Page last updated at 01:39 GMT, Tuesday, 15 December 2009

A second energy boom for Scotland?

By Hayley Millar
Business Correspondent, BBC Scotland

Hayley Millar

The Scottish Government believes we can generate nearly half our electricity from renewable sources by 2020.

Is this claim an ambitious strategy to impress people in Copenhagen, or does it represent a genuine economic opportunity for Scotland?

Scotland's wind and tidal resources are unrivalled in Europe.

If we could harness this resource we could potentially generate up to 60 gigawatts of electricity, according to the Scottish government.

That represents about 10 times more than we use, so in theory, we could export most of that and make money.

There is just one problem.

Wind farm
Being the windiest country in Europe means Scotland has the potential to be a market leader in wind power
Scotland was once ahead of the rest of the world in wind power development, with Myers Hill one of the world's leading test centres
A lack of investment meant its technology has failed to keep pace with the rest of the world, and it has now been overtaken by Denmark and Germany

The national grid which carries electricity around the country is not up to the job.

We need major investment to get renewable sources connected to the grid and we also need to increase its current capacity.

There is already a bottleneck between Scotland and England. In other words, we need to replace a single track road with a four lane motorway.

The first test of the Scottish government's commitment to renewables will be its decision on the new Beauly to Denny transmission upgrade.

This would be the backbone of Scotland's renewables potential.

But could Scotland go even further than simply being a major exporter of electricity?

Could Scotland create industries around this and create, as the government hopes, tens of thousands of jobs?

In making the programme 'Power of Scotland' I spoke to many people in the renewables industry who believe the political will and ambition is there.

But they want to see major financial commitment from the government in Scotland and the UK to develop a domestic market for renewable technologies.

Stormy seas
Marine technology has been developed in Scotland since the 1970s, with expertise in wave and tidal power centred in Stromness in Orkney
Scotland has produced the world's largest hydro-electric wave energy converter, "The Oyster" - the first of its kind to be producing electricity
Scotland has the potential to create 105 megawatts of electricity from marine power by 2015 and 12,000 jobs

Onshore wind was first developed in the UK and Scotland in the 1980s, but we let our lead go, because we failed to invest in it.

Denmark did invest in it and is now enjoying a return eight times bigger than what the country invested. Denmark still holds its lead today.

Now Scotland has another opportunity and an early lead in marine energy.

Edinburgh company Aquamarine Power are already producing electricity from a wave device off Orkney.

This experimental technology costs millions of pounds to develop.

The motivation for Aquamarine's Chief Executive Martin McAdam and his investors, is very clear.

He said: "People invest in this technology, not because they want to save the planet which is one of the objectives that we have, but it's because they want to make money out of helping the environment. That's why people invest."

Others countries are also developing renewable technologies and companies will go where the best support is.

So Scotland will have to work hard to keep its lead.

Many of the skills and technology needed to develop marine and off shore wind power are already embedded in Scotland's oil and gas industry.

Carbon capture plant
Carbon capture is a system of capturing the carbon dioxide created by fossil fuel power plants and storing it away from our atmosphere
Scotland could use the knowledge and infrastructure from the oil and gas industry to pipe carbon into the North Sea, storing it in porous rocks miles below the sea bed
A test plant in Longannet is currently developing carbon capture and storage technology but plants in the US are doing it on a larger scale

Our offshore expertise should give Scotland another advantage and people are already starting to transfer from the oil and gas sector into offshore wind.

There are a few caveats though.

Offshore wind development will be very expensive and will need large government incentives.

Despite Scotland's potential in marine energy, the whole sector is still under developed.

And of course a multi-billion pound investment in the national grid must happen or renewable energy will be dead in the water.

Despite the hurdles, experts in renewable energy believe Scotland does have an opportunity to play for.

Jim MacDonald, principal of Strathclyde University told me he thought the eventual opportunity for Scotland could be significant.

"I think the job opportunities and the industrial base that could be created, could make us absolutely amongst the leaders globally," he said.

Scotland built a worldwide industry from oil and gas. Could it do the same with wind and tidal power? Could Scotland create a second energy boom?

Power of Scotland is on BBC One Scotland on Tuesday at 2235 GMT.

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