Argyll really is on the move to where it needs to be – noticed, respected and consulted.

The advance to recognition in Europe

George Harper, Argyll and Bute Council’s Director of Development Services has just made a visit to Brussels during which he promoted Argyll’s potential – and Kintyre’s in particular – as a Renewable Energy Hub.

The interest in his presentations was so pronounced that he has now been invited to address the European Maritime Day Stakeholder Conference in Rome next week.

This conference is bringing together some of Europe’s biggest players in terms of all aspects of maritime affairs, including marine energy generation.

Mr Harper has been asked to use Argyll and Bute as a case study: ‘Energy from the Ocean – Emerging Technologies’. He says: ‘To be invited to speak at such a high profile event is an indication of the stature we are now beginning to have in this field.

‘This is a very exciting time for the area in terms of renewables, and in particular for the Kintyre peninsula which is rapidly becoming Scotland’s powerhouse in terms of investment in this sector. There is a great deal of interest – not just in Scotland and the UK but also in Europe – regarding our integrated and holistic approach to developing the area as a renewable energy hub’.

The focus of Mr Harper’s address to the European Conference

In his address to the conference, Mr Harper will highlight the anticipated effect of the renewables boom on the area’s overall economy and employment statistics. He will also point out that, if development is strategically managed, Argyll and Bute’s resources in this field could transform the fortunes of some of the areas more peripheral communities.

Campbeltown and its surrounding area has been identified as an area of employment deficit. It continues to suffer from the out-migration of its economically active and skilled population and from the associated negative effects of this on the economy and on community life.

To help redress these problems, Argyll and Bute Council and Highlands and Islands Enterprise had developed the Kintyre Action Plan, including a range of regeneration activities. This has since been extended to create a key focus on the opportunities offered by the growing renewables sector – and in particular marine renewables.

The absolute necessity for the interconnector

However, it is important to remember that all of this potential for Kintyre – and for Islay – can only be realised by investment in the interconnector, the sub-sea cable from Hunterston to connect energy generated in Kintyre and Islay to the National Grid.

Developments already in train

Several major developments in Kintyre and Islay have already taken place:

• the takeover by Skycon of the former Vestas wind turbine manufacturing plant at Machrihanish – now called Welcon Towers. This represents a £45million+ investment. It will create or safeguard 300 jobs over three years and it was brought about by skillful negotiation by Enterprise and Energy Minister, Jim Mather, Argyll’s MSP.
• serious investment by Argyll & Bute Council in infrastructure at Campbeltown harbour. This will enable the harbour to serve large marine developments not just along the Scottish coast but on the coasts of Ireland and north west England too.
• the development of a location in the Sound of Islay by Scottish Power Renewables for a tidal energy generation project. The aim is that this should be running by 2011.

We assume that, in his conference session, Mr Harper will also be focusing on the strong potential for marine renewable energy beyond Kintyre. Islay and Tiree are two such cases, each also with a need for development in the local economy, in employment opportunities, population growth and community support.

Future Scotland-wide concerns – loss of independent control of energy

The worry here is a loss of national control over energy as a result of the increasing globalisation of businesses. The independent charitable organisation, the Renewable Energy Foundation has recently cited the example of Denmark which has found control of its wind-generated energy market shared with Germany and now – unintentionally – finds itself in partial economic integration with Germany. The two are said now to ‘operate like one electricity market and to balance their grid as a single entity’.

The Foundation warns that Scotland runs similar risks. The tightrope that has to be walked here steers a course between two less than compatible imperatives.

• Economic development and stable energy provision sees the future in developed European energy networks – as do, naturally, the business interests involved. There is no doubt that the significant costs of technological development in new energies are heavy for single countries. What is known as ‘the liberalisation of the market’, with multi-national corporations owning key utilities in several countries can be destabilising. Such corporations have no loyalty to any nation, only to profit. Essentially they belong on the new, invisible but powerful Planet Business. The social and poltical impact of this development has yet to be reckoned.
• Security of supply in control over core national resources such as water and power cannot be ignored. Security of supply can be threatened where political disputes and differing national priorities arise in a situation where control resides extra-nationally. The UK has already seen this is an earlier threat from Russia’s giant GazProm. Planet Business is the other threat here, with commercial strategies taking precedence over the needs of any nation. Commercial interests tend to attempt to sideline concerns over national control of key utilities by branding such concerns ‘isolationist’.

The problem with this tightrope for Scotland is as much political as economic. A nationalist agenda exchanging a historical, if exploitive, relationship with Westminster for an inevitable drift into control and economic domination by other less familiar national and global business interests looks indiscriminate. A federal UK would of course, remove the inconsistency of this position.

Future Scotland-wide concerns – higher, fluctuating and discriminatory grid charges

This is a complex and very serious situation, threatening Scotland’s ability to connect the energy generated from new renewable technologies to the National Grid without financial penalties. These are estimated to amount to £100 million per annum on the costs to the power generating companies.

The problem arises with lack of investment by the UK Government over the years in keeping up to speed the electricity  grid connection – the pinch-point (or bottle neck) – between England and Scotland.

The picture now closing in is one where Scotland’s generation of serious volumes of energy from renewable sources and their addition to the grid will create power log jams at the pinch-point. This could cause faults in the grid.

Another piece of the picture is the grid development necessary at geographically remote points of key renewable energy potential. In places like this, the grid will need to be capable of receiving these new  power volumes. Islay and Caithness are two such places – with the energy potential of the Sound of Islay and the powerful Pentland Firth respectively washing their doorsteps. (A curiosity here is the inability of the grid in Caithness to cope, given that this region has hosted the nuclear power plant at Doonreay – now in lengthy decommissioning after an inglorious career.)

Until now, the cost of developing the grid has been spread equally across the regions. Now though, the National Grid, instructed by Ofgem, is proposing a new charging regime which would require grid development costs to be born by the region in which such developments are sited, regardless of the positive contribution to the UK of the additional power.

Unless this can be prevented, it will see the development of renewable energy in Scotland disabled seriously, possibly terminally, by uncompetitive costs. Power producers in England will have the advantage of lower production costs.Their peers in Scotland would face a desperately uneven playing field on which they could not hope to compete successfully. Companies and investors are unlikely to contribute to development in Scotland with this level of financial penalty. What would be the business case?

Conclusions

So we have Argyll, looking rightly to a brighter future with economic, employment and population growth, all on the horizon, born from our depth of renewable energy resources – and now contemplating these crippled at the outset by an externally imposed and discrimatory charging regime.

It would be naive not to consider the possibility of a political motive here as a tactic in stalling the independence agenda in Scotland. No depths are unplumbed for political advantage these days. The ghost of Damian McBride will take some time to lay.

The photograph above – of the Pelamis wave energy generator under test at Scotland’s European Marine Energy Centre in Orkey – is by copyright holder, S Portland and is in the public domain.

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