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Scottish Energy Study Volume 5: Energy and Carbon Dioxide Projections for Scotland

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4. Energy Supply

The main energy supply activities in Scotland are electricity generation and oil refining. These activities are considered separately with an additional section to cover all primary energy consumption.

4.1. Electricity Generation

Scotland has power stations that are fuelled with coal (Longannet and Cockenzie), oil and/or gas (Peterhead), nuclear energy (Hunterston and Torness), hydro-electricity and other renewable energy resources including wind, biomass and smaller hydro. Additionally autogenerators (mainly CHP) use a mix of fossil fuels to produce electricity some of which is sold to the public electricity suppliers.

Baseline data for power generation and supply from both the major generators and autogenerators have been gathered in the Scottish Energy Study - Volume 1 and the values are reproduced in Table 13. This gives the total amount of electricity supplied through the public transmission and distribution system, after deduction of own use by generators and transmission/distribution system losses, as 43.3 TWh in 2002. This exceeds total Scottish demand, and the surplus is exported to Northern Ireland and England.

The Scottish Energy Study - Volume 1 estimated total electricity exports in 2002 to be about 8 TWh. When this is added to the Scottish Energy Study's "bottom up" estimate of Scottish electricity demand the total is 42.2 TWh, less than the estimated total supply by about 1 TWh. The reasons for this difference between the "bottom up" estimate of demand and the "top down" estimate of supply have been discussed in detail in Chapter 1 of the Energy Study, and reported as a statistical difference. For the purposes of these projections this statistical difference was removed by adjusting the level of electricity exports to balance Scottish demand (including losses) with Scottish supply. This has no effect on the projections of primary energy and CO 2 emissions, but ensures that energy supply and demand are balanced numerically to 2020.

Table 13 also gives estimates for future generation by fuel type to 2020. The values for generation by large fossil fuel, hydro and nuclear plant in 2005 are taken from statistics published by BERR48, while for later years they come from BERR's projections for the UK49. Projections for generation from renewable energy sources are based on the assumption that Scotland achieves its targets to generate 31% of Scottish gross consumption from renewable sources by 2011, rising to 50% by 2020 50.

The values for centralised generation from fossil and nuclear plant are reported by the generators and in BERR's projections on a "sent out" basis ( i.e. after deduction of own use). For consistency with other parts of the Scottish Energy Study these values were adjusted to estimate gross generation in Table 13 assuming losses and "own use" remains as a fixed percentage of gross generation.

Table 13 Electricity generation and demand in Scotland to 2020 ( GWh)

CC Scenario

2002

2005

2010

2015

2020

Coal

14,776

12,092

11,354

5,874

4,217

Oil

186

556

556

556

556

Natural Gas

8,847

6,250

3,777

5,931

10,509

Nuclear

15,863

18,681

17,919

17,919

9,128

Large Hydro

3,693

3,626

3,626

3,626

3,626

Pumped Hydro

622

643

643

643

643

Renewables

1,405

2,881

8,114

12,614

17,115

Other generators

4,227

4,518

4,518

4,518

4,518

Total Generation

49,619

49,247

50,506

51,681

50,312

Losses and own use

6,340

6,179

6,514

6,484

6,377

Total Supply

43,279

43,068

43,992

45,197

43,935

Demand

34,262

35,533

34,618

34,443

35,099

Exports

9,017

7,535

9,374

10,753

8,836

Total Demand

43,279

43,068

43,992

45,197

43,935

Gross consumption

40,602

41,712

41,219

40,928

41,476

RE % of Scottish gross consumption

13%

16%

28%

40%

50%

ScenarioHC

2002

2005

2010

2015

2020

Coal

14,776

12,092

12,439

8,067

7,734

Oil

186

556

556

556

556

Natural Gas

8,847

6,251

3,777

5,931

10,509

Nuclear

15,863

18,681

17,919

17,919

9,128

Large Hydro

3,693

3,626

3,626

3,626

3,626

Pumped Hydro

622

643

643

643

643

Renewables

1,405

2,881

8,189

12,909

17,630

Other generators

4,227

4,518

4,518

4,518

4,518

Total Generation

49,619

49,248

51,666

54,169

54,343

Losses and own use

6,340

6,179

6,656

6,796

6,888

Total Supply

43,279

43,069

45,010

47,373

47,455

Demand

34,262

35,533

34,760

34,699

35,615

Exports

9,017

7,536

10,251

12,673

11,840

Total Demand

43,279

43,069

45,010

47,373

47,455

Gross consumption

40,602

41,712

41,416

41,496

42,503

RE % of Scottish gross consumption

13%

16%

29%

40%

50%

Note rounding to one decimal place may introduce some small errors in summations.

Figure 9 Electricity generation by fuel type in Scotland to 2020 ( GWh) 51

Figure 9 Electricity generation by fuel type in Scotland to 2020 (GWh)

Overall electricity generation increases by 2% and 10% between 2005 and 2020 for the CC and HC scenarios. This matches the overall trend for the UK in which total electricity supply was 7% higher in the HC scenario compared to the CC scenario in 2020. In Scotland electricity demand is roughly level in both the CC and HC scenarios, which might be taken to imply that the difference in generation should also be less between the scenarios. However, this need not be the case because power plant in Scotland are operating within the UK electricity market.

