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The task of decarbonising Scotland’s energy is straightforward. Heating will be considered below and the rest of it is electricity in some form or another. That includes the energy we need for transport – whether that is battery-electric cars or Green Hydrogen-powered ferries, given that Green Hydrogen is produced with renewable electricity. If we model Scotland’s demand into the future, taking into account increased population, increased demand from our lifestyles, the need to produce extra electricity to store for periods when renewable generation is low, and to shift all transport away from carbon-producing fuels, we need to increase our total production to about three times the amount that existed pre-pandemic. On that basis Scotland and absolutely all its domestic needs would be more than met and the country would be totally energy independent.

That demand can be met using only Scotland’s onshore and offshore wind resources with no need for any other form of electricity generation. But there is a condition – we must also invest in energy storage. The intermittent nature of renewable energy and the fact that it produces a lot of energy at times with low demand (like overnight) means that an efficient, reliable energy system must include substantial energy storage.

There are three kinds of energy storage we need in Scotland. The first is on very short timescales, up to several seconds. Traditionally, this has been handled by ‘mechanical inertia’ where the very large turbines such as in coal and gas power plants take some time to spin down and stop when they are switched off or if there’s a very short term glitch. A system based on a large amount of smaller generators (such as wind and solar) has less in the way of this kind of inertia – without which, a small glitch could cause a cascade of failures that blacks out the entire grid, and so mechanical systems such as capacitors and flywheels or electronic systems that balance the grid through ‘synthetic inertia’ may be required.

The second is for what’s known as ‘smoothing’. This is when short- term peaks and troughs in demand over a day or over a week create a short-term mismatch between supply and demand. In the morning when people are getting ready for work or in the evening when they first get back from work there are surges in demand and this demand must be ‘smoothed out’ by storing electricity in periods of low demand and using it when demand spikes. There are a number of methods of providing this kind of storage. The simplest and best-known is electric batteries and this will provide the backbone of a smoothing system. These will be localised at substations and will ensure that localised supply rises and falls in line with demand. But there are other ways to store energy for this purpose and some are cheaper and cleaner than batteries depending on local conditions. For example, there are various gravity-based storage systems (winching up heavy weights to store energy, letting them fall to turn turbines when it is needed) and systems such as liquid air storage (spare electricity is used to cool and liquify air and then this is allowed to reach ambient temperature when needed, expanding rapidly and turning generation turbines). A full plan of place-based energy smoothing will be needed.

The third type of electricity storage Scotland need is ‘inter-seasonal’ storage. With wind energy there are times of the year where there are higher wind speeds so more electricity generated and other periods where there may be low wind speeds for a week or more at a time. To equal out supply and demand over these longer timescales the best bet is hydrogen. This involves running spare electricity through water to split it into hydrogen and oxygen. The hydrogen is then stored and when energy is needed it can be combined with oxygen in a fuel cell to produce electricity or burned in exactly the same way natural gas is to run turbines – but without the carbon dioxide emissions that are causing the climate emergency. Hydrogen isn’t massively efficient to produce but it is using electricity which is currently ‘dumped’ because it is generated at ‘the wrong time’. So in effect it is free when comparison to not using that electricity at all.

That gives Scotland electricity self-sufficiency, leaving two questions – who should own all this power and how should consumers pay for it? The way to answer the first question is pretty straightforward. The wind is a natural resource which belongs to all of Scotland so who should benefit from that resource, us or someone else? It should of course be us, and so all of Scotland’s new electricity generation infrastructure should be developed by a National Energy Company. This would be a National Mutual owned by all citizens which makes only enough profit to reinvest in maintenance and investing in new infrastructure. If this produces electricity which is too cheap (Scotland shouldn’t create incentives for people to be wasteful of its energy even

if it is rich endowed) the Scottish Government could tax it and invest the revenue in public services.

