Energy plan risks Scotland’s industrial transformation

The emerging signals are giving cause for significant concerns.

Through Crown Estate Scotland’s ScotWind offshore wind leasing round, 16 projects are currently being developed in our waters with a total projected spend of £25.5 billion (an average of £1.6bn per project) in the supply chain. Together, these projects will build the confidence and scale which attracts investments in manufacturing, operations and maintenance, and provides thousands of new skilled jobs.

Yet it is understood that only two of the six pathways which will be presented to the Secretary of State include all of these Scottish schemes. Decisions about the SSEP matter for the economy in every postcode in Scotland, but are, perhaps, most acutely significant for industry and employment in the north of Scotland.

The economic opportunities for the Highlands and Islands from the planned investment pipeline – with 40% in offshore wind and a third in pumped storage hydro, onshore wind and green hydrogen – is over £100 billion, a once-in-a-generation prospect that would eclipse in scale even the growth in hydro-electricity post-WW2 and oil and gas from 1965 to 1980.

This investment would support over 114,000 full-time equivalent (FTE) job years in construction and around a further 18,000 direct FTE operational and maintenance jobs. Significant public and private investment has already been mobilised across enabling infrastructure, manufacturing and services in anticipation of a sustained pipeline of offshore wind projects, and transmission projects to connect them.

Ports, such as Buckie, Stornoway and various sites around Inverness and the Cromarty Firth, are being upgraded, and Sumitomo, the Japanese conglomerate, plans to establish a power cable factory at the Port of Nigg. If SSEP does not facilitate the full ScotWind pipeline, it will not only jeopardise future supply chain investments across the region but it will put those made to date at risk. In north-east Scotland, the threat is not only a missed opportunity, but accelerated deindustrialisation.

A recent report from the Energy Transition Institute at Robert Gordon University (RGU) has warned that the regional economy is in a ‘make-or-break’ period. Job creation in the renewables sector is not currently keeping pace with oil and gas decline, which is being accelerated by UK Government policies. With the region hosting around one in three of the UK’s offshore oil and gas jobs and roughly one in four of the UK’s offshore energy jobs, this mismatch is leading to the loss of a skilled workforce and erosion of supply chain capacity – a loss of capabilities that will permanently weaken the UK’s offshore industry.

Over 70% of all successful ScotWind leasing bids are located within 100 nautical miles of Aberdeen, which positions North Sea Scotland attractively for onshore support options. Their delivery in full could help to underpin a clear and positive future for the workforce and region – with the workforce transitioning from 90% oil and gas and 10% renewables at present to between 30% and 45% oil and gas and 55% to 70% renewables by 2035.

Offshore wind is identified in the UK Government’s Industrial Strategy as critical to the future of Scotland’s clean energy industry and a highly skilled, well-paid workforce. More than 70% of the spending throughout a project’s lifecycle can be retained domestically. In particular, Scotland is a world-leader in the development of floating offshore wind and we can establish a homegrown supply chain and jobs here with real export opportunities.

However, to do so, the SSEP must support – rather than constrain – investment in Scottish industry through the continued progression of the whole ScotWind pipeline. It should also build on Scotland’s strengths in onshore clean power through support for pumped storage hydro and onshore wind, particularly the repowering of windfarms.

Re-engineering of sites in Scotland is starting to ramp up as the turbines installed as part of the expansion of wind installations during the 2000s near the end of their working lives. This presents the opportunity to replace them with modern, larger and more efficient structures which mean that sites can generate more power with fewer turbines.

For example, plans for Whitelee Windfarm, on Eaglesham Moor, near Glasgow, would reduce the number from 215 to round 124 while nearly doubling its generation capacity (539MW to around 1000MW). These are proven, wind-rich sites with established infrastructure and community support. Repowering them will increase their economic, social and community benefits.

The problem is that the emerging SSEP relies on existing onshore capacity and does not prioritise the repowering of sites. As existing turbines cannot be life-extended indefinitely and like-for-like replacements would produce less and more costly clean power than modern ones, there is a real risk that, should the SSEP not recognise and facilitate repowering, Scotland may in fact lose significant existing generating capacity.

Scotland’s renewable energy sector already supports more than 47,000 FTE roles and ScotWind developers have spent more than £1bn on projects. But, with economic growth and living standards weak, workers and communities are, understandably, impatient that promises of more jobs and reindustrialisation are fulfilled more quickly.

This decision on the SSEP will have a meaningful impact on Scotland’s industry and prosperity for decades to come, and Scotland’s political leaders need to use their influence now to make sure that the benefits for our economy and society are fully accounted for in decision-making so the pathway taken is the best one for our country.