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The Scottish Government welcomes the publication Making the Switch, prepared by the Energy Transition Institute at Robert Gordon University, with funding from the Scottish Government through the North East Economic Recovery and Skills Fund . It highlights the potential for the North East to become a net zero energy hub that supports workers in existing oil and gas roles into the renewable and low carbon jobs of the future. In the Goldilocks zone, there is synchronous decline in the traditional oil and gas sector and uptick in renewables and low carbon, with workers able to transfer readily between energy sectors.

The Scottish Government is supporting the development of new skills and jobs in the North East through a number of programmes. These include the Energy Transition Zone skills programme which will accelerate the growth of a globally integrated energy cluster, creating 2,500 FTEs in Aberdeen at its peak and catalysing a further 10,000 energy transition related jobs in the region.

The Global Underwater Hub Skills programme, also funded through the Energy Transition Fund, is focussed on the technical skills, management and leadership capabilities required to meet the local and global demands of the growing underwater sectors and changing business environment. Detailed skills mapping will be carried out to highlight gaps in the current industry skills pool and identify areas of shortfall around future, new and growth areas. Strategies to tackle any gaps will be developed in collaboration with Skills Development Scotland (SDS).

The Scottish Government’s Green Jobs Fund is a five-year, capital fund of up to £100 million, which will support businesses and their supply chains to help them better transition to a low carbon economy. Already, more than 57 projects have been approved for funding, with around 3886 FTE jobs to be created and safeguarded.

The Climate Emergency Skills Action Plan is central to realising our ambition to create a future workforce that can support our transition to a net zero economy. It identifies immediate and long term actions needed to ensure our current and future workforce has the skills to support Scotland’s transition to net zero. The Green Jobs Workforce Academy, established to help workers take a green approach to their career, skills and job search, is accessible to all users, enabling a greater understanding of the relevance of their existing skills and signposting to green job opportunities.

Making the Switch also underlines how important carbon capture and storage will be to future-proofing jobs in the North East and why it is essential for the UK Government to support the Scottish Cluster to progress with urgency.

As set out in our Part II consultation on the New Build Heat Standard (NBHS) ( New build heat standard consultation: part II - Scottish Government - Citizen Space ), the Scottish Government proposes that from 2024, new buildings must use zero direct emissions heating systems of the sort set out at section 2.2.1 of that consultation.

It is our intention for these regulations to be technology-neutral, to ensure developers have flexibility in achieving compliance.

The Scottish Government has previously commissioned research to establish the direct greenhouse gas emissions associated with all readily available low and zero direct emissions heating systems. A copy of this research is available here: Direct greenhouse gas emissions from low and zero carbon heating systems (climatexchange.org.uk)

Our Heat in Buildings Workforce Assessment Project, published in June 2022, provided an analysis of the current scale of the existing workforce in Scotland trained to fit certain zero emission heating systems such as heat pumps. The report highlighted that there are no publicly available statistics regarding the total number of heat pump installers in the UK and Scotland, but estimated that there are around 500 trained heat pump installers currently active in Scotland, based on data from the Microrenewable Certification Scheme. The report highlights that other forms of zero direct emissions heating such as direct electric radiators can be installed by an electrician, without any specialist heating knowledge, and there were an estimated 22,000 electricians operating in Scotland in 2018.

Ultimately, sending employees on training courses to develop new skills is the responsibility of businesses in the supply chain and this will be guided by commercial drivers. However we have sought to support businesses by offering free heat pump training in Scottish colleges through our National Transition Training Fund, with over £470,000 funding to support over 500 college places since 2020. This support combined with our early signal of intent and consultation on the proposed NBHS standard has provided businesses with an opportunity to prepare their workforce for regulation.

There are no specific statutory minimum qualifications required to install zero direct emissions heating systems, however we have worked with industry to define the minimum skillsets and recommended minimum qualifications required to install a full spectrum of zero direct emission heating systems, and have published this as part of an Installer Skill Matrix .

We have worked to integrate this matrix into the certification schemes that underpin quality assurance in any public funded work, and we would encourage the private sector to also use this in any non-public funded works.

