Latest news with #AcornProject
The Independent
8 hours ago
- Business
- The Independent
Lack of recent meetings with Treasury an ‘issue of concern', says Swinney
A lack of recent meetings between the Scottish Government and the Treasury is an 'issue of concern', First Minister John Swinney has said ahead of the Chancellor's spending review. Rachel Reeves will lay out her spending priorities on Wednesday, with funding increases expected for the NHS and education – which will result in greater cash for Scotland. But speaking to the PA news agency in Glasgow on Monday, First Minister John Swinney said his Finance Secretary Shona Robison had not recently spoken to the Treasury about the Scottish Government's requests for the review. 'The Finance Secretary has had discussions with the Chief Secretary, but not recently,' he said. 'That's been an issue of concern to us that there hasn't been an ongoing dialogue. 'I raised our aspirations about the spending review with the Prime Minister when I met him a couple of weeks ago in London and have set out, particularly, the importance of the investment in public services and the necessity of that decision on the Acorn carbon capture and storage project, because that is crucial for us finding a way forward to address some of the challenges that we faced at the Grangemouth site.' The Acorn project has been overlooked for funding by successive UK Governments, angering Scottish ministers. As well as Acorn, Mr Swinney also urged the Chancellor to commit to lifting the two-child benefit cap. 'After all the year's of Conservative austerity, I want to see a decision to lift the two-child cap from the benefit system, which is forcing more and more families into poverty and children into poverty,' he said. The Scottish Government has pledged to mitigate the impact of the two-child cap north of the border, but has consistently pushed for the policy to be scrapped at UK level. The First Minister also pushed for a 'different approach on welfare reform', after the UK Government announced a £5 billion cut to benefits earlier this year.
The Independent
21-05-2025
- Business
- The Independent
Acorn project ‘crucial', says minister after claim Reeves ‘going cold' on scheme
The UK Government remains supportive of the Acorn carbon capture project, a minister said as he responded to claims the Chancellor is reportedly 'going cold' on the idea. Energy minister Michael Shanks said the project based in St Fergus, Aberdeenshire, will have a 'crucial' role in removing the carbon emissions of industries which are difficult to abate. The Acorn project aims to use existing pipelines to transport industrial carbon emissions for storage under the North Sea. It was placed on a 'track two' reserved list for future funding from the UK Government, but business leaders are calling for it to be treated as an immediate priority. Last week a cross-party group of 71 MSPs and 10 MPs signed a joint letter urging Chancellor Rachel Reeves to deliver the money needed to progress the scheme. During an appearance at Holyrood's Economy Committee on Wednesday, Mr Shanks was asked about the UK Government's stance on carbon capture. SNP MSP Michelle Thomson said there have been reports Ms Reeves is 'going cold on Acorn specifically' while proceeding with similar projects in Teesside and Humberside. Mr Shanks said: 'The Government is supportive of the Acorn project, the Secretary of State for Energy has been really clear in Parliament that we see it as a crucial part of how we deliver our decarbonisation journey for Scottish industry and energy, and it is a really important investment proposition. 'But it is obviously a significant amount of public money and it's right that it's for the Spending Review to make that decision.' He said Acorn is a 'serious' part of his department's bid in the upcoming Spending Review. Mr Shanks also said the Scottish Government's ban on new nuclear power north of the border has been 'hugely problematic'. The Economy Committee also discussed the recent closure of the Grangemouth oil refinery and attempts to find new low-carbon businesses for the site. The refinery was the only one operating in Scotland and is now becoming an import terminal for finished fuels. Camilla Pierry, deputy-director for energy security in the UK Government, said 'robust' plans are in place and there is not expected to be any short-term impact on fuel supplies or fuel security in Scotland.
