The final item of business today is a members’ business debate on motion S4M-12218, in the name of Liam McArthur, on the wave energy sector in Scotland. The debate will be concluded without any question being put.
Motion debated,
That the Parliament deeply regrets the recent announcement by Pelamis that it has gone into administration and confirmation from Aquamarine Power that it is significantly scaling back operations; understands that these companies were responsible for delivering a number of world firsts and world-only successes in the development of wave energy; believes that, despite these serious setbacks, the wave energy sector in Scotland has an important contribution to make in creating the renewable technology mix that will be necessary to decarbonise Scotland’s energy system and meet its climate change targets; further believes that, with massive wave resources, notably in the Pentland Firth and Orkney Waters, a world-leading skills base and the European Marine Energy Centre in Stromness in Orkney, the sector remains well-placed to successfully deploy wave technology on a commercial scale; looks forward to the role, objectives and budget of Wave Energy Scotland (WES) being clarified in the near future; recognises what it considers the risks attached to ongoing delay in WES taking on its new role, including the loss of expertise and momentum, and restates its support for the development of a wave energy sector in Scotland that can help deliver high quality jobs in communities across Scotland, particularly in the islands.
17:08
In time-honoured fashion, I start by thanking all members who signed the motion and especially those who have made time to participate in the debate. I very much look forward to their speeches and that of the Minister for Business, Energy and Tourism. Although such gratitude is customary, it is genuinely heartfelt in this instance, because it has made possible a parliamentary debate on the future of the wave energy sector in Scotland, such as has been conspicuously absent in the three months since Pelamis Wave Power went into administration.
I acknowledge that the minister and the Deputy First Minister have responded to questions in the chamber, and I am particularly grateful to Mr Ewing for agreeing to meet privately with me and other members who have an interest in the issue to discuss our concerns in more detail. Nevertheless, I still believe that this Parliament has been ill served by being denied a proper debate on the issue before now; that would have been inconceivable if it had been the United Kingdom Government rather than the Scottish Government that was responsible for withdrawing the loan facility from Pelamis.
This debate matters because it provides an opportunity for Parliament to restate in unambiguous terms our support for the wave energy sector, to acknowledge the significant achievements that it has already secured and to reiterate our collective confidence in the contribution that renewable energy still has to make to our renewables future.
That is not to diminish or gloss over the problems that the sector faces. In some senses, they provide a sobering reminder—if any were needed—that the situation is not easy and that if it had been we would have cracked it some time ago. However, in the face of those who appear to want to read wave energy its last rites or who delight in saying “I told you so”, it is vital that this and future Parliaments and this and future Governments absolutely stay the course.
There is every reason for doing so. We should draw confidence from the world firsts and the world onlies that Pelamis, Aquamarine Power and other companies have achieved in a remarkably short period; from the world-leading skills and expertise that we have in our research and in our company base, not to mention the test facilities at the European Marine Energy Centre in my constituency; and from the abundant natural resources around our shores.
These are difficult and uncertain times for all who are involved in the sector, but now more than ever we need to signal our continued support and our willingness to be brave. For those who have already lost their jobs, of course, such support will come too late. For example, I know that many former Pelamis staff feel aggrieved by what has happened. The speed at which decisions were taken, the lack of consultation and the loss of earnings due have all left a bitter taste. One constituent wrote to me recently saying:
“I came back to Orkney with a young family and now face having to relocate. If I do, I doubt I will return.”
He went on to say that
“all responses to redundancy stated we would be supported by PACE. This hasn’t happened.”
That is troubling for a number of reasons beyond the obvious personal tragedy of a lost job and, possibly, career. It raises concerns, for example, about the ability of the sector to attract the sort of people whom it will in the future need to make it a success.
That is just one of the very many challenges that face the new body, wave energy Scotland. How will it replicate the sort of mission and vision that enabled Pelamis and other companies to persuade talented individuals with a range of skills to commit their futures to building a new industry? As I have said before, in the circumstances I entirely welcome the establishment of WES. There may be questions about why it was not brought into being prior to the demise of Pelamis in order to allow for a more managed transition. Nevertheless, it is to the future that we must all now look.
To that end, Scottish Renewables argues that WES
“provides an opportunity to start afresh, moving away from company focused and array driven funding models”,
and provides an approach to research and development that
“avoids duplication of effort on common challenges.”
That makes sense, although I would be worried if it were to herald a complete retreat back to the labs. Getting machines wet in the sort of environment that is provided by EMEC is where the greatest amount of learning takes place. If we lose sight of that, the risk is that we will take two steps back but then fail to take the requisite number of steps forward.
In that context, I believe that the decision to locate WES in Inverness is short-sighted. Orkney has been, and must remain, in the vanguard of our efforts to deliver a wave energy industry and it is therefore the logical place for WES to be based. Doing anything else sends entirely the wrong signal about how serious we are. I realise that we are not talking about large numbers of jobs, but to do that is to miss the point.
How serious we are will obviously be judged by the objectives that are set for WES and—just as important—the budget that is attached to meeting those objectives. Clarity on both is needed without delay—that is a key message from all those who have an interest in the sector. We need WES to be brave, but we need ministers to be brave, as well. A former engineer with Aquamarine Power explained to me recently that there is no point in spending little pots of money here and there and expecting much to change. To do so, he argued, would be self-deluding and unjustifiable, given all the other demands on public funding at this time.
If we are serious about making this development happen, we need to acknowledge what it is going to take and not pretend otherwise. We should bear in mind, however, that for every £1 of public funding, developers have been able to lever in £6 of private investment. Bravery, vision and commitment must also be demonstrated by the incoming UK Government after May’s election. Some of the statements that are being made about the future of renewables, including marine renewables, by those who could have a say in the make-up of the next UK Administration are truly alarming. I argue that retaining a Liberal Democrat influence post May is the surest antidote to some of the nonsense that is being spoken, but it is important that we build the broadest possible political consensus.