So how do we go about taking existing electricity into collective ownership? This is much easier and much cheaper than it seems. When Scotland grants the rights for private businesses to build wind farms it grants them a license allowing them to do so. Those licenses have a maximum period of 25 years and many of our existing wind farms are well into that period. Most owners seek to relicense their wind farms more regularly than that because they’re always trying to increase the efficiency of their turbines – most of the first generation of two Megawatt turbines are now being replaced with six Megawatt ones (known as ‘repowering’). All that has to happen is that the government makes clear that all future licensing will be exclusively to the National Energy Company, local community ownership schemes or some other form of public ownership such as a joint ‘public-public’ ownership between the National Energy Company and the local community , so at the point of license renewal the right to generate electricity for any given wind farm will revert to collective ownership at no cost. If the currently-deployed technology is worth it at the time of license renewal the National Energy Company could offer to buy that second-hand infrastructure. But much of it will require to be replaced and repowered by the time a license needs reviewed so that will simply become part of the ongoing reinvestment process for the National Energy Company. Either way, the whole of Scotland’s energy system can be taken into public ownership over the course of 15 or 20 years at no cost. The National Grid itself would need to be nationalised (it should be owned by the state), but the cost of this is much lower, and in any case the National Grid makes a generous profit and so the cost of nationalising it would quickly be recouped.

Which leaves only the question of how to charge consumers for it. To remain compliant with EU rules the generation company and the retail company selling to customers should be separate, but both can be publicly owned, so a National Electricity Company which does nothing other than sell the electricity. To do this it would entirely abandon the UK energy market which does such a disservice to Scotland. The UK’s pricing mechanisms are largely based on assumptions from the age of coal where fuel could be transported to power stations more efficiently than electricity could be transmitted long distances. Scotland would base its pricing on the availability of energy production and storage as well as proximity to local generators (communities and businesses near to wind turbines too often don’t feel a tangible benefit of that proximity beyond a relative pittance invested into community benefit funds). That same pricing mechanism has also seen spikes in the global price of gas cause the price of all other energy generation, including renewables, to spike upwards as well – consumers paying extra for a ‘100 per cent green energy tariff’ have not been insulated from fossil fuel geopolitics. A goal of the Scottish electricity network should be to deliver energy to users at a rate close as possible to ‘cost plus revenue’ – that is, a price sufficient to pay for the construction, dismantling and externality costs of the energy production (including pollution) plus a regulated profit margin on top for reinvestment. This would break the link between renewables and fossil fuel prices and push prices down in the case of many renewables where the costs are largely capital-based (e.g. the wind turbines and solar panels) rather than ongoing fuel costs.

One implication of very cheap electricity though is the potential for waste or profligate use. Scotland may wish to consider a cheap ‘social tariff’ for electricity and heat that allows basic needs to be met and then a surcharge tariff on usage above this point. Calculation of this ‘basic rate’ would have to consider the circumstances of a particular household as someone on a low income, living in a badly maintained, private rented house may have high basic energy needs and limited ability to reduce their demand compared to someone on a higher income who lives in a newly built house that is either already well insulated or the owner is capable of making the required retrofits quickly.

The downside of most renewables (with exceptions such as pumped storage hydro) is that they are ‘non-dispatchable’ and cannot be ramped up or down in response to demand beyond offering ‘constraint payments’ to encourage generators to switch off entirely despite high winds or suchlike. This may mean that energy pricing continues its move away from a fixed flat rate adjusted when a consumer renews their contract and more towards almost ‘real-time’ pricing with higher rates during periods of high demand such as in the early evening. Negative pricing during low demand periods (effectively paying people to use power when supply is much greater than demand) or reward payments for lowering demand during peak times (paying people to not use electricity during a high demand period) can help but only for demand that can reasonably be shifted.

The inability to shift demand can have extremely negative social effects as lower income households or households with large families may have limited ability to shift their demand or may suffer social stigma for doing so (variable pricing schemes cannot be allowed to ‘price out’ poorer households from being able to cook a hot meal at a regular meal time or to penalise the service industry when high demand time coincides with their peak service time). These negative effects can be greatly mitigated through energy storage and smarter control systems that automaticity charge batteries during cheap periods or smart

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meters that suggest timer settings to users for high energy devices such as washing machines. The UK and other countries are already experimenting with policies of this kind but it must be stressed that the timing of these policies is important as implementing such energy ‘surge pricing’ without giving people the ability to adjust their demand through storage or behaviour shifting will result in hardship especially for lower income households and businesses. The UK appears to be pushing forward with pricing policies faster than it is deploying demand shift policies such as energy storage deployment.