BBC News
07-05-2025
- Business
- BBC News
The choppy waters between North Sea oil and green energy revolution
The choppy waters between North Sea oil and green energy revolution 7 minutes ago Share Save Douglas Fraser Business and economy editor, Scotland Share Save Getty Images There is concern over the pace of transition for oil and gas workers into the renewables sector The Great Energy Transition is under way, and may come to define this era, but it's not going smoothly. For the oil and gas sector, a further sign of its decline - both long-term and cyclical - is in 250 onshore Aberdeen jobs being axed by Harbour Energy, now one of the biggest operators. With a global portfolio of producing fields, it has other places to put its capital, from Egypt to Argentina, where profits are not taxed at 78%, and where the government is not refusing to grant new drilling licences. It is also reviewing its commitment to the Viking carbon capture and storage scheme being planned for Humberside, blaming "repeated delays" by the UK government. The same company is a partner in the similar Acorn project, based in north-east Scotland. Those "repeated delays" affect both projects. It would be less concerning if there were a transition for oil and gas workers into the renewables sector, re-skilling as they move. For many, including their union representatives, that is merely rhetoric. And the gap between one industry declining and the other rising is growing wider, with the decision by Ørsted, a Danish company, to halt development of a vast offshore wind farm off the coast of Yorkshire, called Hornsea 4. The project secured a valuable and hard-won guarantee of a minimum price for 15 years, known as a Contract for Difference. That reduces risk for investors. But Orsted, majority owned by the Copenhagen government, is giving that away, and paying heavily to break supply chain contracts, because the financing of the project no longer stacks up. The clean energy revolution is also grinding to a halt near Scotland's west coast. Drax, the owner of the hydro power station inside Ben Cruachan near Oban, had plans to expand its potential for pumped storage - a form of storing power by pumping water uphill when demand is low and there's excess supply of wind power, and then releasing water steeply downhill to generate power when demand goes up. To reduce risk for investors, it wanted to win a similar type of contract for a minimum price (as well as a maximum one). But it's decided to postpone that £500m plan, blaming the capital costs. Getty Images Some high-profile offshore wind farm projects have been halted or scrapped Even before the auction of contracts has been designed by Ofgem, it's backing out of bidding later this year, looking instead to the UK government and its regulator, Ofgem, to help reduce the risk and the costs associated with it. Meanwhile, Drax is looking at less ambitious options for expanding the existing power station, now aged 60, which could generate both power and the cash to go much further. Such delays put a big question mark over the Labour UK government plan to reach 95% of British energy generation from clean sources within only five years. If current plans cannot stack up financially, there are many other plans that are put into doubt. These include four projects for pumped storage in Scotland - three of them new, one an expansion - and the humongous ScotWind plans to locate hundreds of fixed and floating wind turbines arrayed around the coast of Scotland. Without pumped storage, the greener grid will require a lot more battery storage, and that is not proving popular with those who live near planned sites. Because the UK government has set such an ambitious and high-profile target for clean, green power, it may be that these developers are using the leverage of a halted project to get a more attractive set of price guarantees. These don't come from the taxpayer but from future electricity bill-payers, and Ofgem has the job of balancing the consumer interest with the objective of the energy transition. It may also be that Harbour Energy is backing up the wider oil and gas industry in putting pressure on the UK government to give it a less hostile business environment. It took only a few minutes from the announcement of Harbour's job losses to Prime Minister's Questions, with both the Conservatives and SNP piling on the pressure. Zonal pricing over national pricing Across the British energy sector, this pressure is building at a vital time for three difficult and complex decisions. ONE. The UK government recently closed a consultation on the future of the oil and gas industry, the way it is taxed and licensed. The industry has been lobbying furiously for a slower wind-down of drilling activity, arguing that Britain will continue to need oil and gas for decades, and it is more secure and less damaging in greenhouse gas emissions if that is domestically produced. To concede that argument would be an awkward U-turn, particularly for the Energy and Net Zero Secretary, Ed Miliband. Not to concede it puts future job losses at his door. TWO. REMA, the Review of Energy Market Arrangements, is a Whitehall project to change the way markets work. The big decision there is over zonal pricing, instead of a national pricing system. The case is made, most enthusiastically by retail supplier Octopus, that it could cut prices in some parts of Britain if they reflected the market rate for regional supply. So lots of wind power in northern Scotland could mean cheaper prices for northern Scots. That is in theory. Critics of the plan say it would add cost overall, prices would be more volatile and unpredictable, which is itself a cost to suppliers, and cheaper power in one part of Britain would likely mean higher prices in other parts. Developers of renewable energy say such a change would render it hard to make an investment case, where revenues become even more uncertain. And bedding in the system could take until the mid-2030s, and delay progress on other priorities. An alternative outcome from REMA would be an evolved system with several reforms: Technical and economic fixes to balance the power grid when the wind doesn't blow, and reduce the dependence on back-up gas plants Opening up access to smaller generators, in solar, for instance: improving price transparency And reform of those Contracts for Difference to align them with the changes the power system needs, and not merely with lower prices for consumers. The intention is to send signals to investors that they can have the confidence to commit an estimated £40bn per year to fund the energy transition. Ed Miliband is expected to make that decision this month and announce it next month. Getty Images Keeping domestic energy bills down could come at a cost of securing jobs To back up that confidence for investors, the taxpayer-fuelled National Wealth Fund has added to a busy Wednesday of energy sector developments by committing £600m, alongside Bank of America, three Spanish, one French and two UK banks, to complete a £1.3bn Scottish Power loan. This is for the Glasgow-based, Spanish-owned utility to build some of the grid connections necessary to link renewable power with customers. The total GB bill for that, however, looks more like £60bn. In this case, it contributes to two high-voltage subsea links - one from Torness in East Lothian to County Durham, the other from Fife to landfall in Lincolnshire and on to Norfolk, while installing new substations and overhead transmission cables, often facing the headwind of local resident opposition. And then there's THREE. Ofgem is due to conclude a review of the costs to developers of having access to the national grid. Known as TNUoS, Transmission Network Use of System, this has long been controversial in Scotland, because it places a rising cost on generating firms per unit of power as you travel north. This was designed more than 30 years ago, as an incentive to build big thermal power stations nearer cities. In the north of Scotland, where the most reliable winds blow, there's a hefty cost. In the south of England and Wales, connection is not a cost, but a subsidy. SSE Networks, which owns and operates the north of Scotland transmission cabling, is lobbying for change and gives an example of similar wind farms, the northern Scottish one paying £5.54 to connect per megawatt hour, while a Welsh one receives £2.81 in subsidy. What about Net Zero targets?
