A new £2billion Energy Wealth Fund will be established using tax revenues from North Sea oil and gas production to finance renewable energy projects and support Britain's transition to low-carbon power.
Chancellor John Healey announced the fund alongside the government's decision to approve production from the Jackdaw gas field this morning, with future North Sea revenues to be channelled into clean energy investment.
The fund will begin with an initial £2billion injection from the Treasury, with further oil and gas tax receipts flowing into it over time to support renewable energy infrastructure, create skilled jobs and stimulate economic growth across Scotland and the wider UK.
The government said the initiative would ensure more of Britain's energy wealth was reinvested for the long term, creating a lasting national asset for future generations.
Mr Healey said: “I want Britain's energy wealth to spark a new wave of clean power to work for the British people.
“Since North Sea gas and oil were discovered decades ago, the benefit of our existing nation’s natural resources have not been turned into the long-term investment our country needs.
“Through our new Energy Wealth Fund, we will invest in the clean energy industries of the future, creating jobs, driving growth and strengthening Britain's energy security.”
The announcement comes ahead of the Budget, when the government is expected to set out further measures aimed at encouraging investment and economic growth.
The fund forms part of a wider strategy to maintain production from existing North Sea oil and gas fields while using revenues from the sector to accelerate the development of renewable and low-carbon energy industries.
However, the government has not yet detailed how much future North Sea tax revenue will be allocated to the fund, or the criteria that will determine which projects receive investment.