19/10/2011 Newsnight Scotland

misjudgment. Thank you. Tonight on Newsnight Scotland. The widely

expected decision to scrap the Longannet carbon capture project is

confirmed. Where does this leave lofty claims of world leading

technologies and big ambitions to stop pumping so much carbon into

the atmosphere? And have we fallen out of love with

organic? A special report into an industry struggling as households

deal with rising living costs. Good evening. The �1 billion

available to develop carbon capture technology is still there insists

the United Kingdom government. But there is little doubt that the

decision to scrap the flagship project at Longannet Power Station

is a serious and significant blow to delivering on that technology.

Much of what is planned for future energy generation that isn't either

nuclear or renewable power is largely predicated on making the

technology work. And as things stand, that seems as far away now

as ever. Laura Bicker spent the day This power station used to be

Scotland's biggest polluter. For the last three years, it has been a

front-runner in the race for green energy, until today. A deal between

the Government and Scottish Power broke down. It led to this question

to the Prime Minister. Given the importance of carbon capture and

storage, as well as helping to reduce carbon emissions and as an

exportable technology to rebalance the economy, will the Prime

Minister put his words into action and step into insurer that the

Longannet demonstration project goes ahead? The funding we sat is

out for carbon capture and storage is still there and will be made

available. Clearly, the scheme is not running the way they intended,

but the Government money, the support to this vital technology is

there. This is the Veerie on carbon capture. Cole is central power

station where it is burnt to create energy. The staging captures the

carbon-dioxide uncensored to an offshore pipeline where it is

pumped below the sea into a gas or oil field. Some rockets added to

stop the carbon-dioxide heading back into the atmosphere. I have

great pleasure in switching on the mobile test unit. The technology

was tested on a small scale at Longannet but they hoped for bigger

things. But the stumbling block was money. It came down to the fact

that there were specifics about the Longannet plant, its location, how

far away it is from the reserve fors where we were storing the

carbon, and it made it difficult to added up. The Government set to say

to �1 billion, but Scottish Power needed more. -- set aside. They

needed about half a billion, but the Treasury was not convinced.

were very disappointed. We are immensely proud in bringing the

first of a kind projects to be detail that we have, but we are

very disappointed that the project cannot go ahead here. Scottish

Power spent �10 million and had 350 staff working on carbon capture

storage year at Longannet. That information has now been shared

with energy companies across the UK. But we understand that Scotland may

still lead the way in this technology, and the name in the

frame is that Peter head. That has not stopped a blame game, a chance

to point the finger and ask what went wrong? I have written to Chris

Huhne and I am sure the Scottish government would do the same. We

have to fight for this one, it is not something we can let go easily.

It is the huge economic opportunity for us, and just because it isn't

on the London radar, that doesn't mean it shouldn't be in Scotland.

There is an international race under way to deliver this project,

and the commercial benefits for the country becomes first could be huge.

The loser could be left to beg, borrow and by the technology. With

the loss of the Longannet contract, the UK has dropped the green baton.

