 Good morning, everyone. Welcome to the fifth meeting of the Economy, Jobs and Fair Work Committee. The first thing that I would say is that I would ask everyone to turn off any electrical devices that might interfere with the work of the committee or turn them to silent. The first item is a decision by the committee to take item 3 in private or we all agreed to do that. Thank you. This morning, we have a number of guests with us from the energy sector. We are doing this this morning in the form of a round table format, so to speak. We are interested to hear as much as possible, as committee members, from the witnesses who are present today. I would simply ask if anyone wants to come in to speak, if they simply raise their hand so that I can see that you want to come in to speak, and I will come to you as soon as we can. There is no need to switch on microphones. That is being dealt with by the sound broadcasting, rather than sound desk, is what they are called. What I would do to start off is I would invite all of our guests who are here to simply introduce themselves, tell us their name and the organisation very briefly, and I will start first of all with Kirsty to my right. I am Kirsty Burg. I work for Offgem, the UK energy regulator for the gas and electricity industry. I have two roles at Offgem. I am head of our office in Scotland and I am also the partner for the regulated networks. I am the director of communications at Scottish Renewables. Scottish Renewables is a trade association representing renewable energy companies in Scotland. Malcolm K, senior research fellow at the Oxford Institute for Energy Studies, which, as Elaine suggests, looks at energy issues. My concerns are the interaction between energy and climate change policy. I am Elizabeth Layton. I am representing the existing Homes Alliance. I am the policy adviser. It is a coalition of housing, environmental and poverty groups. I am arguing for greater investment in our housing stock to address fuel poverty and climate change challenges. I also wear another hat where I am giving policy advice to the fuel poverty strategic working group, which will be making recommendations on a new fuel poverty strategy in the next few months. I am Elizabeth Gore. I am deputy director at Energy Action Scotland, which is the national fuel poverty charity. Our focus is on people who cannot afford to heat their homes. I am Mark Winskell. I am researcher at the University of Edinburgh. I also work for the UK Energy Research Centre and for Climate Exchange, which is the Scottish Government-funded national centre for expertise on climate change. Good morning, Mike Tolan. I am the head of upstream policy on gas UK, the trade association that represents the interests of the oil industry and the gas industry here in Scotland, both in the supply chain and the producer community. Hi, I am Stuart Noble, head of markets in Scotland policy for Scottish Power. We are working on the opportunity to be part of the committee's proceedings today. I am working with them over the next five years. We have an interest across the energy chain in networks, generation and retail. As part of the bedrola, we are one of the world leaders in renewable energy. Thank you. Immediately to my left, we have the official reporters and also a representative of Spice and two of the parliamentary clerks. Perhaps I could start with a question and I will simply put this out and ask which of our guests would like to respond to it. I think that in a previous session I directed a question to someone who said that someone else would be better placed to answer it, which was a fair response. In this case, I will simply put that back to our guests and see who would like to come in and comment on it. If we are talking about decarbonisation, a huge amount of our difficulty in Scotland is with carbon emissions and old cities like Edinburgh with bottleneck roads, such as St John's Road and Crestorfen, or other routes into the city through Bellerno and Currie and so forth. We have huge problems with carbon emissions from transport. How do our guests feel that this can be addressed? One issue in particular that comes to my mind is the lack of integrated ticketing for public transport systems that would be taken as a given in many European countries. Is there a way in which in Scotland we can start to address these issues and organise ourselves better? Who would like to come in on that? No one. Right, thank you. We do have a taker. Malcolm Cate. Can I start if no one else wants to start? I think that certainly in the short run doing things about public transport and issues like integrated ticketing is going to be very important, but it's also going to be absolutely vital to think about the longer run and what sort of vehicle fleet you've got and what role electric vehicles will play. I think a lot of experience in transport studies worldwide suggests that you have to do an awful lot of this through regulation. You have to regulate what sort of vehicles can access city centres. The congestion charge is one example of that, and congestion charges with special exemptions for electric vehicles, say, but you may have to increase the nature of the regulation so there's only certain sorts of vehicles that can access the centre. I think that this is one area where pure reliance on market forces probably doesn't work and where you have to have a fairly coherent long-term regulatory strategy. There is a limit to what you can do with the actual geography of existing cities, and in a city like Edinburgh there's a limit to what you want to do. You don't want to start knocking down lots of Edinburgh, so you have to live with that. Therefore, I think that you have to go for an approach that has a longer term low-carbon transport system in mind and, to a large extent, regulates its way there. You mean with regard to both public and private transport? Yes. It means developing the public transport in an integrated fashion, so that there are alternatives. To a fair extent, limiting the extent to which private road vehicle transport can have access to times in particular and to certain areas of times. Meanwhile, at a Scottish level and at a UK level, encouraging the development of low-carbon vehicles, probably electric vehicles and the sorts of infrastructure that is needed to support them, the nature of road transport is it's very much chicken and egg. You have a certain sort of car because you know there will be a filling station a certain way down the road. For an entirely new sort of vehicle, powering to come into the system does, as I say, require regulation. If you look at examples like Brazil and South Africa, which were actually quite effective in introducing alcohol vehicles to the extent that now in Brazil it's more or less self-sustaining, the first steps in this have to be taken by very strong government action because people are tied into a system at the moment and moving them off that is quite difficult. Is it economically feasible to approach these things in the way you suggest? Provider use is a combination of measures including public transport. The question is rather whether it's politically feasible. If you start regulating and telling people that they can't drive into towns or park in towns in certain situations, which has much the same effect, it is politically difficult. The problem is a political one as much as an economic one. Gillian Martin. I'm going to go off topic. It's not off the back of it. It's more to do with the issues around the choice for consumers and in particular in rural areas. There are issues around people being disadvantaged because they often only have one option when it comes to heating their homes. I'm Aberdeensia East and a lot of people that's oil fired central heating because there's no infrastructure in terms of being accessed to gas. Off the back of that as well, we're talking about renewable energies and pricing people's lower incomes by pricing them out of having the advantages of having solar energy panels put in their homes because the outlay is too high. I'm wondering what the panel might think about those two issues. Elizabeth Gore. The issue of everybody across the country having equal access to a choice of fuels and how to heat their homes and indeed the ability at all to heat their homes to an adequate level is quite a big issue that is being discussed in both poverty fields and energy efficiency fields in general. Quite a lot of the focus in terms of looking at energy efficiency programmes just now is how to make the programmes and the measures that are delivered as part of those programmes to improve people's homes. That can be more fairly distributed across the country, particularly in rural areas, particularly in rural remote areas. Being off the gas network at the moment is a disadvantage in terms of being able to heat your home. Access to renewables tends to be for most people through Government grants, but they tend to be for people who can probably afford it to set an extent themselves. I think that full poverty programmes such as the current area-based scheme, which is run through local authorities, is one way where perhaps more people can be opened up to the possibilities of a range of technologies where that can be funded through Government, but it is open to people who are in a particular area where they need to help the most. That way, through social housing providers, perhaps in the technologies, wider use can come down in price as well. There is a range of mechanisms that need to be put into place but sustained. It is quite an expensive way to improve houses, but the improvements that they provide make it worthwhile. I think that Elizabeth Leighton would like to come in and then Rachel Money. I will build on what Elizabeth has been saying. Coming at this from an infrastructure entry point is a very good one because we know that the