If all of that meets all of Scotland’s domestic electricity needs only using wind-generation (in combination with energy storage), what should Scotland do with its enormous marine energy resources? The Gulf Stream is a massive current of hot water which comes up from the Caribbean right past Scotland’s west coast on the way to colder waters in the Arctic. When it meets the colder waters, this warm water cools rapidly and sinks much deeper, where it heads off again, now in pursuit of warmer water. This takes it towards Africa and the Azores – but on its way it all funnels through the Pentland Firth between Scotland and the European mainland. This creates an absolutely astounding amount of potential energy to be harvested before even considering wave and tidal power.

To capture that power Scotland’s National Energy Company should greatly accelerate the sluggish development of subsea turbine technology so these enormous sea currents can be used to generate electricity. But since Scotland doesn’t even need that electricity, what should we do with it? We need an Energy Industrial Policy to lever real economic advantage from this national resource. There are lots of things Scotland can do with that spare electricity. The most obvious is simply to sell it directly to another country – either the UK over the National Grid interconnectors or via subsea cables to continental Europe.

A second option is to use it for hydrogen production. Here electrolysis plants turn water and electricity into hydrogen and oxygen. These can be onshore (a great industry to boost coastal Scotland) or at sea in the form of oil rig-style installations. The hydrogen is captured and can then be loaded onto hydrogen tankers and exported anywhere in the world. This creates more jobs and gives Scotland a major lead in one of the world’s emergent industries. There is a rich series of secondary industries which can be pursued as well – for example industries which are hydrogen-intensive (‘green steel’) or which use hydrogen as a starting point (you can make artificial aviation fuel from hydrogen). Plus, because hydrogen can be transported by ship it means Scotland has a much wider range of trading partners.

A third and potentially even more attractive option for Scotland’s spare electricity is to use it to attract or support the expansion of energy-intensive industries. Many want to trumpet their green credentials and few countries can supply large amounts of 100 per cent clean electricity. Using that to attract those industries to Scotland could be a wonderful source of jobs and productivity, as well as providing yet another significant investment opportunity.

In reality, a combination of all of these approaches is likely to get Scotland the best benefit – but it is a truly marvellous opportunity for us whatever way we choose to use it.

That takes the carbon out of almost all of Scotland’s energy – but not quite. The problem of how we heat our houses remains, and there is no easy solution to this. Around half of Scotland’s total current energy demand is for heating (the rest is split almost evenly between electricity and transport) and almost all Scotland’s heating is gas or other petrochemicals and there is no easy replacement for that, certainly no like-for-like replacement. The closest option for like-for- like is to replace gas with hydrogen, but this faces enormous problems. Hydrogen makes metal brittle so can’t go through many of the existing pipes, it burns too hot so needs to be mixed with something and existing boilers would need to be adapted or replaced. There isn’t the supply – and in any case it is ruinously expensive.

Another seemingly easy option is direct electric heating, but that too has many problems. There would need to be a lot more electricity generation built and very substantial sums would need to be spent on reinforcing the National Grid as demand spikes would become enormous. Plus, to be even nearly cost effective existing wet radiator systems would all need to be taken out and replaced with modern, efficient electric radiators. This would all be expensive to do and even then the cost of heating would be significantly higher.

Air Source Heat Pumps are therefore often cited as the preferred option. These are efficient in the summer but less so in winter. They are expensive and intrusive to fit and use a lot of electricity when at their least efficient (very cold weather). And while they can produce heat that is competitive in price with gas they do not last forever and the expense of buying and fitting them will become a regular expense for households. Despite their relative efficiency compared to direct electric heating, they will also have an impact on the grid at peak times which must be accounted for so extensive infrastructure upgrades would still be required.