Who will now pick it up? The Scottish government minister

for finance and sustainable development John Swinney joined the

earlier and I asked him about his reaction for this decision? It is

one of profound disappointment on this decision that the UK

government has taken. There has been a tremendous amount of effort

and intellect and research invested in developing this proposal in

Longannet was far as it has come. Forehead to come this far and for

it not to be taken to the next stage of development and to put us

in a position where we could properly realise the advantages and

the strength of what is literally a world-leading technological

opportunity for Scotland, this is a profound disappointment for the

Scottish government. What is the problem, is it simply that the �1.3

billion estimate that Scottish Power has, that the Government will

not pay that much, is that simple? It probably is that simple, but

essentially, as Scottish Power and its consortium colleagues went

through the process of developing this proposal that has been done

very much in consult with the Department of Energy and climate

change, they have essentially come to the conclusion that the cost

will be higher than the �1 billion that the Government has been

prepared to allocate. What is disappointing about that is the

fact that the work that has gone in involving the consortium has been

very beneficial work. It has given us some real advantages in taking

forward this technology. Bearing in mind the scale of the contribution

for example of the North Sea oil revenues to the UK Treasury, it is

a shame that the UK government has not used a small proportion of this

to take the project to the next stage. The official explanation

about the pipelines, you do not take that seriously? I do not think

that is a compelling argument, because if that was the case, that

would undermine some of the reasons that we have had advanced for the

arguments against Peter Head to be used. I do not think that is as

substantial argument. Essentially it is about the cost, and the cost

factor is are being influenced by the electricity markets and the

reform the UK government is presiding over which is creating

substantial uncertainty about the future financial support that would

be available for carbon capture technology. As a consequence, that

makes Investment from Scottish Power more difficult to take in

context. Is there anything you want to do or can do as a government,

apart from expressing general support for this project?

Presumably, you do not have the kind of money to step in and

replace the British government even if you had the power to do that.

Over the years, the power. Is a material., and that is why the

leadership in this issue has rested with this government. -- the power

point is a material point, and that is why the leadership in this issue

has rested with the Government. There is nothing more you can to?

We stand ready to do whatever we can do to assist in taking the

project for it. Obviously, Chris Huhne has opened up the prospect of

a further opportunity at Peter Head, which is welcome, but he Joerg Head

was that he let down by the Labour government. -- Peter Head. We need

to look at this opportunity now. We need to take some practical steps

in the research field and in Royal Scottish Enterprise and in the

Scottish Green Energy Centre to try and marshal the argument to get

some of the support for research into carbon capture and storage

technology to be taken forward. We had been very practical in this

work and will do that again. Presumably, given the development

of this technology is on hold, he will now blocked the planning

application to build at call far power-station, because that was

predicated on using this technology. -- ate cold fire power stations.

There is a planning application ahead, and it would be

inappropriate for me to make any comment on this, and I am not

saying this to avoid the question, I simply have to have due regard to

my responsibilities in the Scottish government not to make specific

comment about that proposal. Thank you. We have to leave it there.

Following today's announcement by the energy secretary, we invited

them or any other department minister to appear tonight, but

they were not available. We asked for any representative of the UK

government, but again, nobody was available. We have a professor of

carbon capture and storage from the University of Edinburgh with us now.

Wide you think this project has collapsed? Is it simply the money?

It is simply down to the money, and I am glad to be available to try

and explain this, because we know from the documentation that is now

available, but technically, this project stacks up and the storage

site works and the capture plant would work. And the issue about the

pipeline being too long is rubbish, it is an advantage, it is a

positive to use an existing pipeline. The problem is, this has

been very slow and complicated. It has gone through three prime

ministers, Tony Blair, Gordon Brown and now David Cameron, all of whom

claim to be enthusiastic about carbon capture and storage, none of

whom has been able to deliver it. It has been very complicated and

subject to lots of time and unfair Treasury rules and the Government

has consistently refused to take on board much of the brisk and the

problems on how much liability people will take is the key issue.

It is not just the amount of government subsidy, or where is the

risk if the Government is effectively going to pay for it?

There is a lot of talk about how much it would cost in the last few

days. We know how much it would cost now because we can read the

documentation. The figures in there are pretty clear. The project would

cost �1,050 million, so about a big sum of money on the table. The

Treasury adds another �300 million, because it says you might go over

budget. And it adds another 15 % on top of that, because it says we do

not believe you have cut your costs accurate, so if I can illustrate

that domestically, I want to make my has more energy efficient, so

why have cut �1,000, I will put that on the table. -- I want to

make my house. The Government says we want another �500 in case it

goes wrong. We do not think she will spend at �500, but that is

what we will call it. I thought you were going to produce a top hat and

a Brad! It is not actually 1 billion that is on offer, it has to

comment at �600 million. Unless the Government stops this risk-sharing

approach, it will never deliver anything. What about the prospect

for Peter Head. John Swinney referred to that. The of the his

point on this is, it is a gas plant. Two were three things about Peter

Head, there have been �40 million spent on the work for Longannet on

the pipeline and the storage site. Peter Head which shares some of the

pipeline and share some of the exact storage site, so it makes it

cheaper and more readily available. Peter Kate is a shorter Connection

distance and can capture simply because it is cleaner gas going up

the chimney. The significance of gas for the future is that right

now, week after week, about half of the electricity in the UK has

generated from burning gas, so if we look to the future, we have to

realise that gas is cleaner than coal, but is still a dirty fuel.

