Paul Sheerin is chief executive of Scottish Engineering
IT’S an exciting week ahead for us at Scottish Engineering, as in our capacity as manager of the Forth and Tay Offshore Cluster we will be hosting our first ScotWind supply chain event in conjunction with the Scottish Offshore Wind Energy Council.
The event is based in the Michelin Scotland Innovation Parc, with an opportunity for attendees to also visit Forth Ports’ renewables capability at the Port of Dundee. Tickets are long sold out with a waiting list for those companies still keen for a chance to come and meet nine of the successful ScotWind developers who will outline their plans for their projects, and how companies large and small can be a part of their multi-tiered supply chain.
The ScotWind-selected offshore wind energy projects were initially 17-strong, now increased to 20, with an installed capacity of almost 28 gigawatts (GW) – when our initial hope was for around 10GW. And just to put in context the scale of that, it’s equivalent to approximately 25% of Great Britain’s current total generating capacity. Crucially, 60% of that capacity will consist of floating offshore wind installations, a newer technology which opens deeper, further out, waters around Scotland which would be outside the reach of sea-bed fixed installations.
By now I’d expect a few raised eyebrows on the realities of this opportunity, and to be fair our history in onshore and offshore wind has been fairly low in manufacturing content, with the most significant flow of work being in the installation, operation and maintenance areas.
The ScotWind leasing process has aimed to change that, with project bids asked to lay out their expenditure commitment over the first six years of development, construction and operation phases. These have been broken down under the Supply Chain Development Statement guideline issued by Crown Estate Scotland and separated into a summary of both commitment and ambition.
To save any strained eyebrows, let’s consider only the commitment breakdown for the first 17 (25GW) projects. This expenditure commitment amounts to £25.5 billion of spend in Scotland from a total of £69.4bn, marginally in front of the European Union at £25bn, with the rest of the UK at £10.9bn and others at £8bn. Breaking down that £25.5bn, a staggering £12.8bn is manufacturing spend in Scotland, assuming that 25GW are delivered from these projects, plus £2.2bn of development, £4.9bn of installation and £5.5bn of operations and maintenance spend.
Yes, these are long-term projects delivered over the next decade and a bit, and yes, no manufacturing company currently possesses a line of sight to a purchase order for one of these projects – yet. But the size and scale of these projects should have us all sitting up and focusing our attention on how we make the most of this, as it’s an opportunity of industrial revolution sized proportions, and a chance to significantly increase the modern large-scale industrial manufacturing Scotland already has.
No one is under any illusions about the hard work, investment and some rare joined-up thinking to achieve this ambition, but with an alternative of sitting on our hands and watching it literally float by, we have the benefit of a collective sense of purpose, witnessed in that sold-out status for this week’s event.
There are challenges for sure too – infrastructure investment is not something that Scotland or the UK have excelled at in recent decades, and we will need a step-change in that response to catch this moment, and anyone in industry I am sure can fill in the rest of the list.
In terms of threats however, one leader is out in front, and I make no apologies in being a broken record on this topic. A lack of skills, particularly those gained through apprenticeships and work-based learning, is the single largest threat to missing this opportunity. Today we don’t have the numbers with those skills to fulfil the current demand on industry, and we cannot kid ourselves that we can fulfil our ambition of increased large-scale manufacturing without fundamentally changing the volume of those skills now.
The timescales involved mean that, if we start today, this is not beyond us, but for that to happen every single company that comes forward with a commitment to take an additional apprentice – no matter how late in the day – must receive a “yes”, and there are too many reports of that not being the case. Training groups, colleges and companies are reporting that when they reach their allocation, additional requests are not able to be met, and we need to find a way to change that.
We live in financially precarious times, and cost savings are an inevitable part of the situation we find ourselves in, but anyone with an eye on the future would surely see that, given the size of the prize, we need to shift priorities – and the available spend – to win that race.
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