04/12/2013 Newsnight Scotland

it had an open case an EMF and was monitoring the situation. We invited

the Lord unto the programme to respond. Guess what estimate he

declined. Guess what? He declined. Good

evening. With the match across the countryside be brought to a halt or

is it more attacking an green commitment? What is the future for

Grangemouth? The basic message from the British government today was

pretty simple. If you build a wind farm offshore, you'll get more

subsidy. If you build one onshore, you'll get less. Cynics suggest the

new policy appeals to some Tory backbenchers in England and some

campaigners in the Highlands who oppose wind turbines. We'll discuss

whether there's more to it in a moment.

Wind farms at the energy equivalent of Marmite. You either love them or

hate them but your thoughts, for the past ten years the Government at

Westminster and Edinburgh have pushed this source of renewable

energy. This wind turbine is for educational purposes at the science

centre before it is smaller than those you see an a wind farm put up

you get a pretty good idea of how it works. The Government signalled a

shift away from wind farms built on land to offshore. At the Treasury,

there was a gear change. It is about getting the best value for money as

well as making sure offshore has a huge potential to meeting our energy

needs and that it has the support. The price is changing. That is the

amount of money paid for each megawatt sold. From 2015, the place

for onshore wind power will be cut. The offshore wind energy, it will

rise. And offshore wind project was scrapped recently near Bristol. If I

had been in the same position, I would have come up with something

similar. On shore wind is now a mature technology. It has come down

in cost. If we were comparing an a fair basis, C natural gas or call

with carbon storage, onshore wind is at about the same price as nuclear.

But this mean for the industry in Scotland? Hopefully it means more

offshore development in Scotland and it takes as forward to the day and

renewables compete on cost with other forms of energy. The Scottish

government have concerns too. The UK government has ignored its own

research which painted out to the islands to have their own specific

bespoke measurable top we are concerned with developers and the

council leaders in the islands who are telling us the future of

renewables in the islands may be placed in jeopardy. Renewable energy

makes up just under 10% of electricity output in the UK. It is

much higher in Scotland, at 27%. In the next seven years, the UK target

will rise to the tipster. In Scotland, a challenging 100%. We are

about halfway to where the target at have renewable output by 2020. The

trouble with that is about half of that output we have had for 50 years

in terms of Hydro put up all of the things we have seen with wind and

are now has basically doubled the old renewables we had forever. We

now have to have doubled the amount of all the renewables which we

currently have got within seven years. The Scottish government said

a noble energy development should continue in as many areas as

possible providing project are suitably located was that they

insist there will be no new onshore wind turbines in special scenic

areas. I'm joined now from Edinburgh by

Neil Stuart, Chief Executive of Scottish Renewables, the industry

body. And in Oxford, the climate and energy expert Chris Goodall. You had

a bit more time to digest this. What are the implications for onshore

wind which is pretty enormous in Scotland? What this announcement is

is a challenge for the onshore and offshore industries. The Government

has said really it will only support the industry if it can deliver more

reductions in price. When we hear that onshore is becoming more

commercially viable, but a lot of people watching this will say is we

are paying for this through our electricity bills. It was

commercially viable, why is it that even the lower stripe place today

for onshore wind developments is something like twice the wholesale

price of electricity generated by gas or coal? But nobody is saying is

that onshore wind can compete with gas or coal alone on cost was up

today, we are seeing the cost will come down over this decade.