Government and indeed there is cross-party support for the commitment to make energy efficiency of all buildings in Scotland in the national infrastructure priority, which in our view should mean a real step change in ambition of this vision that we see in terms of our buildings being low-carbon and also a step change in investment. I think from our point of view, for addressing the concerns of the fuel poor and access to some of these technologies, that those who are not able to pay shouldn't have to pay, they shouldn't have to go into debt to live a low-carbon and affordable to heat lifestyle. There should be grants made available to those people and no longer should the energy performance of your property be a reason to be in fuel poverty. There is no reason we have the technology, we have the ability to raise the standards of our homes to a much higher level. We have produced a briefing that I believe many of you have seen, but with a sign-up of some 50 organisations that have agreed with us that nobody in Scotland should be living in a hard-to-heat drafty home by 2025. We have said that that should be a sea rating on the EPC band, if not higher. That would virtually eliminate energy efficiency, energy performance of your property as a reason to be in fuel poverty, and that is really important. On solar, there are many examples of how housing associations to meet the regulatory standard have used solar panels as a means to raise the standard of the homes, to get people on cheaper energy tariffs or using energy at different times when it's cheaper. I know when Stirling Council will expect to get all their properties up to a B rating, which is fantastic. So none of this, we can't do it, it can be done. There's a link to transport, of course, because if we're looking at this future energy system, where we're tying up all our energy uses and we can fix that problem of energy storage, you're looking at plugging in your electric vehicle using that energy that you're not using during the day and charging up your car so that you can use that later on, but an integrated system is the future. That brings in accessibility, again, for rural areas. Rachael Llywydd, you want to come in, and perhaps Gillian will want to come back on that. I think that there's definitely quite a clear point made about renewable heat. At the moment, we have a target of sourcing 11 per cent of our heat from renewable heat by 2020, and currently we stand at about 3.8 per cent against that 11 per cent target. I think that, as has already been said, there's a real case here for raising public awareness of what kinds of tools are there available to them to ensure that their homes are not only energy efficient, but that they're using the cheapest form of renewable heat and heat sources that they can. I think that we also need to do a bit more in terms of public awareness raising, but also not just think about domestic homes, but also think about public buildings as well. Scottish Renewables did a freedom of information request not so long ago looking at the amount of renewable heat that had been installed within our public buildings. Whilst there's a little bit of work going on, I think that about 1 per cent of local authorities came back to say that they were using renewable heat sources, which is a good start, it's at least something, but I think that how we can help local authorities and public buildings to ensure that they're leading by example as well in using a lot of the technologies, a lot of the energy efficiency measures that we talk about within the domestic setting, actually think about how we can do that across the public buildings themselves. Thank you. Briefly to touch on access to the gas networks, because we've talked about renewables, but less about that point. We recognise that can for fuel poor consumers be an issue. One of the things that we did for the current price control for the distribution companies was to incentivise them to extend the gas network to fuel poor consumers. We'll be seeing at least 17,000 fuel poor households in Scotland connect to the networks as part of that. I think that, Gillian, do you want to come back in on this, or perhaps Malcolm K? Can I just make a bit of a plea for joined up government here that I'm a bit worried about talking about renewable heat in isolation? We were talking earlier today about the need for an overall heat strategy. Now, one of the reasons why renewable heat is coming to problems is very difficult to get renewable heat in an environmentally acceptable way. I think any form of promoting particular forms of heat should be in the context of a wider strategy for what we want to do in terms of heating houses in a decarbonised way. To a certain extent, the same applies to installing energy efficiency measures. I know that they are generally good, so to speak, for decarbonisation, but if you are going to do some work in a house, should it not be in the context of a heat strategy so you are redesigning that house in the context of your low-carbon heat strategy with whatever form of heating the government has decided or the market has decided is the best form for that strategy, the difficulty with having particular sets of policy options to be developed in isolation, renewable heat here and energy efficiency here is, you can end up with all sorts of disparate measures which won't in the long run deliver you an efficient low-carbon heat system. I think Stuart Noble did you have... I was just going to come in on energy efficiency obligations. Well-designed ones are a way of tackling fuel poverty as well. With the devolved powers to the Scottish Government and the ability to influence some of the design there, that could help to tackle fuel poor as well. Do you have a range of measures that you are thinking of that Malcolm K is just... Not at the moment. Not off the top of head, but as I say, we look forward to... There are differences in housing stock in Scotland than there are in across the UK. Solid walls installations, et cetera, that are beneficial to Scotland particularly. Elizabeth Gore. Just on the topic of carbon and heat and fuel poverty, these issues are not mutually exclusive. There are overlaps and working on them. There's a cross-fertilisation, if you like, but I think it is important to take up the point that has been made about making sure that at some level the Government in particular is looking to make sure that targets are not being addressed in isolation, because, for example, in the energy company obligation on the suppliers at the moment, which is currently going through the process through the Scotland act of being devolved to Scotland, there have been instances where, through the best will, there have been instances where measures have not been delivered to a household because they don't deliver the carbon savings, but they would have made a great deal of difference to the person living in that house. We have to have rules to the programmes, we have to have targets, but we need to make sure that we're not cutting off our nose to spite our face and making sure that these targets are joined up. I'm Elizabeth Layton. Yes, just briefly on the point about joining up, we are in a very fortunate position that there is this commitment to the national infrastructure priority and the foundation programme for that, and indeed a key part of the forthcoming energy strategy is going to be Scotland's energy efficiency programme, which does indeed join up heat and buildings renewables and energy efficiency recognising the interplay between all of those technologies and solutions and recognising that you have to deal with the needs of the family, what their needs are in terms of energy or the needs of the business, and it's pulling together domestic and non-domestic. There's huge potential there, but I'm pleased that the committee is looking at this issue because it will rely on people like yourselves to hold the Government to account that they are going to meet that commitment in terms of achieving those targets on making sure that the climate change targets, the fuel poverty targets, and indeed it's designed in a way that we're maximising the economic benefits and the health benefits that can come out of a programme like that. Thank you. Gillian, did you want to come back on any of these points? I'll have to give it to someone else. Thank you. John Mason and then Jackie Baillie. OK, a different subject. I mean, I'm interested. It just seems to me every time we talk about energy and especially renewables, that storage of energy and storage of electricity is kind of high in the agenda. Am I right in thinking that that is a real bottleneck either at the national crew in storing the country's electricity or as was mentioned for a car, how much we can put in a car battery because I want to drive a bit further than 90 miles before I need to kind of recharge. So, you know, can folk give me a steer? Are we at the boundaries of science and we need to wait for the scientists to do more or is it just expensive and we need to get the costs down? I mean, I don't even know. If we pump water up Crookhan and then we had to depend on it to supply us with electricity, I mean, how many hours would it actually supply us with? At the moment I would run for at least seven hours depending on what was in the dam at the time. Crookhan is obviously, in terms of the technology challenge, Crookhan has done that job for years and many years, nearly, well, over 50 years, I think, after the other day. So, the other thing I meant to ask too was, how efficient is it? I mean, how much of the electricity do you get back down compared to what you've put up? The cycle is around about 80 per cent efficient. Right. But it also benefits from some run-off as well, so it is, in itself, a hydro station and not just a pump storage station. So we've got the ability there to expand