To date we have provided £164,700 capital investment in colleges in the North of Scotland for heat pump and thermal insulation training equipment, with further investment in the South of Scotland provided by the Scottish Power Green Economy Fund. According to the Energy Skills Partnership, there are currently 11 colleges in Scotland with capacity to train up to 120 heat pump engineers each month. Three new training facilities will come online later this year, taking capacity to 150 each month. We understand that this provision is capable of meeting existing levels of demand for training in the sector.

We are committed to working with the new build sector to ensure that our investment in skills and training matches the needs of the sector as demand grows in the future.

The Scottish Government is introducing the New Build Heat Standard from 2024 in direct response to the recommendation of the Committee on Climate Change on how to meet the net zero legal obligations legislated for by the Scottish Parliament.

Within the 2019 UK housing: Fit for the future? publication, the Committee on Climate Change recommended that “from 2025 at the latest, no new homes should be connected to the gas grid. They should instead be heated through low carbon sources”. A copy of this report can be found here: UK housing: Fit for the future? - Climate Change Committee (theccc.org.uk)

In a subsequent letter to the UK Government , the CCC recommended that: “The full definition of the Future Homes Standard should be set now and legislated ahead of 2024 to give market certainty. Waiting until 2024 to legislate is likely to drive up compliance costs in the long run, given the history of the cancelled Zero Carbon Homes policy which left many investments stranded and weakened industry confidence. We also urge you to consider bringing forward the 2025 introduction date - we note that Scotland are due to introduce equivalent standards a year earlier.”

We initially announced our intention to regulate new build heating systems in September 2019, five years in advance of the regulations coming into force, and we are actively working with the construction sector to inform the development of these new regulations – including through establishment of an external working group, membership of which includes trade bodies representing Scottish and UK house builders.

That five year prior notification has given the construction sector significant time in which to plan for these new regulations coming into force. It is longer than the three year duration of a building warrant - meaning that no builder could have pre-ordered fossil fuel heating for an active or planned building warrant without being aware of the proposed prohibition on fossil fuel heating systems in new buildings applying from 2024.

The Scottish Government is providing support to encourage investment in renewables in the north east through a number of funds and programmes. These include, but are not limited to:

The £75m Energy Transition Fund is investing in projects that aim to accelerate and support the move to renewable energy, protecting existing jobs and create new jobs in the North East, and across Scotland by opening up opportunities through energy transition and harnessing private sector funding. It is currently in delivery with an intended end date of 2025.

The £125m City Region Deal investment runs until 2026 and includes £90m for the Net Zero Technology Centre. The City Region Deal is delivering a number of projects aimed at utilising the resources of the North East to lead the world on the shift to a net zero future in areas such as:

• offshore renewable (wind) energy generation,
• energy storage,
• electricity interconnection,
• hydrogen production and fuel cell deployment,
• gas and hydrogen distribution, and
• carbon capture, utilisation and storage.

The £500 million Just Transition Fund for North East and Moray will deliver over the next 10 years. The fund opened for applications on 31 May 2022. Bids to the first year’s allocation of £20 million are currently being assessed. The Just Transition Fund complements other Scottish Government commitments to the sector in the North East and was announced in recognition of the particular need to diversify the regional economy away from carbon-intensive industries and to capitalise on the opportunities, including jobs and prosperity, that the transition to net zero will bring.

The draft Hydrogen Action Plan committed £100 million hydrogen funding for 2022-2026 through the Emerging Energy Technologies Fund (EETF). This is a Scotland-wide fund to support Hydrogen, CCUS and the development of negative emissions technologies. In June 2022, we launched the first tranche of the EETF via the £10 million Hydrogen Innovation Scheme. The remaining £90 million hydrogen investment programme is expected to launch in Autumn 2022 and will focus on supporting rapid renewable hydrogen production from Scotland’s abundant renewable energy resources.

Our Emerging Energy Technologies Fund allocates £80m over the next five years to support the development of CCUS and negative-emissions technologies. We have offered this funding to help the Scottish Cluster carbon capture project accelerate its effort to help Scotland’s just transition to net zero.