Forecasts for gas generation will go up. What we are seeing is that

onshore wind will become competitive. It is already cheaper

than the cost agreed for nuclear power. But about offshore Chris Mac

-- offshore wind farms? Is there any prospect of that becoming

commercially viable? It is a bigger challenge. Offshore wind has many

advantages over other renewables. It is an early technology. It is about

30 years to find onshore wind in development. The ambition for all

the technologies is to develop. But this announcement does is slow down

the rate at which government kept subsidy for onshore wind. Chris

Goodall, you have a different take on this. You think hidden in this

the Government is backtracking on its commitment to offshore wind Mr

Mark? And are laying this is the sense in the UK government mind that

offshore wind is very expensive and the progress we were promised ten

years ago has not happened. As a result, they are beginning to have

nerves about it. There is a sense in the nonsense today that offshore

wind is a disappointment and may need a bit more subsidy. The changes

are tiny and should not be exaggerated. One interesting thing

is that we always hear about offshore wind as the industry of the

future. That is not really anything in Scotland? That is a large

offshore wind industry in England which we hear nothing about.

Somehow, we have been given the impression the opposite is the case.

In Scottish terms, it is an industry of the future. We have a whole

series of firsts in terms of the development of the technology. Why

is it that is a large operating industry in England and the art,

nothing in Scotland. -- and as yet, nothing in Scotland? We have deeper

waters and stronger tides. The technology is not ready. But

Scotland does have is a key role in the development of the technology in

developing larger turbines. We will have the two largest turbines

anywhere in the world this time next year. We will be advising

governments all over the world on this. It will be much more

appropriate for deploying around our coastline and it will be more

productive. From an economic point of view, it is also where Scotland

has the experience of working offshore. That skill and accidents

will come into its own, not just in the UK but around the world. Chris

Goodall, I saw you nodding there. It may be that Scotland has an

advantage with larger turbines. England does seem to have an

established leader in this industry. The conditions are much easier in

the Thames estuary. The wind speeds are lower and the wave heights are

lower. It is closer to the shore and most importantly, it is not very

deep. Around Scotland, you might -- you have a situation which is much

more difficult. There are incredible to difficult challenges. We have not

seen evidence of the cost reductions which have been promised over the

last decade. That worries me. It is not just offshore but at Agu Blake.

Onshore wind turbine. When you give your predictions earlier, they

mainly relied on projections that the price of gas would go up and not

that they place of onshore would go down. Subsidies to onshore wind have

been cut by 10%. The announcement today probably equals another cat in

subsidy. The big challenge at this announcement is that we are unlikely

to see the volume of offshore wind turbines that we were expecting. We

got the industry would be much larger before. We expected the cost

reductions to be larger and quicker. I do not think any body is saying

there have not been cost reductions. Quite simply, if the

industry does not get the cost per megawatt hour down, we will not have

an offshore industry but up that is the challenge we face. The big

picture behind all of this is if you are an investor at the moment,

considering investing in renewable energy of any kind, do you really

have any certainty given that we change the prices and it is still

not clear whether the new nuclear stations will be built M a lotta

people must be thinking I am not prepared to my money into this.

Yes, right across the board, there is a sense of nervousness.

Government doesn't seem to know what to do and every announcement says

something different from the last. This isn't much different. The

proposals introduced today aren't much different from the ones they

were talking about in the middle of the year. Nevertheless, they are

rolling back all the targets. If I were Minister, I would think this

was the first of many changes. I assume they're feeling is shared in

the industry? Presumably the industry would like to know what the

regime is going to be. I have to disagree with Chris. Despite all the

political Macca nations in Westminster, audit of green levies,

never has the governor said it will come away from its target. --

machinations. The industry knows the off on the table in terms of the

contracts available. We know what we have to do in terms of producing

energy and the cost of producing energy. There have been exemptions

for things like gas stations. That must affect people in your

industry. Yes, but the target has always been for the UK to achieve

50% of its energy from renewables from 2020. We're going to need more

gas fire power stations. That is a fact. It is not a threat to

renewables. We have to leave it there. Thank you both very much.