Crookhan, double its capacity and or add more storage in terms of the dam height at Crookhan, and that's a potential project that Scottish Power are looking at. I think in terms of your question about technology, I think some of the batteries and the battery progress, some of that is probably more suited to very short runs when compared to a pump storage technology. It's just the way that the technology costs come out, but certainly there are some wider benefits for the system in terms of pump storage hydro, in terms of if it's on, it's providing a nursery, which basically helps the quality of the system in terms of the intermittent generation going on. Batteries can produce that instantly, but a nursery is one thing, and maybe Cusley might want to come in on it that the system requires to stay stable. We would like to bring pump storage to the market. We have been working with Scottish Renewables on a report that will be published in the near future around the batteries that may be preventing that. We feel that if some of the risks can be mitigated because it's a big infrastructure project, it does have relatively high upfront capital costs and it has a long construction period as well around about four or five years, but if there is some kind of risk mitigation scheme in place, we're not asking for a subsidy, but if there is some form of risk mitigation scheme into place similar perhaps to the mechanisms that are applied to our interconnectors, we believe that that could unlock the potential in Scotland. Not only at the site at Crookham, but at SSC have a potential project at Coyer Glass as well. Rachel Money, I think, want to come in. I was actually going to pick up on that point the student made that there is ongoing work in terms of storage, hydro pump storage. And as he said, we are working on a paper that hopefully will bottom out what those barriers are to delivering these projects in Scotland, but also hopefully quantify the potential savings that that might bring to the consumer as an end result. I think in terms of batteries, there is such a huge plethora in terms of the types of technology and it's exactly as you just said. Sometimes in order to bring down the costs of those types of technologies, you need to innovate, you need to see it working, you need to learn, you need to adapt, and then that's how technology costs come down as you're actually building it and you're producing it. And do we leave that to the private sector or should we as the Parliament and Government be doing something about that? I think that the moment for Scottish Renewables, certainly this is a very new sector for us. We are still trying to map out where the supply chain is in Scotland, what's happening in Scotland. I think that in the last few days you've probably seen news from Gia, who are putting on a storage battery to help to support three on-shore wind turbines, because, of course, for an island community that's absolutely essential. So there is work going on, but I think that for Scottish Renewables it's so new, it's such a new technology for us, but we do know that we absolutely need it, as First Aid talked about this morning, so you do have a variability in terms of generation. Storage is just essential, and we need to see it come through, we need to see it supported. Malcolm Cain and then Kirsty Berg. Thanks. Can I just reinforce the point about battery storage? I think that in relation to your initial question it's very close to being competitive now in many situations. Recently in Southern California Tesla has sold quite a large battery array for Southern California as an alternative to a gas... a CCGT, a gas turbine to provide system support. We're very close to the point, and of course the significance of batteries is that they're relatively scalable. They certainly fit in with the image of a very dispersed small-scale system. There are, however, some... I think it requires some government support, but I think, and of Jim may wish to comment, there are some regulatory barriers to use of battery storage. For instance, there are a number of solar generators in the UK which could easily build battery storage and provide more services to the system by spreading their output throughout the day. There's no benefit to them from that. They get paid their feed-in tariff for what they export, so they wouldn't get any extra benefit from it. Similarly for a consumer, if you build battery storage or if you install your own battery storage relied some peaks on the system, there's no particular benefit from you in the pricing structures they are just now. So it's partly a matter of government support, but to a large extent it's a matter of better incentives within the system for people to install storage, whether it's a generator, like the solar generator I've mentioned, or an individual. Once the incentives are there, I feel the market is likely to develop very, very quickly because it has developed in the past few years, and it's going to get to a level that would almost certainly be economic with any other alternative. We can't prove that just now, but the first step I think would be to remove the regulatory barriers and see what happens. The central point is there's potentially a huge role for storage in the energy system, and it's worth just remembering that it can be at different levels in the system, so it can be large batteries and really big stuff. There's intermediate storage which can be used on the distribution network, and it can also be storage in people's houses, so batteries. We already have that if you've got solar panel, it's usually attached to a battery, so we already have it in households, so at all of these levels storage has the potential to play a big role. Just picking up on some of the issues are clearly for government. What type of storage do you want to see and where do you want to support innovation? That is a decision for government in the same way as you might want to support particular types of generators. You are right, we are aware that there are some regulatory barriers for full development of storage and these are some of the things we are working on in our flexibility work. One example is how storage is charged, how it pays for using the network, in some sense it's a consumer when it takes electricity off the network and then it's a producer when it puts it on, but it performs a very important service so we want to make sure that where it is the case it isn't charged twice and that it's actually reflected how the contribution it makes to the system and the way in which it uses the network. Another example is, we haven't talked much about this but smart meters, so smart meters should be rolled out to all households by 2021 and just to pick up Malcolm's point one of the things you're saying it's important to get the pricing structure right. With the roll out of smart meters you will be able to measure exactly what consumers are using at any point in time and consumers can have control over exactly when they use electricity. The industry needs to do some back office work to make sure that this all works properly so half hourly settlement is a bit of a boring topic but just making sure that you're actually measuring and settling for the exact half hour in which somebody is using energy will contribute to an efficient flexible system. So what you can do is you can make sure you don't use lots of energy at peak when it is very expensive and that will be reflected in the price which you pay for that. We need to make sure and we're working with industry that we are ready to get these full benefits of smart metering which can work very well together with domestic storage for example. Right, there are a number of members of the committee who would like to come in with questions perhaps I could just ask if any of them have a question about the issue of storage of energy which John Mason has just raised or if we're moving on to a new topic perhaps. Gil I just wanted to practically have the full answer from Malcolm earlier on but back to transport I mean in one hand you're asking for regulation and deregulation but if we stick strictly to transport does the does the step change take place by regulating and then the investment comes after from the private sector? Well I think you have to do a combination they have to move in parallel with each other. You can't go out of city centres providing them with other ways of getting into city centres obviously you have to improve your public transport at the same time you regulate your private transport. I think a lot of the response comes from the regulation though you may know that in Norway at the moment something like 30 to 40% of new vehicles are electric because they have a lot of excellent incentives for new vehicles to be electric and it's a very attractive option they include things like no congestion charters but also free ferry services subsidies in the new vehicles and so on and that market has developed as it develops then the infrastructure I've spoken about tends to develop along with it so I think you can do them easily in parallel with each other but you do need to have a clear sense of direction as to which way you're going otherwise to get around this infrastructure problem of building all the necessary service stations is quite difficult. I think Jackie Baillie I wonder, can I just pick up on the point about smart meters because I think the technology is wonderful I'm pleased to hear you're working with industry. I am terrified for consumers there because some people will take to this like a duck to water but we already know that a lot of consumers in fuel poverty just aren't going to take to smart meters they're not the one switching to have fears about whether there's any work being done directly with consumers so that they understand the technology my wider point is about affordability I hear from members of the panel