Coal fired generation is anticipated to continue through the projection period following the decision by Scottish Power to fit flue gas desulphurisation ( FGD) equipment to Longannet in order to meet the requirements of the EU's Large Combustion Plant Directive, but nuclear generation is expected to decline with the possible closure of Hunterston after 2016 (Figure 9) 52. Natural gas generation continues at Peterhead power station, and some additional capacity is added by 2015. This addition of new gas generation may seem at odds with Scotland's surplus in electricity supply, but is not unreasonable for the following reasons:

  • New gas generation in Scotland is a small fraction of the total for the UK (~6%-8%).
  • Scotland is likely to need some additional fossil fuel capacity to back up the considerable expansion of intermittent renewable generation sources.
  • Scotland's two major generation companies should be expected to maintain some fossil power capacity in Scotland.

The main difference between the CC and HC scenarios is an increase in coal generation with the higher fuel prices in the HC scenario. This is because in BERR's assumptions the relative cost of gas to coal is higher in the HC scenario, while the assumed prices for emission allowances in the ETS are the same in both scenarios at €20/tCO 2 from 2010-2015 and €25/tCO 2 from 2015 to 2020. Gas generation might have been expected to decline in the HC scenario to counter the increased coal generation. This does not occur in Scotland because the BERR model considers electricity generation for the UK overall. The increased coal fired generation is balanced by reduced gas fired generation in England and Wales rather than Scotland.

Projections of the future mix of fuels used for power generation are particularly sensitive to assumptions on the relative prices of coal, natural gas and oil, the price of ETS allowances and to assumptions on future investment. For example the Peterhead power station may use either gas or oil depending on their relative prices. Similarly Scottish Power is considering options for replacement thermal generation at Longannet and Cockenzie 53. These factors are investigated as part of the sensitivity analysis reported in Section 6.

Scotland remains a net exporter of electricity over the full period to 2020 in both the CC and HC scenarios.

4.2. Oil Refining

Scotland has one major oil refinery at Grangemouth. The Scottish Energy Study - Volume 1 has estimated that in 2002 this produced 99.6 TWh of saleable products, of which 61% was consumed in Scotland, and emitted 2.8Mt of CO 2. BERR's projections for the UK assume a small increase in refinery activity over the projection period with CO 2 emissions increasing from 5.7 MtC/yr (20.8 MtCO 2/yr) in 2002 to 6.1MtC/yr (23.4 MtCO 2/yr) by 2020. This trend was the same for the CC and HC scenarios, and it has been assumed here that the same trend will be followed in Scotland.

4.3. Primary Energy Consumption

Table 14 and Figure 9 draw together direct energy use and indirect energy use in conversion processes to give projections of Scotland's total primary energy consumption. Total primary energy consumption declines by 10% in the CC scenario and by 8% in the HC scenario. This should be compared to falls of 6% and 3% respectively for the UK.

The greater fall in Scottish primary energy consumption in the CC scenario compared to the HC scenario is due to a number of factors:

  • Firstly there is more electricity generation from Scotland's coal fired power plant in the HC scenario because the relative price of gas to coal is greater in the HC scenario. Compared to the UK as a whole, Scotland has less gas fired generation capacity, and consequently the increase in coal generation is not offset by an equivalent reduction in gas.
  • Secondly, Scottish gross electricity consumption is higher in the HC scenario 54, and as a consequence Scotland is assumed to increase its power generation from renewable sources to meet its RE targets, which adds to primary energy. In contrast to this overall trend there is a greater reduction in demand for gas by final users in the HC scenario compared to the CC scenario.

Table 14 Total Primary Energy consumption ( TWh)55

ScenarioCC

2002

2005

2010

2015

2020

Change 2005 - 2020 56

Coal

44.1

35.4

33.0

17.8

13.1

-63%

Natural Gas

84.3

78.6

67.3

69.6

74.7

-5%

Oil

72.2

70.9

71.2

74.9

75.1

+6%

Nuclear

42.2

49.7

47.7

47.7

24.3

-51%

RE

7.7

9.6

20.6

26.2

32.9

+241%

Total

250.5

244.2

239.8

236.2

220.1

-10%

ScenarioHC

2002

2005

2010

2015

2020

Change 2005 - 2020

Coal

44.1

35.4

35.9

23.7

22.6

-36%

Natural Gas

84.3

78.6

66.2

67.2

72.1

-8%

Oil

72.2

70.9

70.6

73.4

73.1

+3%

Nuclear

42.2

49.7

47.7

47.7

24.3

-51%

RE

7.7

9.6

20.7

26.6

33.6

+248%

Total

250.5

244.2

241.1

238.6

225.7

-8%

Note rounding to one decimal place may introduce some small errors in summations.

Figure 10 Scottish total Primary Energy consumption for the CC scenario ( TWh)

Figure 10 Scottish total Primary Energy consumption for the CC scenario (TWh)