Hopes that Scotland could become a powerhouse in the green industrial market have been boosted after plans for a flagship subsea cable plant in Ayrshire won UK Government backing.
XLCC has secured up to around £90 million funding from the UK Infrastructure Bank to support work on the development of a factory where it will make high voltage cables.
The company is developing the plant on the site of a former coal terminal at Hunterston where it expects to employ 900 people.
XLCC hopes the plant will help it win a big share of a market that is expected to become huge. Countries around the world plan to upgrade their electricity distribution systems as they look to increase renewable energy generation to help cut emissions.
The cables that will be produced at Hunterston could be used to transport power huge distances. This could involve linking windfarms off Scotland to other parts of the UK or further afield.
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New subsea cable links could be used to address one of the big weaknesses of the current system – which sees windfarm operators paid not to generate electricity in times of low demand because it can’t be transported to areas where more power is needed.
The UK Infrastructure Bank funding provides a big vote of confidence in XLCC’s plans, which will be very welcome in Ayrshire and to the SNP Government.
The support will boost the Scottish Government’s hopes that Hunterston could build on its existing infrastructure and deep water port to become a centre for renewables engineering and manufacturing activity.
In the Green Industrial Strategy published this month ministers said: “Seizing the opportunity for Scotland to play a leading role in the emerging global net zero energy economy offers a route to creating highly-skilled, well-paid jobs with economic and social value.”
Japanese engineering giant Sumitomo last year announced plans to develop a high voltage cable production plant at the Port of Nigg on the Cromarty Firth.
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The UKIB backing for the Hunterston plant comes as the new Westminster Government looks to boost growth by simulating investment in renewables and related industries, in a way that will help to reduce the country’s reliance on oil and gas.
However, excitement about the potential impact of the plant will be tempered by the recognition that the number of jobs created in green industries in Scotland so far has been much lower than expected.
Cable plants in Scotland will face fierce competition from operations in countries such as Norway.
CBI chief executive Rain Newton-Smith said this month: “Though Scotland has made huge progress in pioneering the concept of a just transition and setting one of the most ambitious net zero targets in the world, the truth is, on green growth, we’re not where we need to be.”
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XLCC’s plan has been a long time in development amid signs that progress has been much slower than expected.
When XLCC signed an option to acquire the Hunterston site in 2021 it was reported that it would be fully operational in 2024.
A spokesperson for XLCC said today that full commercial production is expected to start in 2030.
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