Yahoo
17-03-2025
- Business
- Yahoo
Grangemouth: A new dawn for the home of UK's oldest oil refinery?
The history of Grangemouth has been built on fossil fuels – but now its future depends on its reinvention as Scotland's green energy industrial hub. The site, on the south bank of the Firth of Forth, is home to the UK's oldest oil refinery, which dates back to 1924. It is being closed down by owner Petroineos, with the loss of 400 of the 2,000 jobs which are based at the sprawling industrial complex. The UK government commissioned a report - known as Project Willow - into the options for the site, which is expected to be published in the coming days. It is likely to say that Grangemouth must switch to green energy to meet its vast need for power, and then use that to produce new sustainable products. PM announces £200m Grangemouth site support fund Closure of Scotland's only oil refinery confirmed What might the future hold for Grangemouth? The site already has many built-in benefits. The location couldn't be better. It sits on a sheltered port which already receives weekly shipments of shale gas from the US. Since output from the North Sea peaked in 1999, the supply of local gas has fallen dramatically and the replacement shale gas began arriving from Pennsylvania in 2016. Grangemouth is also central and incredibly well connected, with electricity pylons fanning out in all directions and underground pipelines linking it to the north east of Scotland and northern England. Some of those oil and gas pipelines are under-used and could be repurposed to carry greener fuels like hydrogen or exhaust gases for disposal. One just transition campaigner - who wants to ensure people and communities are treated fairly during the change away from fossil fuels - told me that if you were looking for the ideal place to set up these new green industries, you would choose Grangemouth. With the refinery closing, the main industry at the plant is now the production of chemicals like ethylene, polyethylene and polypropylene, which are components in the manufacture of plastics. These are then used for a whole range of applications, from making PPE to cabling, building materials and dyes. But this is incredibly energy-intensive, making Grangemouth the most polluting site in Scotland. The cluster of business there were responsible for 7.2% of Scotland's emissions in 2022, according to the Just Transmission Commission. Prioritising a carbon capture and storage scheme - called the Acorn Project - is seen as a vital step in reducing Grangemouth's carbon footprint. It would catch planet-warming gases before they enter the atmosphere, pipe them underground to St Fergus in Aberdeenshire and store them in depleted oil and gas wells under the North Sea. But the project missed out on the first round of UK government support and campaigners want a clear signal that it will be given full backing by ministers. One thing that is definitely going to be created at Grangemouth is a new import terminal to replace the closing refinery. That would mean the procession of tankers which deliver aviation fuel to Edinburgh Airport can be maintained. In the longer-term, a facility creating sustainable aviation fuel could use some of the skills of the existing workforce. It is on the political agenda. Since January, the UK government has mandated that 2% of UK jet fuel has to come from renewable sources - which means alternatives to fossil fuels. This will increase to 10% by the end of the decade. But there's been no commitment that Grangemouth will be the source of some of that fuel. The other potential options include a "biorefinery" which could use waste whisky and food in chemical production processes to reduce reliance on fossil fuels. Advanced recycling methods could also be developed which would produce high quality plastics able to be used in food packaging and health care. That would involve a process called "cracking" which breaks down the products into smaller molecules. It's a technique which is already carried out on fossil-fuel based chemicals at the Ineos site. Hydrogen will also play an increasingly important role in our economy over the coming decades as a clean energy, particularly in heavy transport and industry. Scotland's abundance of wind means generating green hydrogen from electricity has huge potential. Some hydrogen is already made at Grangemouth, and plans have previously been announced to significantly increase production by 2030. That hydrogen would then be used to displace gas to generate high temperatures in industrial processes. Grangemouth, however, does not currently have the right conditions to store hydrogen in significant quantities. Large underground salt caverns are ideal - but the nearest potential sites are in East Yorkshire and Cheshire. So either expensive storage units would have to be built above ground near Grangemouth, or the hydrogen would have to be piped hundreds of miles. The Project Willow report, when it's released, is expected to put figures to some of these propositions. It will cover the likely costs, the potential jobs and the value to the Scottish and UK economies. That will not be the end of the matter; in fact, it's barely the beginning. Attracting the public and private investment will be far more challenging than outlining the options. But talking about it early - and in a co-ordinated way - will surely maximise the chances of securing a long-term future for a site so intrinsically linked with fossil fuels.
