Offshore wind has the potential to transform the Scottish economy, create large numbers of well-paid jobs and regenerate whole sectors of our industry. However, the key word is “potential”.
Crown Estate Scotland’s announcement that the auction of plots for major offshore wind projects around the Scottish coast has netted £700m is a major landmark. Communities and businesses know who they are going to be dealing with. Substantial sums will change hands very shortly so there will be commercial pressures on licensees to follow through and make it happen.
To digress slightly, it is 40 years since I started drawing attention to the unaccountable power held by this strange body, the Crown Estate, of which hardly anyone had heard (when it was dishing out fish farm licences to multinational companies with neither consultation nor return to local communities).
The long campaign to reform its activities has been partly successful. Devolution means the money accruing from this licensing round will go direct to the Scottish Government, a point to which I will return. Meantime, it is worth noting we have come a long way from the 1961 Crown Estate Act which actually made it an offence to call into question any action taken by them – one of which I have often been guilty!
With licences awarded and winds blowing, what can possibly go wrong? Well, quite a lot actually and we do not need a crystal ball when the book is so recent. Without strategic preparations, the major industrial opportunity will slip through our fingers – just as with onshore and offshore wind to date.
It is inconceivable there will not be some benefits given the sheer scale of this programme. A lot of crumbs could add up to a decent loaf. What needs to be defined is the extent of our ambition and how it will be met? Without planning matched by strategic investment, the potential will not come close to being maximised.
Another unhappy precedent is the oil platform boom in the 1970s. Companies fought each other to find a site and an order. Then the technology changed, there was no continuity and Scotland was left with a lot of holes in the ground while countries which had planned and invested took the work.
That is fairly close to the onshore wind experience – thousands of turbines scattered around our landscape and a mere pittance of jobs created. Without planning, without investment, without industrial sites, without ports capable of carrying out big tasks as well as small ones, the potential will soon diminish. On the other hand, if we get it right our supply chain can become exporters to the world, just as with the North Sea.
Big floating projects are a decade away with significant obstacles to overcome – environmental studies, fishing interests and the fact “floating wind” is much spoken of but so far little implemented. Let’s hope it works. There will be competition for subsidy, internally and with winners in last year’s Crown Estate auction who paid vast sums for sites off England and Wales. They too will be looking for a return.
So nothing is guaranteed and there is time to get this right – but not too much, with others waiting in the wings. The north-east of England is already streets ahead. We heard recently from the Mayor of Tees Valley how three inward investments originally destined for Scotland were diverted to his own bailiwick because of freeport status while the Scottish Government continues a ridiculous argument about what to call them, or indeed whether to have them at all. Get real, for goodness sake.
There is no excuse for not recognising what needs to be done. Last October, a committee chaired by Sir Jim MacDonald of Strathclyde University identified exactly these kind of issues and made sensible recommendations, including a partnership approach for ports to provide the infrastructure, area and capability needed to attract investment.
I offer one related practical suggestion. The £700 million in licence fees is not some hypothetical, future sum. I checked with Crown Estate Scotland and it will be paid in April to the Scottish Government as soon as licence terms are accepted and signed.
In other contexts, the SNP are very keen on “funds” so money can be dribbled out as largesse, rather than through cash-starved local authorities. In this case, however, there is an overwhelming case for a ring-fenced fund, with every penny of the £700 million ploughed into infrastructure and skills training, necessary to maximise ScotWind’s potential.
There should be total transparency. We know to the last pound how much will be coming in and should equally know exactly how it is being invested in Scotland’s industrial future.
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