Can green energy really revolutionise the Scottish economy?

The same applies to wind turbines when the wind is blowing hard but homes and factories aren’t hungry for power, at night for example. It’s why electricity consumers have to fund “constraint payments” to compensate generators forced to turn off turbines to avoid overloading the national grid.

What the Mull and Iona Community Trust are trying to do is to develop a much smarter local grid that will enable electricity to be stored rather than wasted. It’s called the ACCESS project - Assisting Communities to Connect to Electric Sustainable Sources.

It means that electric storage heaters in homes can be automatically switched on and off in order to match the amount of power being generated by the hydro plant. This may not sound like the kind of sophisticated system that is key to the future, but experts insist that it is.

It is decentralised, locally owned and community-scale schemes for using renewable energy that have the real potential to revolutionise Scotland’s economy, they say. In this way, island communities are showing the way.

There are similar initiatives under way on the Orkney islands, where excess electricity from wind turbines can be used to charge community electric vehicles. These are the kind of ideas that, if they are shown to work, could be followed up across the country.

One of Scotland’s leading thinkers on green energy futures is Andy Kerr, director of the Edinburgh Centre for Carbon Innovation. He argues that the old, inflexible and top-heavy electricity distribution system is going to disintegrate.

“We are seeing a period of extraordinary disruption in energy systems in Scotland and elsewhere around the world,” he says. Last century’s electricity grids assumed that power stations had to be near coal mines or ports and that wires would be strung around the country to pump electricity to “dumb consumers”.

Enough power stations were built to ensure that there was more than enough capacity for the 30-minute peak power demand on the coldest day of winter. “But we are now entering an era of localised and personalised energy services,” Kerr says.

This is because it is becoming as cheap to install a local solar panel or wind farm as it is to buy power from far away power stations. With the introduction of smart, Garmony-style schemes matching local supply and demand, with heating controlled by mobile phones and with more electric vehicles, people are finding news ways of meeting their energy needs.

“These changes fundamentally re-shape energy systems – but also economies – since the economic model of the big energy companies is redundant,” argues Kerr. “If I can create and automatically trade energy with my neighbours, why would I buy from a big company elsewhere?”

He adds: “Scotland has tested various local energy system models and is at the leading edge of know-how that can support export potential. Low carbon companies have been shown to export more than regular Scottish businesses.”

In the future, Kerr predicts that Scotland will be exporting its energy expertise, as well as its electricity. “The global market for low carbon products and services is worth $1 trillion or more,” he says.

“The focus in Scotland has been on its wind or wave resources - too often, we are forgetting about its people resource. It is the presence of skilled people in Scotland that have helped deliver the green energy targets.”

Ragne Low, who manages Scotland’s centre of expertise on climate change, ClimateXChange, points out that Scotland needed to develop and retain its energy skills. This could be made much more difficult by a “hard Brexit” deal, she warns.

“A further significant opportunity for economic growth is the development of city- and local-scale energy systems,” she says. “There is a growing number of innovative projects across Scotland that show how this can be done.”

Such projects were developing new business models that could be scaled up on a commercial basis across Scotland, she argues. The shift to more distributed energy would change Scotland’s economy by reducing fuel bills, she says.

Andy Kerr thinks that green energy is bringing major economic changes. “It is a key pillar of our current energy system and our current political thinking, but in future will become a key pillar in our Scottish economy,” he says.

“But we need to get away from thinking of green energy just as a bunch of subsidised windmills or wave or tidal turbines, or thinking only about electricity. Green energy in its widest sense includes energy generation technologies, but also heat pumps, energy efficiency, low emission vehicles and smart meters.”

These are the things that will come to characterise the green energy economy in Scotland, he argues. Low carbon industries were already worth £10.7 billion to the Scottish economy in 2014, and supported 43,500 jobs.

The wider UK market for green technologies is worth up to £122 billion. This is the same size as the UK food and drink industry, twice the size of the chemicals sector and five times the size of the aerospace sector.

The environmental group, WWF Scotland, has set out what it thinks the energy future could look like in 2030. Mostly because of major improvements in insulating buildings, total energy demand will be a fifth lower than today, it says.

Renewable energy will be providing 40 per cent of Scotland’s heat, ten times more than today. Heat pumps will be routinely installed in offices and homes, and district heat networks have expanded in cities.

According to WWF, Scotland will be generating at least 40 per cent more renewable electricity than it consumes, and selling the excess to England. An additional seven or eight gigawatts of wind, solar, hydro and tidal power will be created, with the sector adding up to 14,000 new jobs.

On the roads, low pollution vehicles will be mainstream, says WWF. Half of all buses and one in three cars will be electric, and a 40 per cent drop in the use of petrol and diesel will greatly improve air quality in cities.

Head of policy at WWF Scotland, Dr Sam Gardner, suggests that Scotland is experiencing a green energy revolution. “By 2020, it is estimated that our continued shift to a zero-carbon economy could create over 60,000 jobs spread across our major cities and rural communities, providing a catalyst for economic renewal across Scotland,” he says.

There were significant opportunities to improve heating and transport, which make up half of energy demand. “Tackling these could secure massive economic, social and environmental benefits across the country,” Gardner argues.

“The global energy transition is happening, and Scotland is blessed with an abundance of renewable resource. By harnessing this we can create green jobs, improve our transport system, cut fuel poverty and improve public health.”

The Scottish renewables industry already employs 21,000 people and is the country’s biggest source of power. Scottish green energy businesses are working in more than 40 countries around the world.

“The opportunity for economic growth from this industry is huge,” says Jenny Hogan, director of policy at the industry body Scottish Renewables. She puts the value of the global renewables market at £379 billion, which could grow to £620 billion over the next two years.

“But to capture any of this prize here in Scotland, the industry needs a viable route to a viable market - something currently lacking for many technologies,” she argues.

“It also means investing seriously in innovation to bring technologies like energy storage, renewable heat, wave and tidal power to full commercialisation, and in low-carbon infrastructure like district heating and electric vehicle charging points.”

In its draft energy strategy, currently out for consultation, the Scottish Government is proposing a target to supply half of all Scotland’s energy use – including heat, power and transport - from renewable sources in 2030.

Since 2006 onshore wind generating capacity has increased six fold. Renewable electricity supplied the equivalent of 53.8 per cent of Scotland’s power consumption in 2016.

“In recent years we have developed a growing international reputation as a knowledge hub for modern, renewable energy technologies, particularly in areas such as tidal, wave and offshore wind,” says a Scottish Government spokeswoman.

“This places us at the forefront of the global challenge to reduce the carbon footprint of our energy needs, which is at the very heart of meeting our domestic and international climate change obligations.”

The Scottish Government is aiming to foster a strong, low carbon economy that will deliver opportunities for both suppliers and consumers of energy, she explains. “This will help to reduce the damaging impacts of fuel poverty in Scotland, and creating a vibrant climate for innovation, investment and jobs.”

It all sounds like good news, and it probably is. But there are still barriers to be overcome, whether they’re erected in Edinburgh, London or Brussels – and major change rarely comes without pain.