Cambo: What the battle over a new oilfield tells us about Scotland's energy plans

The battle over Cambo is rapidly becoming a test of the UK government’s commitment to tackling climate change. Simultaneously planning to allow the extraction of 170 million barrels of oil from the North Sea while also hosting the biggest climate conference in the world in November is, if nothing else, sending mixed signals.

For climate activists, not granting permission to expand into the oil field off the west coast of Shetland is a no-brainer. An open letter to the Prime Minister warns the consequences would be “devastating”. UN chief António Guterres said a recent damning report from the Intergovernmental Panel on Climate Change “must sound a death knell” for fossil fuels. Even First Minister Nicola Sturgeon, leader of the party of ‘It’s Scotland’s Oil’, has called for exploration licences to be “reassessed in light of the severity of the climate emergency”.

The UK government, though, is not yet ready to signal an end to fossil fuel production in the UK. Prime Minister Boris Johnson has said contracts with developers should not be “ripped up”. And, following a recent visit to Aberdeen, Scotland minister David Duguid added: “Whilst our reliance and demand for fossil fuels continues to fall, we cannot have a cliff-edge where oil and gas are abandoned overnight as they have a role to play in our electricity supply, in providing local jobs, and in supporting the production of everyday essentials like medicines.”

Duguid is not wrong about being unable to end reliance immediately. But Professor Keith Bell, a chartered engineer and all-round energy expert, says it is important to start thinking about winding down the sector. He tells Holyrood: “The demand for fossil fuels is not going to disappear overnight, we have to be honest about that. But we do have to consider very carefully how that demand changes and how reducing that demand is going to be met.”

Heat and transport remain the biggest barriers. While Scotland has done well decarbonising electricity, only narrowly missing its 2020 target to generate 100 per cent of it from renewables, there has been little movement on gas heating and combustion engines. It makes the 2030 target of having 50 per cent of energy for electricity, heat and transport coming from renewables daunting.

Bell, who also happens to be Scotland’s representative on the Climate Change Committee, explains: “We’ve done well in reducing the emissions intensity of electricity production. It’s been a great success story. I think we really should celebrate it. Support for renewables has been a big part in reducing the cost of production of electricity from renewables and that’s going to be really valuable in the future, because it means we can have some confidence about a big part of the cost of energy by the time we electrify lots of our energy use. [...] The challenge now, though, is we need to pay much more attention to the demand side than the production side and that means that energy users need to be engaged and need to embrace the change that we’re making. That of course raises the question about your heat and transport.”

The Scottish Government was aiming for 11 per cent of heat demand to be met by renewables by 2020. In 2019, that figure was just 6.5 per cent. Meanwhile transport remains the biggest emitting sector, according to the latest government figures. It will need to reduce emissions by 75 per cent of 1990 levels in the next nine years.

Claire Mack, chief executive of Scottish Renewables, believes public buy-in is an important next step. This means making it as easy and as inexpensive as possible for consumers to make changes. She says: “The incredible achievements we have made in the decarbonisation of electricity came about, in large part, without input from most members of the public. As we move onto the next stage of our decarbonisation journey, that will change.

“Homeowners will need to think about how they keep warm. When gas boilers come to the end of their lives, they will be replaced with low-carbon alternatives like heat pumps and solar thermal panels.

“We’ll also need to make decisions about how we move ourselves around. [...] To do all this, industry and government will need the support of the public. COP provides us with a way to kickstart these crucial conversations.”

But even after consumers have been convinced to make these changes, there remains the matter of network capacity. Mack adds: “As we move away from burning the fossil fuels which are causing climate change, we will lean on clean electricity more and more, for electric vehicles and for electric heating.

“That clean power has to come from renewables like wind power and large-scale solar, which are the cheapest form of any new energy generation. Building that renewable generation capacity will mean streamlining the processes which make development happen: the planning system, both on and offshore, as well as the way in which the electricity network is managed, regulated and paid for.

“If industry, regulators and governments can work together to do that, then the 2030 target remains an ambitious but achievable stepping stone on the way to Scotland’s 2045 net-zero target.”

The new ScotWind development is promising in this regard. The first round of offshore wind leasing in Scotland for decades, it is expected to be able to generate as much as 10GW of electricity – enough to power every home in Scotland alone. Crown Estate Scotland, which owns the seabed around the country, has received over 70 bids from developers seeking to benefit from the boon in offshore wind.

Bell said: “There’s a lot of interest, which is fantastic, so it gives us a lot of hope. [But] how is that interest going to translate into projects that are actually developed? And what will the cost be of those projects?

“There are some mixed signs, I think, from the Crown Estate auction for development rights. Mixed signs, in that it’s positive that there’s a lot of interest. But slightly worrying about what the costs of those rights are and how those costs might then flow through into the cost of the energy that is finally produced. [...] It’s a moving space and something to be watched with interest.”

There is also a concern that the huge success of offshore wind – in part because the technology is much further advanced than other types of renewables – may actually limit the scope for generating power by other means. While the 2045 target will not be met without offshore wind, that technology alone will not get us there.

Mack said: “Offshore, we’re now able to build wind farms to supply power below the wholesale electricity price, which is an incredible achievement. Tidal technology, however, desperately needs a way to scale up and bring costs down in the same way. For that it relies upon government support, which at a UK level is currently lacking. Wave energy has enormous potential but is at an early stage of development, and funding from the Scottish government through Wave Energy Scotland is welcome here.

“Other generation technologies, as well as new methods of managing the way in which power is transmitted and used, will make a huge difference to our chances of meeting net-zero. In the main, they also rely on regulators and government to provide them not with financial support, but with ways to sell their services in the energy market.”

The good news is that there is consensus, among both politicians and the public, about the need to switch to renewables. The challenge is for policymakers to turn that into action and ensure people, who will be asked to do more in the coming years, continue to support these efforts.

Bell said: “The Scottish targets are pretty stretching, actually, challenging, especially for 2030. It’s going to be difficult to achieve, but you know, let’s look to the positive and say it’s good that there is pretty much a political consensus towards the need for action.

“What we need to see now is much more development in terms of tangible policies being developed and adopted. And then also, that we see the kinds of outcomes from policies that we need. [...] It’s good that, when we do surveys, there is strong public support for action on climate change. That support is going to be tested when we come to those demand-side actions I was talking about earlier, so it falls to all of us to help retain that public support and to make sure that the transition is as easy as possible and as fair as possible. There are costs that are going to need to be met in the short to medium term. There will be longer-term savings on the cost of the energy, but the capital cost, it’s got to be faced up to in the shorter term. An open and honest political debate about how to fairly share the costs and the benefits of the energy transition has to be undertaken.”