Yahoo
17-03-2025
- Business
- Yahoo
Grangemouth: A new dawn for the home of UK's oldest oil refinery?
The history of Grangemouth has been built on fossil fuels – but now its future depends on its reinvention as Scotland's green energy industrial hub. The site, on the south bank of the Firth of Forth, is home to the UK's oldest oil refinery, which dates back to 1924. It is being closed down by owner Petroineos, with the loss of 400 of the 2,000 jobs which are based at the sprawling industrial complex. The UK government commissioned a report - known as Project Willow - into the options for the site, which is expected to be published in the coming days. It is likely to say that Grangemouth must switch to green energy to meet its vast need for power, and then use that to produce new sustainable products. PM announces £200m Grangemouth site support fund Closure of Scotland's only oil refinery confirmed What might the future hold for Grangemouth? The site already has many built-in benefits. The location couldn't be better. It sits on a sheltered port which already receives weekly shipments of shale gas from the US. Since output from the North Sea peaked in 1999, the supply of local gas has fallen dramatically and the replacement shale gas began arriving from Pennsylvania in 2016. Grangemouth is also central and incredibly well connected, with electricity pylons fanning out in all directions and underground pipelines linking it to the north east of Scotland and northern England. Some of those oil and gas pipelines are under-used and could be repurposed to carry greener fuels like hydrogen or exhaust gases for disposal. One just transition campaigner - who wants to ensure people and communities are treated fairly during the change away from fossil fuels - told me that if you were looking for the ideal place to set up these new green industries, you would choose Grangemouth. With the refinery closing, the main industry at the plant is now the production of chemicals like ethylene, polyethylene and polypropylene, which are components in the manufacture of plastics. These are then used for a whole range of applications, from making PPE to cabling, building materials and dyes. But this is incredibly energy-intensive, making Grangemouth the most polluting site in Scotland. The cluster of business there were responsible for 7.2% of Scotland's emissions in 2022, according to the Just Transmission Commission. Prioritising a carbon capture and storage scheme - called the Acorn Project - is seen as a vital step in reducing Grangemouth's carbon footprint. It would catch planet-warming gases before they enter the atmosphere, pipe them underground to St Fergus in Aberdeenshire and store them in depleted oil and gas wells under the North Sea. But the project missed out on the first round of UK government support and campaigners want a clear signal that it will be given full backing by ministers. One thing that is definitely going to be created at Grangemouth is a new import terminal to replace the closing refinery. That would mean the procession of tankers which deliver aviation fuel to Edinburgh Airport can be maintained. In the longer-term, a facility creating sustainable aviation fuel could use some of the skills of the existing workforce. It is on the political agenda. Since January, the UK government has mandated that 2% of UK jet fuel has to come from renewable sources - which means alternatives to fossil fuels. This will increase to 10% by the end of the decade. But there's been no commitment that Grangemouth will be the source of some of that fuel. The other potential options include a "biorefinery" which could use waste whisky and food in chemical production processes to reduce reliance on fossil fuels. Advanced recycling methods could also be developed which would produce high quality plastics able to be used in food packaging and health care. That would involve a process called "cracking" which breaks down the products into smaller molecules. It's a technique which is already carried out on fossil-fuel based chemicals at the Ineos site. Hydrogen will also play an increasingly important role in our economy over the coming decades as a clean energy, particularly in heavy transport and industry. Scotland's abundance of wind means generating green hydrogen from electricity has huge potential. Some hydrogen is already made at Grangemouth, and plans have previously been announced to significantly increase production by 2030. That hydrogen would then be used to displace gas to generate high temperatures in industrial processes. Grangemouth, however, does not currently have the right conditions to store hydrogen in significant quantities. Large underground salt caverns are ideal - but the nearest potential sites are in East Yorkshire and Cheshire. So either expensive storage units would have to be built above ground near Grangemouth, or the hydrogen would have to be piped hundreds of miles. The Project Willow report, when it's released, is expected to put figures to some of these propositions. It will cover the likely costs, the potential jobs and the value to the Scottish and UK economies. That will not be the end of the matter; in fact, it's barely the beginning. Attracting the public and private investment will be far more challenging than outlining the options. But talking about it early - and in a co-ordinated way - will surely maximise the chances of securing a long-term future for a site so intrinsically linked with fossil fuels.