Now, back in October it looked like the petrochemical plant at

Grangemouth would close, at the cost of hundreds of jobs. Two months on,

the future of the site could now be secure for at least a couple of

decades. Ineos, who run the plant, want Grangemouth to be the first

site in the UK to import shale gas from America as its chemical

feedstock, cutting costs and getting the plant back up and running at a

profit. The trade union Unite has misgivings about other parts of the

company's survival plan. But as Ineos gears up to import cheap gas

into Scotland, it showed journalists how it's already doing that in

Norway. Catriona Renton was there. Here in the south of Norway, they

are putting in place the infrastructure to buy in shale gas

from the United States. The reason? Even after shipping, it's much

cheaper. Less than half the price of the gas they are currently buying

from the North Sea. We import US shale gas to secure the future of

this site. It will make sure the site has a long life. Once up and

running, this tank will store 17,000 tonnes of liquefied gas, which will

be used to make plastics just like the petrochemical plant at

Grangemouth. Both sites are run by the same company, INEOS. But this

site is profitable and its owners believe it will become more so. This

is what Grangemouth can expect. I am right on top of the first tank in

Europe to bring in shale gas from the United States. It is an

impressive sight, 37 metres up. But the one in Grangemouth is going to

have twice the capacity. In October, the chemical plant at Grangemouth

was brought to its knees. According to INEOS, it is losing ?150 million

per year. It was due to close at the cost of 800 jobs. Following a bitter

dispute between the company and the Unite union. But staff accepted new

terms and conditions. Now INEOS say they will invest in its future. Once

we have this tank built, on the back of that and a parallel today, we are

negotiating long-term contract is -- contracts through the tank. They

will be 15-20 years. We are committed to taking the gas and

running the assets. It is a long-term, sustainable future that

we have secured by making investment. This is what over 1000

degrees looks like. It is a giant plan in Grangemouth. It takes in dry

gas from the North Sea. It heats it up to 1100 Celsius and then what

comes out of that our precious substances that we see in everyday

items like the plastic in milk bottles and robbers. But INEOS says

the cracker is only working and 50% as less gas is coming down the bad

line. Inputs -- shale gas would have it working full tilt. The project at

Grangemouth depends on loan guarantee of ?125 million from the

UK government and the grant of 9 million from the Scottish

Government. Management do plan to close down some their less

profitable assets by the middle of 2015. They say they will close the

old cracker and other assets. The company has the most will be

redeployed and there would be a maximum of 50 redundancies. -- the

company says most staff will be redeployed. Where you once had four

or five plants that were functioning and people employed in them, they

won't be there. The jobs will not be there. You can redeployed come you

can move people around the sites and fill gaps and hopefully that is

achieved. But the jobs that for once there are no longer there. -- that

were once there. Clearly there are still tensions between both sides at

Grangemouth. In Norway, by law, unions are represented on the boards

of companies. Perhaps there's to learn between INEOS and the union

here. There are social things we want to have here, and it is not

every time we get what we want. But we tried to talk together, find a

compromise that the workers can live with and the company can live with.

That is the main thing to try to secure. INEOS has seen out it works

in Norway, so both parties here sit try to -- should China to trust each

other. The future seems bright in Norway, and if the investment goes

ahead, maybe it will be in Grangemouth, too.

In case you are not aware, gale force winds are forecast overnight

and it is already affecting transport.

ScotRail has decided not to run trains on at least 20 routes

tomorrow as a precaution, because of forecast high winds. On remaining

routes, no trains will run until seven in the morning and all lines

will be subject to a 40mph speed restriction, imposed by Network

Rail. Main lines are among those affected. You can check the details

online. Now a quick look at tomorrow's front

pages. A picture of Nigella Lawson. The main story, NHS is running close

to breaking point, it says. The financial Times talks about

tomorrow's Autumn Statement. And in the Guardian... Nigella Lawson again

and state pension not until you are 70, says Osborne.

That's all from me. More news is always on BBC Scotland's website,

and Good Morning Scotland is on Radio Scotland tomorrow morning at

six o'clock. Good night. Good evening. A winter storm heading

our way overnight. It will be atrocious in Scotland through the

morning. Some heavy rain to go with the wind. His strongest winds come

down the North Sea coast into the afternoon. Northern Ireland see

changeable conditions through the