In fact, all of these options fall into a surprisingly similar price range when all is added up, and there is another option. All of the solutions above use either electricity or hydrogen to transport the energy and then turn it into heat in the house – but then that is an expensive way to generate heat. What we need is a good, cheap way to produce heat in volume and then a way to distribute it to households. The latter part of this is best done through a District Heating System (also known as ‘heat networks’). These are exactly like water mains into the house but the pipes are insulated and they carry very hot water. When the water arrives at the house it goes into a heat exchanger which transfers the heat from the water into the household heating system. A heat exchanger is generally a like-for-like (and inexpensive) replacement for the existing gas boiler and the rest of the house’s heating system is untouched, operating as it always did.

Of course the downside to district heating is that the installation of ring mains and sub-mains leading to every house is the disruption it causes. Roads need to be dug up, gardens disrupted and so on. But there are two factors which offset this. The first is apparent if we take the long view – the oldest still-working district heating system in the world is not well over 100 years old. If Scotland did this right the infrastructure would last 300 years. This is a once-in-many- generations task, just like the Victorians building sewers was, or the post-war housing boom.

The other great advantage is the cost of the heat. Once the infrastructure is put in place the water in the system can be heated in any way we want, at any point round the system that we want. This makes it very flexible. It could, of course, use renewable electricity to generate the heat via large scale heat pumps (which would be more efficient than their smaller home-scale counterparts). It can capture the waste heat of industrial facilities, or it can use the large amounts of heat available in abandoned and flooded mine work, or it can draw heat from geothermal sources, or can absorb heat from water ways. But there is one extremely efficient and cheap way to generate heat which should dominate – solar thermal. Solar thermal panels convert the sun’s light into heat, and they do it much more efficiently than photovoltaic panels (capturing more than three times as much energy). Plus, solar thermal panels are cheap to make and very reliable. Evidence from Europe tells us that it is economically feasible to transport heat up to 80km between its source to its destination and can be cheaper to transport than gas and electricity if less than 40km away. This means that it would be perfectly possible to serve Scotland’s major cities with heat generated near to existing large wind farm sites or areas that are well suited to large-scale thermal storage.

The downside to solar thermal is its seasonality – it generates the most heat at the time of year when we need the least heat. But that is easily dealt with through inter-seasonal heat stores. What you do is dig a reservoir (you can insulate the sides and bottom if you want but the earth largely does that itself), fill it with gravel and water, put in heat exchangers and then cap the whole thing with an insulating cover (you can put solar thermal panels on this). During the summer when there is much more heat generated than needed you simply heat up the reservoir and then in the winter when you need the heat you take it back out again. You can plug in any kind of heat generation to this system that you want – you could supplement heat in the winter by co-locating a big wind turbine to generate heat and put it straight into the heat store.

Before we do any of this we need to insulate our homes better (discussed later), and that takes out about 40 per cent of heat demand to begin with. By the time a ‘heat budget’ is created (a mix and match of other heating technologies feeding into a district heating system) the other 60 per cent of the heat comes from entirely renewable sources. And if new heating technologies come along they can easily be plugged into the system, future-proofing it.

By Common Weal’s calculations the full installation of universal district heating would cost only about thirty per cent more than the full cost of shifting to Air Source Heat Pumps. But of course you only need to do it once where as you will have to replace your heat pump. And once you do, once you put all the infrastructure in place, the heat itself is virtually free. That is markedly not the case with any other option.

Anywhere on the gas main is a feasible destination for district heating, as are ‘compact rural’ sites such as a small rural village that can maintain its own heat supply and network (much like the old isolated ‘town gas’ networks from the early 20th century). Those who are not on gas mains heating are probably currently using LPG or heating oil. Both of these can be replaced with bio-alternatives (produced from organic crops or as the by-product of waste processing. They are also much easier to convert to biomass or Ground Source Heat Pumps and other options. None of these are ideal at very large scale because of the volume of crops needed to sustain them, but to deal with those households for which district heating is not suitable these offer a simple, clean solution.