that we have the technology it's very exciting it's not the cheapest technology necessarily so I'm wondering who pays for all of this is it the taxpayer, is it the consumer and it's one thing to say as Ofgem did earlier that we will deal with issues of affordability can I just make the observation 15 years we've waited for prepayment meters to be capped I think we need a bit more progress on this issue a bit quicker Would someone like to come back in on that Elizabeth sorry we'll take Dr Winskell first of all I think this is a really important point and I do think there's a bit of a temptation sometimes to think that we have the same kind of level of wealth as Norway for example so there's a lot of subsidy going on behind that Norway story on electric vehicles and so on so I think we have to apply this kind of affordability test right across all of these policies whether it's supply, networks or demand and efficiency and demand and efficiency sounds like an absolute kind of no-brainer and in some ways there's an awful lot of work to do so the question is how far to push how hard to push on these policies over a sort of the next few years and how much of it should be a more gradual roll out and trying to learn from some of the demonstrations so there is a lot of uncertainty in this I think the national infrastructure priority is a very welcome move on energy efficiency there are questions about the whole housing stock getting up to Bansi and the costs involved there the figures that Elizabeth and the group have produced and it becomes quite an expensive the mass housing stock being converted up to Bansi has a large bill associated with it so we have to think about that how fast we can actually achieve that I think on some of these areas we're in the domain of working out what's the cheapest option I don't think we know that for heat particularly I think we know that efficiency conservation makes a lot of sense under any scenario so that's a question of how far to go how quickly in terms of regulation and the costs associated with that I'm still seeing lots of different evidence about renewable heat and low carbon heat and it's coming forward with very different mixes for the future different technologies so we don't really know the answer to that one and I think it would be wrong for us to say that we do suggest that there is a consensus around the heat problem at the moment that isn't the balance of evidence as I understand it so I think intelligent policy for this is a bit more about demonstration testing and making sure the things that Ofgem have been sponsoring for example on the distribution networks that kind of knowledge is being built into future deployment so it's not a case of we know what the solution is for many of these areas and we have to kind of go gradually in some areas I think the problem is that we've got very specific targets for like the renewable heat thing the government have been pushed very hard on that because there is a specific target for renewable heat and it's a very difficult one because there aren't affordable solutions and the off-gast grid is very difficult there so I think it's a very important concern that you've registered and I think we just have to apply that on lots of these different solutions as they mentioned Is it a question of balance in terms of affordability? I think we know so the level of kind of what we know about this differs across different parts of the problem so we know you know we can get the cost of wind down greatly there's been a lot of achievement there there's been much more problems so I don't think there's a universal kind of single answer to this but I think what I sense is that there's quite a lot of ambition in the policy which isn't necessarily reflected in sort of at least cost solutions so I think we have to be careful about sort of so the Scottish Government are very committed to localisation as one of the strands of the energy strategy now there's a lot happening on the localisation and decentralisation front but there's a suggestion that we kind of go for kind of city scale solutions for energy balancing universally I think that's far ahead of where we are so there's a danger of kind of introducing extra cost in the system just by not recognising that a lot of this is still at the innovation stage and we're not, we don't quite know when trials are telling us yet in terms of the cost and the cost reduction so there is a danger there Thank you, Elizabeth Gore I just wanted to pick up on a point that Jackie Baillie made about providing energy advice support to consumers this is not a new issue but with the roll-out of smart meters it's crucial the roll-out of smart meters is a huge operation it's going to cost a lot obviously there are benefits to having smart meters but unless we have a really good programme of advice that goes along with that to customers about how to get the benefit from their smart meter on an on-going basis after they've got over the initial point of this is something new that we've got then we're going to miss a huge opportunity to tap into consumer behaviour in terms of their energy use and that can range from a leaflet to telephone advice but also to face-to-face advice and it needs to be available across the country Thank you, I think Kirsty Berg I also want to come back directly to your question on smart meters because we're talking about this wonderful futuristic world where we're all controlling our smart meters from our, well they won't be iPhones at that point it's all great for those who can sort of grab the technology frontier but there will be a large number of vulnerable consumers who are not able to do that and we need to make sure that they are protected as part of that and like Elizabeth says it's going to be very important that consumers get the help and advice they need to be able to use the smart meters there are some direct benefits of smart meters to vulnerable consumers so currently if you're on PPM where most vulnerable consumers are you actually have to have a special PPM meter whereas with smart meters you just have one meter and you can switch the functionality and I think that is one of the benefits because you don't have to have a meter installed and if people feel comfortable and I completely accept that it will take work to make people feel comfortable then they can change that functionality so that you can move between a PPM and another regular type of tariff I think that I welcome the CMA's recommendation on a cap on PPM, I do think that that helps vulnerable consumers on PPM in addition we have another issue around PPM customers and vulnerable customers on PPM was the cost of installing a meter under warrants so people have had debts for a long time they have to have a PPM meter installed so that they don't run up to excessive debts Average costs for that has been £400 to have a meter installed and we don't think that's right for vulnerable consumers so we're consulting on capping that at £100 or £150 to manage that We are also, we're working with Citizens Advice Scotland to help vulnerable consumers engage in the energy markets where they're delivering sort of one to one service to vulnerable consumers and online workers who work with vulnerable consumers so training them up to help consumers look for the best deals We have to have we need to monitor carefully what's going to happen as we roll out smart meters I think there will be a number of benefits but vulnerable consumers will need support to make sure they maximise that benefit Malcolm C Can I offer a slightly different take on the affordability issue that's a political question but there's arguably a case for fiscal rebalancing that is for taking some of the costs which fall on our electricity consumers and putting them into general taxation There are good wider economic arguments for this we're dealing with what's essentially a global public good that is a clean climate There are good energy strategy arguments for this if you incorporate all the costs of renewables and so on into electricity it's hardly gone up in the past several years but the retail price has gone up a lot that in turn is bad in energy strategy terms especially if you decide that your idea for home heating is about electric heating it tends to distort the market not every country in the world imposes its renewables costs via energy prices it can be done in other ways for instance the United States does it mainly through general taxation through tax allowances and if you look at the way it appears in the national accounts just now it appears the tax a tax and spend it's not something purely internal to the electricity industry it's part of national accounts it's part of a British public expenditure so for many reasons I think it might well be worth reviewing the way in which this particular form of taxation is spread obviously affordability if you spread it on to general taxation that has great advantage in terms of the distributional consequences you can put the tax on those who can afford to pay so I know that isn't the way in which it's been done in the UK here the two but I think there is quite a strong case for considering at least an element of fiscal rebalancing here and Elizabeth Leighton Yes, I'm going to respond to the point Mark made about applying affordability test to upgrading of the housing stock and generally for transforming our heat provision and I certainly would wholeheartedly agree with that that the transition to a low carbon energy structure can't be down on the backs of those who are least able to pay for it on the contrary those are the people who most need passive houses that don't require any kind of energy heating source or another solution it's something called energy sprung which is a Dutch approach to refurbing houses where they come in and roll into your streets and refurbish or retrofit the homes