Soaring oil prices, predominantly caused by the Russia-Ukraine war, have highlighted the need for countries to “double down” on moving to renewable energy sources, Scotland’s trade minister said on Wednesday.
Brent, the global benchmark for two thirds of the world’s oil, reached $120.64 a barrel on Wednesday following disruption to Russian and Kazakh crude exports.
Some experts predict the price could reach as high as $200 this year, with further sanctions on Russia, the world’s second-largest crude exporter, expected when US President Joe Biden meets European leaders on Thursday in Brussels.
Scotland’s Minister for Business, Trade, Tourism and Enterprise Ivan McKee said volatility in the oil price shows the need for countries to shift to renewable energy sources.
“From our point of view, our perspective is that we need to double down on the shift to renewables because that is all about giving you resilience and giving you the ability to deal with some of these shocks because you’ve got better control of your own energy sources,” Mr McKee told The National.
“If you look at what’s happening, countries that are vulnerable to that are looking at how do they accelerate the shift to renewable. So from Scotland’s point of view, it really tells us that we need to be moving as fast as we can to affect the transition.”
Scotland has been a champion of renewable energy for many years.
In 2011, it set a target of reaching 100 per cent of electricity used to be generated from renewable sources.
According to figures released in December, 98.6 per cent of gross electricity consumption in 2020 came from renewable sources — minus net exports.
Onshore wind delivers around 70 per cent of its renewable power, followed by hydro and offshore wind.
The UK has pledged that all of its electricity will come from renewable sources by 2035.
Leading hydrogen producer
Scotland is also positioning itself as a leading hydrogen producer.
In November, it announced a five-year plan, backed by more than £100 million ($132m) of funding, to help build its hydrogen economy to provide nearly a sixth of Scotland’s energy needs by 2030.
Hydrogen — which can be produced from both renewable energy and natural gas — is expected to become a critical fuel as economies and industries transition to a low carbon world to mitigate climate change and global warming.
Mr McKee is currently in Dubai leading a delegation of more than 20 Scottish companies in hydrogen, agritech and satellite communications who will present their innovations at events taking place at Expo 2020 Dubai.
The Scottish Hydrogen and Fuel Cell Association (SHFCA) signed an agreement with the Clean Energy Business Council, Middle East and North Africa at Expo 2020 on Wednesday to support the development of clean energy in both locations and around the world. PlusZero, a Scottish clean, portable power start-up, signed an agreement on behalf of the SHFCA.
During the week-long visit, he is also meeting government and business officials to discuss opportunities between the two countries.
“I met with Mubadala earlier on to talk about investment in Scotland,” said Mr McKee.
“That’s obviously one of the big focuses in the investment partnership between the UK and the UAE. We had an interesting conversation about opportunities on hydrogen investment.”
In September, BP, Masdar and Adnoc signed a deal to work together to develop low carbon hydrogen hubs and decarbonised air travel corridors between the UK and UAE.
Together, they initially aim to produce 2 gigawatts of low carbon hydrogen in the UK and UAE, with the intention to expand as the project progresses.
Glasgow hosted Cop26 in November which saw thousands of global figures converged in the Scottish city to discuss ways to achieve a carbon-neutral future and keep global warming to 1.5°C above pre-industrial levels by 2050.
After two weeks of negotiations, the Glasgow Climate Pact was approved by almost 200 countries on the final day.
Mr McKee said aside from the discussions at government level, the lasting legacy was the talks that took place on the sidelines of the event.
“From my point of view the most remarkable thing was the amount of money that was in the room, if you like,” he said.
“Big investors, big global corporates with a lot of money to spend on energy transition and needing to some help to understand where best to make those investments.
“From our perspective, it allowed us to show that we have a very clear vision on this.
“We’re very focused on the direction we’re taking and we understand how that works. And we’ve got a very strong ecosystem.
“Hopefully investors saw that as a very welcoming environment for them to be able to be part of and help solve some of their problems of where they put all that money that they’ve got committed to this.”