Dirty energy plan shows why Scottish Enterprise should be abolished

As far as inexplicable sentences go, “nation with cheap renewable energy surplus chooses to build dirty energy plant that burns petrochemical which nation has to import locking nation into long-term reliance on expensive and volatile energy source” must rank highly.

Scottish Enterprise has given tens of millions of pounds of public money to two corporations, one entirely foreign-owned, for a proposal to build a gas-fired power station in Peterhead. There are many reasons to question this decision.

It is to be challenged in court by Friends of the Earth on the basis that the proposal is based on clear dishonesty and that it is legally incompatible with the Scottish Government's climate responsibility. The dishonesty comes from the fact that it is being described as a 'low carbon' development, but that the estimated emissions initially put forward to sustain that argument were wrong.

Burning fossil fuels can never be 'low carbon', but can be sold as 'low carbon emissions into the atmosphere' if the high carbon emissions the plant produces can somehow be captured. For nearly a decade, Common Weal has been producing evidence that the process proposed – Carbon Capture and Storage (CCS) – does not work and has been regularly shown to fail.

In fact the evidence on the failure of CCS is pretty overwhelming. The reality is that no-one with any technical knowledge really believes in CCS. A meta analysis carried out by the Institute for Energy Economics and Financial Analysis looked at 13 major plants which account for 55 per cent of all the CCS in the world.

It found that three failed completely and seven failed substantially. The examples that didn't fail were small and specialist. If politicians are being told CCS is a sensible bet they are being lied to. The proposers of this power plant claimed initially it's lifetime emissions would be 6.3m tonnes of carbon dioxide (equivalent) but it is now more accurately estimated to be 17.1m tonnes – a three-fold increase.

Expect that to rise further, and that is only at the capture stage. There is very little evidence on the effectiveness of the long-term storage of the captured CO2. This plant will almost certainly fail to deliver numbers that could even optimistically be considered 'low carbon'.

But in some ways this is not the biggest issue. The UK is not self-sufficient in natural gas. In fact the North Sea only produces about a third of the gas we use, and production has been in rapid decline for a decade. Over the last 25 years there has been a 65 per cent reduction in the volume of natural gas produced and this trend continues apace.

Which means Scotland would be locking itself into a very real risk of supply dependencey long before this plant is decommissioned. This is an inexplicable move given that gas is now the most expensive form of electricity other than nuclear (and actually keeps peaking far above the cost of nuclear every time there is a global crisis).

Scotland is paying tens of millions of pounds of public money to undermine our own energy independence by locking us into decades of reliance on an expensive and volatile fuel and undermining our own climate goals - when we have plentiful clean, domestically secure renewable alternatives.

So why would a public agency do this? The argument is that this will support the North Sea oil and gas industry, but that is hard to stack up. There is clearly absolutely no lack of demand issue for natural gas in Europe just now – quite the opposite. The UK alone has three times the demand for gas than we produce. The issues in the North Sea are about cost of production, global priorities of oil corporations and the climate question, not lack of market.

We do not need to create new demand for natural gas, so why are we doing this? The answer is that Scottish Enterprise is not a public agency operating in the public interest and on the whole it is not even a public agency adequately supporting Scottish businesses. It is best thought of like the Scottish National Investment Bank – it is a slush fund for corporations and equity investors.

Scottish Enterprise works mainly for the financial services sector and large foreign corporate players, de-risking their investments and boosting their wealth at the expense of the Scottish economy. The term it uses for this is 'inward investment'. Well it is extremely difficult to find a justification for why the very wealthy get their own agency lavishing tens of millions of pounds on projects which benefit only them.

Scottish Enterprise should have been abolished a long time ago. It's performance in supporting productive enterprise in Scotland is clearly woeful, yet somehow it manages to redirect very large sums of money towards financiers and foreign corporations with very little benefit to the real Scottish economy.

Common Weal has set out a detailed proposal for a proper business support infrastructure in Scotland and for a change-focussed approach to our economic development via an industrial strategy. This week alone four large Scottish businesses have failed. It is time Scottish Enterprise was held to account.