up to almost an A rating in a week and then they're gone again and there are those solutions that are possible and different methods of paying for it not on their backs but we also have to look at those who are able to pay is how can we encourage them to invest in their homes and value energy efficiency in their properties and so we've argued for the introduction of regulation fair regulation that would be associated with incentives to assist compliance so that we can gradually bring the private housing sector up to scratch and closer to where the social sector is now because at the moment say in the social sector you've got something like if you're in an A or a very high rated house you've got 19% of people living in fuel poverty in the social sector but in the private rented sector 79% so it's a big difference between the two sectors and it's time now to bring that private housing sector up to scratch and so we'll move on to a question from Ash Denham He did colour most of my points in the PPM meters but we do also participate in the voluntary scheme of transferring PPM customers with some of their debt it's not open to all customers but we are seeing some customers transfer there as well so they can take their debt with them we currently offer two tariffs on the subject can I just ask a couple of questions about affordability some of my questions have been touched upon Malcolm certainly did I was wanting to know three things how do we achieve a low carbon future without adversely impacting on consumers secondly is there technology available that would reduce consumers energy bills and potentially remove them from being dependent on energy networks my third point is in relation to Ofgem's comments about protecting vulnerable consumers the committee on climate change when they looked at this back in 2014 said that household bills had increased by 75 per cent between 2004 and 2013 when there was a general price inflation of only 23 per cent bearing in mind what's happened with Hinkley Point which they're suggesting will add consumer bills of additional £230 to electricity bills a year on average is Ofgem failing to protect vulnerable consumers shall I start with the last one so this goes back to what is our role versus what is the Government's role so the Government's role is very much to decide what kind of generation it needs and where that generation can't be provided by the market provide the mechanisms to support that so for example the Government's programme for incentivising the right kind of generation to meet security supply and our low carbon targets is called the electricity market reform and there's a couple of aspects to that one is a capacity market but another is the decision on supporting nuclear generation we have no role in that we regulate the networks the monopoly networks and ensure that there's competition in the retail market so that's a what kind of generation you support and at what cost that's a question for Government I wonder so what were you rather How do we make households independent that's right energy networks that's a very good question well I suppose the starting point is do you want households to be independent of electricity networks one of the things we don't want to happen is just for the network companies to build lots of networks that we want them to think hard about what networks are actually going to be needed and what is going to be used we talked about storage earlier if you have a world where you've got great storage coupled with intermittent generation locally then there's obviously less need for networks but where we are now even for local networks quite often people actually want to be connected to the distribution network or the transmission network for the days when the wind doesn't blow occasionally when the sun doesn't shine in Scotland you may want to make sure you've got access elsewhere we do want to look at we do want to minimise costs and one of the key ways in which we are trying to incentivise the network companies to do that is through getting them to manage their network a bit more innovative using battery storage so that means if they do that you don't have to transport more over the transmission system likewise in the future we may move to households managing a bit more themselves which means we need less network costs but it is probably a direction of travel We've touched on already this morning about the Scottish Government's plan to move to get more heat demand to come from renewable sources but we know that the uptake in this area has been quite slow and one of the quotes that we've got in the notes here is that district heating there's an instinctive dislike of it in the UK so I'm wondering if some of the people here could maybe explain what that district heating would look like in a Scandinavian country and what the benefits would be and then I suppose the question is at the policy level should the Scottish Government be asking if you're building a new housing estate that maybe we should be incentivising them to be relying on district heating in those scenarios or not We possibly want to come back in on the previous point and I wonder if you might want to comment also on the question that's just been posed OK So I think we have to ask partly we have to start from what do we do well at the moment in the UK energy system so I'll try and wrap that up so what we have at the moment is a kind of a sort of national systems for heat which we call gas and electricity transmission and distribution that have evolved over a long time and we've got lots of kind of expertise on that so we have the biggest supply chain for domestic gas boilers in the world is in the UK We also socialise our costs across the GB grid so lots of the more remote parts of the grid get their access to the grid subsidised through a GB-wide system of payments and subsidies and network access on heat the evidence is that people like their gas boilers a lot so people are pretty content with they don't like paying the kind of increase in bills that Malcolm indicated so the traditional answer to how you address the problems of gas bill and gas price inflation would be to get the price of gas down so you allow international markets to kind of rebalance and you get your price of gas down and that provides cheaper bills for most people not everybody and it doesn't address some of the more difficult electrically heated housing stock or off gas grid but that would be the traditional response and how we've done it for decades so into that comes the idea of let's do Scandinavian model around sort of district heating so the question for me in that is is that the best way of delivering UK policy objectives on heat given where we're starting from because we're not starting from Denmark in 1970 or 1975 we're starting from where we are now with a heavily invested national gas grid so it's not obvious that the Scandinavian model is the one to follow for the UK partly because the infrastructure cost of getting there will be extremely high and that has to come out of the public or private funding so it's not a straightforward kind of model to copy at all it's also a question of how much buildings heat demand are you going to have in 20, 30 years time if you get the efficiency right and you get the conservation right so I think the ambition in CEP is to link together energy efficiency and heat supply but they're actually kind of playing against each other because if you get conservation efficiency right you don't need the case for investment in new heat infrastructure isn't as strong as it would be otherwise if you understand there isn't that much demand for heat in the future as there would be so I think we have to be quite careful about suggesting that we switch over the entire system of the way we've provided heat over the last 50 years since we started doing gas which is a very popular solution for most people so there's some difficult economic and social questions in that suggestion so I think where we are this is one of these for me where district heating is being looked at very actively by Scottish Government there are some interesting I think for new housing stock it may well make sense in many areas but I think it's one of those where we really need to be careful how quickly we want to kind of push on this as part of the next few years of infrastructure investment I think that needs to be very carefully looked at Is a reason why people like their gas boiler so much that they don't trust a system that they don't have control over if it breaks down or don't have the ability I mean what is the reason that people think that way I mean I was listening to some evidence do you have the evidence? Well I'll say the evidence it's reliable it's controllable it's generally affordable although that's been less of a so that's been more of a problem over the last few years but I think compared to where we were before I think that's where we can often get it wrong is that we don't recognise what we do well in the UK on energy and homes 30 or 40 or 50 years ago and there's still some way to go in terms of the most efficient gas boilers getting into people's homes so there are suggestions in some of the work that I've seen that the heat problem can be addressed through a combination of different technologies that it doesn't have to be wholesale infrastructure kind of change over because that does introduce a lot of extra costs into infrastructure spend and quite how that's paid for and recovered I think that's a big problem Malcolm Key wanted to come in I agree with everything Mark says but can I understand that I think the nature of the argument for district heating has changed a lot in ways that people haven't quite woken up to in the past few years that the argument used to be to a large extent in terms of efficiency I don't think that's a very strong argument modern gas boilers