocation from NEERSF was spent in the two financial years 2021-23 on projects linked to jobs supporting the transition delivered by partners including the Energy Transition Zone, Robert Gordon University, Opportunity North East and the Aberdeen and Grampian Chamber of Commerce. The Energy Transition Zone skills funding from the Energy Transition Fund for 2021-2022 and 2022-2023 was £519,000.

Our £500 million Just Transition Fund is also supporting the North East and Moray and we have committed £50m of the Fund in financial year 2022-23 to help businesses, communities and individuals to transition to net zero, creating jobs in low carbon industries and contributing to the region’s future prosperity.

The consultation on the draft Energy Strategy and Just Transition Plan is currently open, and available for Aberdeen City Council and others to respond to. We will publish a list of organisations that responded in due course.