Having a gas project on offer at the moment in Europe... If you

develop carbon capture that works, have you by doing that, developed

technology that would work in a The UK will move away from coal.

That call be taxed by carbon dioxide emissions. In means that

all coal-fired plants become uneconomic. They will close by 2022.

That will leave a giant hole in the UK electricity production. You can

answer this question. You're not a minister. Does it make any sense

for this plan to go ahead? It is a live planning application. It makes

it very difficult to understand how the economics or work. -- the

economics will work, if the Longannet plan does not work. They

rose tax on a three-quarters of the plant, as well as the CCS. A if we

do not have the CCS, we will not have that. That will have to be

funded somehow. We have to gamble that the other three-quarters will

get cleaned up some time in the future. Briefly, is this big enough

to put at risk the UK and Scottish governments reduction targets?

short answer is yes. The Treasury it is fixated on a short-term fix.

If they do not want to burn down forests, that's why they are paying

over the odds for wind power. Carbon capture can deliver the same

benefits at the same cost. We need to get to the 2030 reduction

targets. Thank you very much indeed. Organic food was flavour of the

month during the boom years when we had plenty of disposable income.

Since the recession the market has shrunk by 30%. Farmers have felt

the pinch by dropping their organic status. Take up organic -- take up

for organic grants is in trouble. They are poor 8.8 million carats

from this field every year. -- Paul. From planting to packing, they go

through a rigorous process to insure their organics -- their

organic status. My mother told me carrots are good for your eyes,

they have not done much for me, I'm very interested in them in this

cake. All this organic bakery in Glasgow, it is a battle to stay

organic. It is not to be red tape, it is getting their hands on the

ingredients. Organic butter is a real problem. Getting Scottish

butter. The availability is erratic. We have had to substituted with

Welsh butter we are losing 10% of the organic produce in Scotland

every year. Karen -- currently only 4% of the land here is organic.

When we started, they wanted 20% of the total land been organic. We are

way way off that. My worries, you get below a certain critical mass

organic products. For the Scottish government, spurred -- supporting

organic produce is was high on their agenda. Only after the Budget

was available was organic produce awarded budgets also awarded.

are entering a worrying time for organic produce. The government

needs is that up -- need to step up, and support the organic land. They

need to invest in my organic production. It would be a shame to

see previous investments squandered by me coming out. Some organic

farmers are having to rethink their business models. Prior to 2008, the

whole business was organic. When the recession hit, the demand fell,

we lost one of our contracts. We move the pigs over to conventional

production. There is environmentally friendly Common

Agricultural -- Common Agricultural Policy. Climate change are the key

things they are looking at, they think that organic farming will

deliver that. There are good messages coming out of the European

Union despite government support, there is still a perception that

organic produce is too expensive. That comes at a time when food

bills are on the rise. They have dropped by 90%. There is a strong

perception that it is too expensive. That is not the case. There has

been so much food inflation in the non-organic sector, it is sometimes

cheaper. As a society, we are spending more money on supermarkets

than local producers. You get what you pay for. We need a healthy

society. Local suppliers, local producers. Is the organic produce a

luxury that people cannot afford? Producers say it is not just about

a growing food, is about protecting the environment. To do this they

needs with the support from the Scottish government. -- with the

support. A look at the back pages, North to

South divide. Lifespan gaps are widening. Still better than England.

widening. Still better than England. The Scottish Daily Mail, a crisis