are very efficient and that's one reason why people like them there is however a new argument for district heating which is actually quite a strong one in terms of flexibility once you've got a district heating system you can use flexible heating sources it's much easier to introduce low carbon sources a lot of the Scandinavian district heating schemes which are mentioned have moved across to biomass one can envisage a future in which for instance when you have wind farms which are whirling away throughout the night we were talking about storage earlier as though it was all about storage of electricity but actually if we're looking forward to the future storing heat is much easier and much cheaper than storing electricity it might be the better way to store energy rather than storing it in the form of electricity so the advantage of a district heating scheme if it fitted in to some overall future strategy was that it might provide this sort of flexibility to help to fit into an integrated overall energy system now I would agree that no one's talking about retrofitting all big cities immediately but there are a lot of commercial developments in all the cities in the country which could easily use forms of district heating and cooling there are a lot of new estates being built there are a lot of ways in which you could gradually spread this sort of approach and I'm not really convinced that the social arguments are that strong people in Denmark and Finland aren't that different from us provided you can get the right sort of district heating system I don't see why they shouldn't be acceptable Elizabeth Leighton Yes on the district heating I think generally agree with what's been said I think the Scottish Government has put a lot of emphasis on growing district heating but let's keep things in perspective I think not even they would suggest that we're going to move to a Scandinavian model overnight we're talking about incremental slower change but it's not happening fast enough even as it is and it doesn't have the regulatory protections in place for consumers or operational standards in place and so there is several political parties and the government is committed to a warm homes act it's expected that regulation of district heating would be core to that forthcoming legislation so some thinking needs to go into building on the expert commission on district heating which made specific recommendations about consumer protection operational standards and looking at a supportive policy context that would require connections where it is possible and appropriate for example what Malcolm was just talking about connecting to new anchor loads of a new leisure facility for example and I think on the behavioural issue people like the boilers because that's what they know how many of us have seen been in a house that's connected to a district heating system probably none of us but what a great thing you don't have to take responsibility for the boiler or for servicing it or replacing it and so it's a different way of thinking about your heating system so I think the forthcoming bill is an opportunity to put in the protections that need to be in place and also the supportive policy context to make it more attractive for private investors to come forward and invest in bigger schemes Thank you Andy Wightman wanted to come in with a question Thank you, convener Yes, I want to ask a question and get the sense from witnesses about the challenges we face in this because it seems to me that not only is it quite a complex challenge to decarbonise energy systems but we're talking across energy systems, transport, housing as well as generation and distribution as well so my question is do we actually have the institutional capacity to do this because the kind of joined up thinking that's required across policy areas the timescales that are involved which cross parliamentary sessions that we need for the public and private sector to work together the fact that some of the changes are required are to European scale some are to UK scale some are to Scottish scale some are to local scale I would be interested in any sense of the scale of this challenge and have we done this before and can we do it I don't know the challenge of reconstructing after second world war I mean it feels like that kind of challenge at the institutional capacities there and a specific question would be on the role of municipalities because we see across Europe a lot of innovation taking place in municipal government which traditionally prior to the 1940s was obviously an innovator here in the UK as well but hasn't been in the last decades Who would like to respond to that? Malcolm Cair The UK has a good example of how to do it in the form of the climate change committee which has providing expert advice it's providing recommendations to the government those recommendations have always been accepted we've got a structure there except that that is a climate change oriented structure I think one could envisage something similar in the energy sector I know it's in some ways more political but something which provided expert advice non-political advice stretching over the longer term that was consistent with the climate change committees timescales and carbon budgets and so on so I think we're halfway there I think the reason we haven't got any further of the way there is because there's still a very great ideological uncertainty at the top end of government about whether they believe in markets or not do you want markets to do this in which case you don't want central guiding strategy you want to get prices right and then leave it to markets and I think that needs to be resolved one way or another if you want to rely on prices to deliver this then you have to take the sort of tax issues we were talking about earlier much more seriously you have to decide what sort of signals you want to give what how regulation is going to ensure you get the right price signals and so on if you don't want to rely so much on markets then you do have to have a forward strategy of the sort I've described coming from the sort of committee I've described which would give a basis for investment which the government could then secure but at the moment I think we're in rather an uncomfortable limbo between these two situations where the government spends half the time that's not the Scottish Government I'm talking about the UK Government here but I think the Scottish Government may have a part in this as far as the Scottish part is concerned the UK Government is spending half the time that should be delivering it and the other half the time saying but actually we want Hinkley and we want this amount of wind power we want this amount of this and we want this amount of that and that leads to rather a messy situation which it hasn't yet quite affected the other sectors it has to an extent with gas because the government has said both we want to leave gas to the market but we're going to adjust the capacity market until we ensure that we get some more gas fired power stations built so you've got the saying there's an uncertainty there about whether it wants markets or a central strategy and I think it has to at that level and at the Scottish level decide one way or another on this which way forward is it going Is there not always a tension between markets and government strategy? Well indeed you can certainly have both and to an extent doing it for instance through the feed-in tariffs which are now competitive through the capacity market which is a market the trouble is they've got the wrong result from the capacity market the first time around they've got a lot of diesel generators built and a lot of all cool fired power stations kept in place the trouble with relying on markets is you get the outcome the market wants which is the most efficient outcome in terms of the parameters you've set and that's the sort of area where I think the government does need to decide if it's prepared to accept the outcome of some sort of a market system then you probably could introduce efficiencies that way but if it's really not prepared to then people are going to be very reluctant to invest if they think well the government will change its mind and said that's not the result we want, they're going to fiddle the rules of the game until we get some different result I think Stuart Noble wanted to come in Con the capacity market because there are some changes going through there in terms of the result what they didn't want we are actively working to try and level the playing field and the competition within the capacity market some of the results you are seeing are due to non-cost reflective charges within the system Scottish Power are fully supportive of embedded type generation but it can't be left to non-cost reflective signals to drive that outcome because you won't get to efficient outcome at all the changes we support the changes that the government have been made and we believe that you will see a more competitive outcome in the next auction I just wanted to qualify one of my points on crookin as well it does depend how much water it's got in the dam in seven hours but it can run a little bit more than that at the moment the exact numbers I don't have to hand but my mental arithmetic tells me it's a little bit more than seven hours but I don't know which government I agree with the changes that Bay's deck have made and the work being done by the industry modification process itself so we have an industry modification going through the system at the moment which will be in front of off-gem for approval aiming for some time in December and how they award small generators thank you and Kirsty Burke so your question is the challenge big and are we set up institutionally for it is the challenge big, yes, absolutely on the institution's question it's always a challenge to get different