The Scottish Government is providing support to encourage investment in renewables in the north east through a number of funds and programmes. These include, but are not limited to, the £500 million Just Transition Fund for North East and Moray which opened on 31 May. Bids to the first year’s allocation of £20 million are currently being assessed. The Just Transition Fund complements other Scottish Government commitments to the sector in the North East – such as our £125m City Region Deal investment, including £90m for the Net Zero Technology Centre and the £75m Energy Transition Fund (ETF).The ETF will protect existing jobs and create new jobs in the North East, and across Scotland by opening up opportunities through energy transition and harnessing private sector funding. As an example, our investment of £26.3m in the Energy Transition Zone is helping to unlock a further £64m in private investment for the first phase. The Net Zero Technology Transition Programme delivered by the Net Zero Technology Centre has also leveraged match funding of £17m from industry for phases 1&2 as a direct result of our £17m investment in the programme.

The draft Hydrogen Action Plan committed £100 million hydrogen funding for 2022-2026 through the Emerging Energy Technologies Fund (EETF). This is a Scotland-wide fund to support Hydrogen, CCUS and the development of negative emissions technologies. In June 2022, we launched the first tranche of the EETF via the £10 million Hydrogen Innovation Scheme. The remaining £90 million hydrogen investment programme is expected to launch in Autumn 2022 and will focus on supporting rapid renewable hydrogen production from Scotland’s abundant renewable energy resources.

Scotland’s natural resources, which include strong and consistent wind resource, along with our established expertise in offshore oil and gas, skilled offshore workforce, excellent port structure and strong innovation hub, make Scotland one of the best places in the world to develop offshore wind and reap the supply chain benefits from private sector investment. The recent ScotWind leasing round demonstrates this, by delivering around £700 million in option fee revenues to the public purse, plus the ScotWind projects committed to investment of up to £25 billion across the Scottish supply chain across the 17 Scotwind offshore wind projects as set out in their Supply Chain Development Statements

Scotland’s energy sector is at the forefront of our transformation to becoming a net zero nation. It is a major employer and source of economic output, and our oil and gas infrastructure and highly skilled workforce have long been at the forefront of energy innovation - which is why it is well-placed to embrace the transformation that lies ahead.

We are already investing in the oil and gas sector’s net zero transformation. Our expanded £75 million Energy Transition Fund which is supporting the energy sector to grow and diversify, whilst helping to attract further private investment; and our £500 million Just Transition Fund for the North East and Moray will support the North East and Moray to become one of Scotland’s centres of excellence for the transition to a net zero economy . The opportunities of offshore wind are also considerable. Applicants to the recent ScotWind leasing round were required to submit a Supply Chain Development Statement, outlining the supply chain activity they commit to undertaking within Scotland, the UK and overseas. The full Supply Chain Development Statement Outlooks for all successful applicants were published by Crown Estate Scotland in April 2022, and the initial projections show an average spend of £1.5bn in Scotland across each of the 17 ScotWind projects. This week Crown Estate Scotland’s ScotWind clearing process offered seabed agreements to a further three projects off the east coast of Shetland bringing the total number of ScotWind projects to 20 totaling 27.8GW.

Our £75 million Energy Transition Fund is focused on acceleration the energy sector’s transition to net zero-emissions whilst helping to attract further private investment, £26 million of which has been allocated to develop the Energy Transition Zone (ETZ) in Aberdeen. ETZ is expected to directly support 2,500 green jobs by 2030, alongside a further 10,000 transition-related jobs. Our £500 million Just Transition Fund - which we have called on the UK Government multiple times to match - will also support the north east and Moray become one of Scotland's centres of excellence for the transition to a net economy, with our investment supporting transformation across the region.

We are committed to supporting Scotland’s just transition to net zero by 2045, a target that was agreed by parliament. It is vital that, as we transition our society and economy towards a low-carbon future, no individual, community or region is left behind.

