The wind's pushing Scotland forward

In the global race to develop sustainable alternative energy sources, Scotland is among the countries currently leading the pack. With 25 per cent of Europe’s tidal power and 10 per cent of its wave energy, the Scottish renewables sector is poised to become a major player not only when as traditional fuel sources dwindle or disappear in the future, but in the difficult decades which lie immediately ahead.

The success of the business, and its ability to meet the ambitious goals set by government and sector interest groups depend on two factors: the ability to create a new generation of appropriately-trained engineers and the development of low-risk exploration techniques that will boost the confidence of investors on the financial markets.

According to Joss Blamire, policy manager at Scottish Renewables, the sector is well-positioned to reduce carbon emissions in the region by 42 per cent by 2020 and take advantage of the “outstanding natural resources” on offer in Scotland. The Scottish Government, meanwhile, recently announced that it was aiming for an 80 per cent reduction in emissions by 2050. Although few of us ever think it as we make our way through rain and wind, Scotland's unpredictable weather - if harnessed correctly - might well be both Europe’s environmental savior and Scotland’s economic future.

Up until now, attention has focused on wind power, both off-shore and on. Chris Tomlinson, director of operations at Renewables UK, told The Journal that "the wider importance of wind energy cannot be undervalued", calling wind technology "the catalyst for a prosperous and sustainable renewables industry in Scotland, providing the necessary investor confidence and infrastructure that will allow emerging technologies to realise their full potential."

But other solutions - most notably in the fields of wave and tidal energy - are emerging, and may be just as well-suited to Scotland's environment. With tidal and marine power stations installed on the country's rugged northern coast projected to produce up to 1.6 gigawatts of electricity by 2020, experts believe that the Atlantic currents flowing into the straits around Caithness are perfect for this kind of project.

It isn't just conventional natural resources that make Scotland such a haven for renewable energy research. In Speyside, one of the world's largest drinks manufacturers, Diageo, have announced plans to build a bio-energy plant that will produce green energy from byproducts of malt whisky distilling. Brian Higgs, the company's malt distilling director, claimed that the move would create "a sustainable future for Scotch whisky production". Although the sector's main focus is on renewable wind and tidal energy, initiatives like the Speyside plan help set moral standards for both local and internaitonal companies, and set a strong example for private sector enterprises looking to reduce their carbon footprints.

The provision of proper training through relevant engineering courses at Scottish universities is likely to prove crucial to Scotland's efforts to take the renewable energy market by storm. Business secretary Vince Cable recently announced a £6.5 million investment in this area, including the funding of a new Industrial Doctorate Centre in Offshore Renewable Energy (IDCORE) based at the Universities of Edinburgh, Strathclyde and Exeter. IDCORE aims to equip PhD candidates in engineering with the business acumen necessary to lead the sector in the coming decades, but although it's a strong start from a policy perspective, it is nonetheless likely that the sector will remain heavily dependent on public sector subsidies for the forseeable future, while more efficient energy production techniques are developed.

The financial markets have traditionally viewed renewable energy research as risky to fund, and the blocking of innovation by lack of investment is a growing problem for a field still in its infancy. In the short term, banks and other financial institutions must approve funding for high-risk renewable projects if less risky alternatives are to be developed in the future.

Fortunately, some banks are already choosing to overlook the perceived financial danger tied up in experimental research projects like these, and are slowly growing more willing to provide the financial backing that will ultimately help to establish and sustain a market value for these companies. Barclays recently agreed a £3.4 million loan to Aquamarine Power, an Edinburgh company specialising in wave energy - the exploratory phase of which is seen as among the most costly in the sector. Tidal energy research has thus far been heavily subsidised by the government, and the entry of commercial financial institutions into the market bodes suggests that we may soon see the much-needed non-governmental investor into the renewables sector - an impression bolstered by Barclays earlier approval of a £22.8 million loan to the Drone Hill wind project in the Scottish Borders.

As with most emerging industries, financing is key. The initiatives undertaken to provide developers with financial backing, and young engineers with the appropriate skills, are crucial if the sector is, as some expect, to become the crown jewel of the Scottish economy. The Scottish Government has expressed strong feelings on the issue, and seems remarkably aware of the importance both of financial risk-taking and of the need for government support in development of the necessary technologies. Speaking to The Journal earlier this year, First Minister Alex Salmond commented that the Scottish Government's investment in the renewables industry is intended to "galvanize" them, and to create interest in the sector among a new generation of engineers.

"We're in a strong position with all these technologies," he said. "The jobs are already coming because of offshore wind. We're a wee bit further away with other resources like tidal and wave, but we're still ahead of the world."

Scottish companies developing this technology are indeed world-leaders - so much so that Palemis, a company based in Leith developing marine energy technology, recently secured a contract with Portuguese government to develop similar techniques to be used in the coastal waters of southern Europe.

This is a prime example of the ways in which knowledge and engineering skills will bring not only new techniques, but a whole new identity to the Scottish market. Mr Salmond hopes that "tidal and wave industry will conglomerate in Scotland, and once you've got the best engineers, thinkers and researchers you build an industry, and then it takes on its own momentum.

"We're the Silicon Valley of renewables."

It looks like public opinion is behind him on this one. An independent poll commissioned by Scottish Renewables in 2005 revealed that 73 per cent of the Scottish public agree with wind farms as a method of generating electricity for Scotland now and in the future, while 78 per cent agreed that the national grid should accommodate renewable schemes to make possible a gradual move away from more environmentally damaging power sources like coal.

At this point, discussions about Scotland's economic and environmental futures are fundamentally flawed if they disregard renewable energy. With the current economic and environmental costs of oil being what they are, and persistent doubts about the safety and sustainability of nuclear energy, Scotland finds itself in a unique position to take advantage of its natural resources and to help bring in a new era in the production of electrical energy.