institutions to work together and look at the big picture but I think there's some positive things here so on flexibility trying to make sure that we've got an energy system that can be efficient and flexible the work that we are doing is very much joint with the UK Government it's actually a joint programme of work and we've been working very closely with the Scottish Government as well over the last year to talk about what we see as the challenges to meet flexibility and understand where the Scottish Government is coming as well so we want to commit to making sure that this is a joint piece of work on one hand and the UK Government does something on the other hand so this is a joint up programme can I also just pick up on the markets versus regulation there is no such thing as a perfect market in particular in the energy industry because there are a lot of rules about how things run so I'll just give a couple of examples so some of the rules are around how you charge for using the network that isn't a market you have to set rules for it and parties which are seen as market participants have to work under these rules and what we need to do as part of the flexibility work is make sure that these rules are fair in the sense that they do provide a level playing field and don't subsidise one technology over the other without us realising that this is happening so it is complex and we always have to think about what are the rules around this another area is again when we are talking about allowing innovative and new business models in so you could just say let's leave it to the market, anyone can come in develop their own models, supply whatever households they want you don't want to do that you want to encourage innovation but at the same time you want to ensure a level of protection for consumers and people who are going to be using this and therefore you set some rules around what suppliers or what market participants are allowed to do and that is one of the challenges that's a big policy challenge in this getting that balance right, we talked about that this morning on allowing innovation allowing the market to operate but making sure that the rules give a level playing field so that you can keep the costs down for consumers while we make this transition Rachel Money and then Elizabeth Leighton I just wanted to briefly come in and say that there's a lot to be positive about in terms of Scotland's approach to this transition to a low-carbon economy and I think we have to be mindful of the fact that we're not doing this on our own it's a global effort everyone is pulling in this direction and I think we can take a lot of heart from the fact that so many of us around the room are all certainly singing from the same song sheet we're talking about energy efficiency we're talking about using low-carbon sources protecting the consumer and I think you look at Scotland's engineering history or history in terms of innovation we're still doing that and we're doing that at the most cost effective means Scottish Renewables has been producing a number of reports looking at how we can further reduce costs in terms of onshore wind we have the Catapult Centre down in Glasgow looking at how we further reduce costs from offshore wind and I think again trying to take advantage of those emerging markets with storage and keeping flexibility where we can and also thinking about the community element in this in terms of we've got very strong public support as well and I think we shouldn't we shouldn't forget that and I think we've got a lot to be positive about and particularly with the energy strategy making its way hopefully next year I think again thinking about where does this committee's role come into force I think seeing those draft energy strategies that come through and looking at it in more detail and actually asking that question is it going to meet a lot of its objectives across the board Go back to the Andy Wightman's question about the role of municipal government and I think it's a very good question because there are a lot of expectations being placed on local authorities and more and more so on communities themselves in helping to deliver this agenda and yet I think there is a mismatch between that expectation and the capacity that's either in place or that they can afford to put in place there are many local authorities that are doing quite exciting things with setting up ESCOs working either renewable or low carbon generation and providing affordable energy to many of the vulnerable people in their communities but they are they're unusual, they're rare and they're very high risk and so I think there does need to be in developing these programs like the national infrastructure priority some consideration of what capacity is needed at the local authority level and support to communities so that they can play their part because they often are those that know best who's vulnerable and needs help what are the energy needs how can they best be delivered in those areas so I'd say yes it is a gap that needs to be addressed thank you very much the other end of the scale, the European dimension I'm just wondering if anyone has got any observations on obviously it's a time of uncertainty but we need an energy union across Europe we have a hardwired market in terms of pipes and cables already any thoughts on how that might develop in the future Mark Winskell there is quite a lot of I think essentially we don't quite know what settlement is going to be in terms of the UK access to the integrated internal energy market so there are different models for that I think it's potentially cost increasing with the Brexit vote that we've already seen some suggestion that some of the large capital projects are going to have to pay more for the capital that there is an added element of uncertainty about that now so I think the energy union is just getting going so there isn't a huge amount of the UK getting out of the large scale integration of electricity networks for example that's envisaged for the future I think what we have now is a lot of uncertainty about what the access to the market will be in the future UK will have less influence on the rules making up the internal energy market in Europe I think it would be a lot of suggestions that some of the cheapest ways to go about energy transition is to do it on an international scale and that means having access to the internal market and being part of an interconnected system I think that's going to be more difficult now there's a lot of uncertainty but I think it's probably added costs have been introduced with the uncertainty that we've got but is your view that it is still a vital part of sorting our energy needs regardless of how it might be more complex, expensive or whatever it is is it still an imperative that we develop integrated networks at that European scale It's quite difficult to say that because it becomes matters of political choice as much as an imperative so there might be a strong technical and economic imperative that if we want to do this most affordably the more integration the better and the UK was having to construct interconnected to bring it up to a more European level the UK is still quite an island system so it is on a trajectory to be a lot more integrated but that was on the assumption that it was part of the energy union and the monies that go with that so there's European funding for interconnected which the UK is still involved in at the moment I think for the future I'm thinking a lot of these issues there's matters of political discretion which sort of aren't consistent with the least cost pathway and which one just has to recognise where we are now unfortunately Not part of that whole debate or discussions well in terms of interconnectors Norway does have access to the internal market so it has I think that the Norway model is the model where rather like lots of other discussions on sort of labour and economy that there is access but no input to the negotiation so the the fees still have to be paid to be part of the market but Norway doesn't have its doesn't sit round the table on things like market codes strategic issues that the UK has up till now been quite influential on I don't know if other people might know more than that but that's my understanding Yes, Malcolm Key briefly Could just add that two of the current interconnected proposals for the UK there's one with Norway, one with Iceland neither of which is in the EU I strongly suspect that trade with Europe will continue in the future much as it has before and that these sort of interconnectors essentially if they make sense in the way that they have before so I don't think it's going to make an enormous amount of difference the only problem at the moment is simply the uncertainty that there are four or five interconnected proposals all of which are really being put in the back burner at the moment until people know what's going to happen but it's unlikely that the trade between Norway and the European Union which is very extensive in electricity and other energy sources isn't really impeded by the fact that they're not members so I very much doubt in the long run that it would make any great deal of difference there is a short run problem Thank you, I'll take two questions I think Dean Lockhart and Liam Kerr wanted to ask and I don't know if any committee member who's not asked of our Richard Leonard think is also perhaps the three of you could perhaps pose your best question each and then see what our guests make of that in the ten minutes remaining Dean Lockhart Thank you convener I'll do my very best first of all I refer to my register of interest in respect of a shareholding in a smart meter company which operates in England not Scotland I'd like to elaborate possibly on one and central to a lot of discussions across a number of sectors this one in particular