We are also clear that oil and gas are part of our energy mix right now - and will continue to be so during the transition. With the North Sea continuing to play an important role now and in Scotland’s future. However the way to accelerate the transition to net zero - which is not just for environmental imperatives but to increase energy security and reduce energy costs - is to that we must end our dependence on oil and gas. We need to move away from fossil fuels to renewable sources of energy. This has been recognised by oil and gas companies who are now investing in renewable energy.

We are already investing in the oil and gas sector’s transformation. In addition to our expanded, £75 million Energy Transition Fund and £100 million Green Jobs Fund, our £500 million Just Transition Fund for the North East and Moray – which we have called on the UK Government multiple times to match - will support the North East and Moray become one of Scotland’s centres of excellence for the transition to a net zero economy, with our investment supporting transformation across the region.

We are meanwhile undertaking in-depth analysis work to better understand Scotland’s energy requirements as we transition to net zero, ensuring an approach that supports and protects our energy security and our highly skilled workforce whilst meeting our climate obligations. The Programme of Work's evidence base and some of its initial outputs will feature in the Scottish Government's draft Energy Strategy and Just Transition Plan (ESJTP) which will be published in Autumn 2022. The ESJTP will consider the whole energy system as part of the strategy and indicate the change required in electricity generation, heat, transport and all energy demand across Scotland.

In recognition of the particular challenges the North East has faced as result of the Covid-19 pandemic and the downturn in oil and gas, we have allocated £14.3m to the North East Economic Recovery and Skills Fund, which offers over 3,000 training opportunities in addition to supporting hundreds of local businesses at a critical time for the local economy. We have worked closely with local partners to develop proposals aligned to the City Region economic priorities of diversification and net zero transition, including local authorities, Skills Development Scotland, Opportunity North East, Scottish Enterprise, the Scottish Funding Council and local universities.

This programme aligns with existing nationwide upskilling and reskilling programmes of support for colleges and universities as we work towards a just transition, including the Young Person’s Guarantee, the National Transition Training Fund, the Flexible Workforce Development Fund and the Green Jobs Workforce Academy.

In 2022-23, we are also progressing key actions from the Climate Emergency Skills Action Plan (CESAP) focused on inspiring and empowering young people; supporting upskilling to meet emerging green jobs requirements; aligning work-based learning, Further and Higher Education provision to meet the needs of the net zero transition; facilitating behaviour change and helping employers capitalise on opportunities, and driving change in the skills system. The CESAP is being driven forward by an Implementation Steering Group comprised of central and local government and its agencies, education and skills providers, industry and independent experts.

The Scottish Government welcomed the findings in the Review which was funded through our £14.3m North East Economic Recovery and Skills Fund (NEERSF). The Review clearly demonstrates that, with the right investment, the North East of Scotland could support 9,000 more offshore energy jobs by 2030 than it currently does.

The just transition to a net zero economy is one of our greatest economic opportunities. Scotland has the potential to be a net zero global energy hub, that leaves no one behind by supporting existing oil & gas roles into the renewables and low carbon roles of the future.

The Scottish Government supports the principles underpinning the green taxonomy, especially the need to establish criteria for sustainable economic activity, to give investors certainty on the sustainability of projects, and to combat greenwashing, and we look forward to continuing to work internationally with our partners in the European Union and its Member States to combat climate change.

The Scottish Government position on nuclear power is clear – we do not support the building of new nuclear power stations in Scotland under current technologies. Given that new nuclear power will take years, if not decades, to become operational and will be expensive, we do not believe classifying nuclear as sustainable or transitional should be our focus.

The best pathway to net zero is through increased investment in renewables, storage, hydrogen and carbon capture. Concentrating growth in these technologies is better for both energy security and the climate. As the UK taxonomy is a reserved matter, we are working with UK government to ensure the forthcoming UK taxonomy reflects the level of climate ambition the Scottish Government has set. We will be publishing our Energy Strategy and Just Transition Plan later this year, including energy scenarios that will set out how Scotland can achieve our climate targets and meets our energy needs in a sustainable manner by 2050, and will provide a long term basis for investment in energy generation in Scotland.