S4M-04082 Electricity Market Reform

The Presiding Officer (Tricia Marwick): The next item of business is a debate on motion S4M-04082, in the name of Fergus Ewing, on electricity market reform.

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Stewart Stevenson (Banffshire and Buchan Coast) (SNP):
Unlike Charles Hendry, I am definitely not a retreatee. I very much welcome the opportunity to engage in a wider range of subjects.

Electricity market reform is both necessary and urgent. For Scotland, a reformed market in these islands and across Europe must create the conditions for the creation of a physical and economic infrastructure that allows the export of a key product from our fastest growing 21st century industry: renewable energy.

History tells us that economic development is driven by access to energy. The most important factor for us over the past few hundred years has been access to coal and oil—and, of course, an education system that gave us the engineers to drive new industries based on access to energy. Some of this ain’t new. The first wind turbines were in operation in 200 BC and the first wind turbine in the world to generate electricity was installed in Marykirk 135 years ago, in July 1887, by the Scottish academic James Blyth.

Unlike the previous source of energy on which we relied, modern renewable energy is kind to the environment. We now have power generation in which the environmental costs are exceeded by the benefits, that does not result in workers and residents inhaling particulates pollution and that does not create the oxides of sulphur and nitrogen that damage lungs and plants or the CO2 that warms the planet. However, because investment in power generation is investment for the long term, investors need long-term confidence about the fiscal environment within which they will operate. After all, they cannot easily transfer generating equipment to another part of the world if the Government changes the rules. In that respect, power generation is quite different from other manufacturing industries. Manufacturing power is locked to local sites and gives us long-term economic benefit if we provide long-term certainty.

The Climate Change (Scotland) Act 2009, which was unanimously passed by Parliament, is one of the underpinnings that has given the renewables industry the confidence to invest. Whatever the political vicissitudes that might affect any party in a democracy, or whatever the nature of future Governments in Scotland, we made a shared commitment that others now rely on and from which our economy gains.

We can already see the effect of reneging on deals. The Kyoto protocol represented an international agreement to create what was essentially a carbon market and ensure that the environmental cost of human activity carried an associated economic cost. When the United States resiled from its international obligations under Kyoto, the international carbon market all but collapsed. The European emissions trading scheme has taken up some of the slack but for a number of European countries, notably Poland, the loss of Kyoto revenue not unreasonably makes it difficult to strengthen targets in Europe while others turn their back on duty.

Indeed, I was leading the UK delegation in Durban for the 17th Conference of the Parties meeting of the United Nations Framework Convention on Climate Change when the United States spoke to plenary. Such was the hostility to the US delegate that he had to shorten his speech and leave the podium much earlier than anticipated. When we sacrifice long-term necessities by trimming to short-term needs, we sacrifice trust; trust that it can take a lifetime to build can be sacrificed in a second.

I welcome the positive collaboration on this agenda between the Scottish Government and the Westminster Government and, indeed, the international engagement that our ministers are having with countries across Europe.

What are my personal tests to measure success in EMR? First, consensus across jurisdictions and political parties—long-term stability. Secondly, equal access to networks, which was usefully highlighted by the Labour amendment today—supporting community and industrial-scale generation. Thirdly, progressing the carbon reduction agenda and supporting the climate change acts in Scotland and Westminster—saving the planet. Fourthly, delivering affordable energy—tackling fuel poverty, as John Wilson and Rhoda Grant mentioned. Fifthly, building our economy—gaining reward for effort.

However, there are signs of difficulty. Westminster has an unhealthy focus on gas. Yes, the CO2 from gas generation is much less than that from coal, but without carbon capture and storage the emissions remain too high. John Selwyn Gummer, now Lord Deben, chairs the UK Committee on Climate Change. His committee has just written to the Westminster Government to make clear that a focus on gas is a focus on climate failure. Let us hope that he maintains close relations with his political colleagues and gets that message across.

Carbon capture and storage is not the long-term answer; we shall have to do more. However, it can deliver substantial intermediate-term benefits. China is not normally regarded as a climate champion, but it is building better wind turbines by using its access to rare earths to cast better magnets. In my constituency, we are ready to follow its lead. It has seven carbon capture plants that are already operational.

Martina Navratilova once said:

“It’s not how I play when I’m at my best that means I win; it’s how I play when I’m at my worst that makes me a champion.”

Similarly, on the climate agenda, it is how we respond when the economic, social and environmental challenge is at its greatest that will determine our success or failure in combating global warming.

I am delighted to support the Government’s motion and the Labour Party’s amendment.

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