As I see it Brexit cuts across a number of areas discussed today including EU regulatory requirements targets on renewables and otherwise the interconnector market we've just discussed I would welcome thoughts from other guests as to both the immediate impact of Brexit and the further term impact of Brexit going forward Thank you Liam Kerr My question is very specific almost certainly to Mike Tholen of Oil and Gas UK around the oil and gas industry and some of the difficulties that it's been facing firstly the UK government cut tax on the industry and that seems to have had a positive effect on production we know that the industry has reduced its lifting costs significantly so what can the Scottish Government be doing or what can we as a Parliament be doing to support the industry through these difficult times specifically I have in mind things like decommissioning how do we get it coming in at Dundee, how do we get it coming in at Nigg that sort of thing and secondly what can be done in the meantime with the workforce we have a very highly specialised energy industry that has suffered rather recently I'm not readily persuaded that they can all be ported into renewables I don't think that's happening at the moment I don't think it will I'm not persuaded that we can retrain them all into something else so do you have a view on what is the solution to keep our talent in the UK to keep our talent in Scotland and how do we re-engage them in the short and long term Richard Leonard and so I'd like to broaden if I may the discussion a few people have mentioned the supply chain the supply chain in gas boilers I think Rachel mentioned the supply chain earlier on and I just wondered in a sense this relates to the oil and gas industry too where do you think there will be an indigenous jobs dividend from some of the investments that you're speaking about and supplementary to that how do we steer it so that there is an indigenous industrial jobs dividend from some of the things that we've been speaking about this morning perhaps we could allow Mike Thorland to come back on Liam Kerr's question first of all as Mike's not been part of the discussion up till now right and perhaps to bounce straight from Dean Lockhart's doing to Liam's the Brexit thing even from our own perspective regulatory uncertainty long term and the ability to access influence broader energy policy Europe is vital to every part of the energy sector not least my owners I'm sure the other proponents are on the table in terms of the outlook for our industry and how the Scottish Government can best help the having tax changes the tax changes that there have been only had a modest influence on the investments that have been going on because the production wise we have seen is mostly driven by investments over the last four or five years some of which were when oil prices were high as well the challenge going forward is to to seize the efficiency way that we have and make sure that we are competitive for the future in a way that we have been competitive in the past the focus on decommissioning is one element but is only small part of the bigger element of the successful future for our industry because with resources we have around the offshore we need to keep investing as well as running the business as well as indeed decommissioning those things which have reached the end of their useful life so attention between those things which investment is vital for you touch on the supply chain and the capabilities of it the capabilities within the decommissioning picture we're trying to help inform the market more what the decommissioning outlook looks like there's a lot of work going on with Scottish Enterprise on that and the Scottish Government has been a very strong proponent of those skills I think my challenge back would be as I mentioned to some of the committee earlier in the informal session Norway it's first and foremost a big exporter warring gas secondly it's skills in the old fields goods and services sectors it's second biggest export after that you'll be amazed to hear it's fish so making sure that our economy is successful with its industrial capability and able to reach a market of more than 100 countries that use those goods and services will be vital in the future and we are leading the way in how we are adapting our business to mid-late life plus those skills mean that we can teach others how to do them to do them well and found them with Scottish jobs and Scottish technology so that's the path we're trying to walk Thank you and Richard Leonard's question I think possibly Elizabeth Leighton wanted to come in on that so it's nodding my head vigorously because of course one of the main arguments that we've made for the national infrastructure priority is that it would or could deliver jobs and not just jobs where like say another infrastructure project a hospital is being built or where the new fourth crossings is being built but jobs in all of our communities that we would all benefit from that because you would have increased jobs you would have increased money in the local economy reduction in fuel poverty so less people suffering from inequalities so it's a real win-win and been estimated at having a value for money or a benefit-to-cost ratio of two to one but it does mean that it has to be designed in a way that we're not going to repeat the mistakes of the past of energy efficiency programs where a lot of the jobs have been sort of flown in or shipped in from the south or from the central belt and so not the benefits not felt in rural areas so it needs to be designed such that local jobs and supply chains are prioritized and there are examples of how that is being done in more recent programs and the other factor that's really critical is that it's a multi-year commitment so an infrastructure priority over 10 to 15 years with multi-year commitment on the budget is absolutely critical or else your local plumber or your local electrician they're not going to train up in some of these new skills that they will need because they're not sure will the job be there the following year so with those elements in place yes we think 9,000 jobs a year all over Scotland we think about that Rich on money Just to come in on that point about supply chain I think it's a really valuable question about how do you map the supply chain across the energy efficiency sector low-carbon transport heat, electricity and storage and all these other emerging markets I do know that Scottish Enterprise have done a fair amount of work in terms of mapping the supply chain with relation to offshore wind so that a supply chain map across this low-carbon economy that we're striving to have so I guess again my question will be back to the committee of is there a way that Scotland can take a greater role in mapping that supply chain and not only doing that but looking at where new opportunities are arising and looking at how much we export in terms of our own intellectual property there's some fantastic examples out there companies like Scure Energy working all over the world in terms of putting their products into projects internationally and obviously examples like the European Marine Energy Centre in Orkney using innovation to drive that intellectual property and seeing that learning be pushed around the world basically I think also we have to look at in terms of number of jobs that we have for Scotland is around 21,000 people are employed in Scotland related to the renewable energy sector we rely on getting those statistics from what was biz now bees department down south and again from Scots renewables perspective we'd probably quite like to see that Scotland take a bit more ownership in terms of collating what the value is in terms of job creation and ensure that we get those statistics that are robust and produced annually as well currently I'm not sure if we're capturing all of that value and I'll also make a very brief point about also just trying to get really down to the nitty gritty in terms of the investment figures how much investment's actually being brought into the Scottish economy and I think we need to do a little bit more work in terms of really ensuring that we've got those statistical statistics on that and perhaps just a last contribution from Mark Winskell, a brief contribution think about this in two ways energy as an input to the economy or energy as a source of economic growth and other economic policy objectives so they are quite different and they can be intention at times but I think there are two ways of trying to get them to add up together so I think one of the things is to encourage a whole system kind of view of energy which includes traditional energy as well as new energy and how both of those can be maintained to some extent going forward and at what point do we have to think about a more of a transition of that traditional industry one of the things that I think one way into this is to think about industrial clusters and I know there are some thoughts about this from keeping heavy industry in central Scotland and thinking about things in a more joined up way and so there are opportunities here I think for Scotland on the CCS front that there are ways of combining energy intensity with decarbonisation and a Scottish opportunity given the CCS intro so I think keep going on that as well as some of these more specific kind of growth areas so I think this does need joining up in terms of traditional industry and sort of emerging new industry and also the general cost of energy into the economy so there's different ways of getting into that Thank you, right as well as we bring this session to a close I'd like to thank all of our witnesses who have come here and spent time with us today I'll now suspend the meeting and we'll move into private session so we'll have a few minutes just to allow the gallery to clear as well