That, in turn, needs to translate into genuinely collaborative working between both of Scotland’s Governments. The challenges that face the wave energy sector are substantial enough without layering on political uncertainty or treating the future of the sector as a pawn in some wider political game. I am clear that an obvious and early priority for that joint working is delivery of grid connections to our islands. Again, that is something on which we have established consensus in the Scottish Parliament; I hope that that can continue, reflecting the fact that our islands are crucial if Scotland and the UK are to achieve their respective renewables and climate change targets.
I will return to where I started. This debate, and the support that we collectively reiterate for the wave energy sector, are important. After all, the sector plays to our competitive strengths—our natural resources and our research and industrial skills as the established world leader in the area. It provides an opportunity to create jobs and wealth, including in communities such as the one that I represent. The export opportunities for equipment and services are potentially enormous, which makes a case for wave energy to be treated as a technology and export opportunity rather than simply as a source of clean electricity. However, wave energy is, of course, a source of clean electricity. If we are to meet our challenging climate change targets—we have not done so yet—wave energy will need to be part of the mix.
The debate is long overdue, but I am pleased to have been allowed to make it happen. I look forward to hearing what colleagues and the minister have to say. I hope that we can send out a strong, decisive and unambiguous message from this Parliament about our collective determination to stay the course.
17:15
I apologise to the minister and Liam McArthur, because I will leave for other business before the debate’s close. I congratulate Liam McArthur on, and thank him for, securing this important debate.
Last week, I was in Saudi Arabia as a member of an Economy, Energy and Tourism Committee delegation, which was looking at the export opportunities for Scottish energy companies in that oil-rich country. I was inevitably reminded of Alex Salmond’s description of Scotland as the
“Saudi Arabia of... marine energy.”
In truth, I am sorry to report, it is hard to imagine a greater contrast between the king of crude in the Arabian desert and the parts of Scotland where the natural resource for our marine energy potential lies. Nonetheless, that potential is real, and Liam McArthur was absolutely right to say that it is important to emphasise that in addressing some of the issues that have arisen recently.
Rather than suppose that all we need to do is install the technology for the energy benefits to flow, recent events should focus our efforts on how to take forward all the potential technologies from the research and development stage to the point at which there is a prospect of successful commercialisation at scale.
Pelamis is going into administration and Aquamarine Power is to “significantly downsize” its business. Those are self-evidently disappointing outcomes at this stage for the wave power sector but, as has been said, those developments need not mark the end of the road.
We need to acknowledge the extent to which those two companies have carried the expectations of the Scottish Government for successful wave power development. Between them, they have received nearly £6 million in funding from the marine renewables commercialisation fund and they account for more than £11 million, or 44 per cent, of the fossil-fuel moneys that have been allocated from the renewable energy investment fund from March 2012 to October 2014. Therefore, the setbacks to the firms are setbacks to the sector as a whole and to the Scottish Government’s investment priorities for the sector, as laid out to the end of last year.
It is therefore all the more important to understand as early as possible how the Government intends to deliver on its plan B—the setting up of wave energy Scotland. I hope that the minister will be able to say more about the new agency’s budget, its staffing and when it will publish its business plan. Above all, we need a frank assessment of what recent developments mean for the future of the sector nationally and for particular parts of Scotland.
Members, as Liam McArthur did, will rightly emphasise the impact of the developments on local areas, whether they be the centres of natural resources in the Highlands and Islands or the places where wave power companies have developed, including Malcolm Chisholm’s Edinburgh Northern and Leith constituency.
I want to emphasise the importance of the sector in Aberdeen and the north-east because of the potential for oil and gas service and support companies to diversify into offshore renewable energy development. The Aberdeen Renewable Energy Group lists 70 companies and institutions in its area with an interest in marine renewables—from the University of Aberdeen and the Robert Gordon University, with their focus on research and development, to engineering companies like the Balmoral Group, which supplies component parts. RGU has an ocean-wave tank, which allows new technologies to be tested. Aberdeen Renewable Energy Group is leading the way in offshore wind development, with its plans for an offshore wind testing and demonstration centre in Aberdeen bay, but it recognises the potential to go beyond that and to explore marine energy, too.
I hope that the minister will have words of encouragement for the sector. However, diversifying Scotland’s energy economy will take more than wishful thinking: it will take a serious commitment to addressing the obstacles to commercialisation, which have been highlighted in the past few weeks, and it will take a clear business plan for wave energy Scotland to get us back into play over the next few years.
17:19
I congratulate Liam McArthur on securing the debate, which is very important for his constituency of Orkney because, without any doubt, Orkney is the world leader in the marine renewable technologies of wave and tidal power. The debate is also very important for Scotland, because we have 10 per cent of Europe’s wave energy potential and 25 per cent of Europe’s tidal energy potential. It is very important for the UK, too, because Scotland’s wave and tidal energy can help keep the lights on in England as well as make a significant contribution to meeting the UK’s climate change targets.
The benefits are not just about decarbonising our energy supply and meeting climate change targets; there are huge socioeconomic benefits to be gained, not least for Scotland’s islands. The Scottish islands renewables project report, which was jointly commissioned by the UK and Scottish Governments and published in 2013, suggested that the total resource across Orkney, Shetland and the Western Isles was equivalent to 20 per cent of the UK’s electricity requirement. It suggested that 10,000 jobs could be created on those islands by 2030, and that a further 29,000 jobs could be created across the UK.
After generations of socioeconomic decline, the waves and tides around our islands represent the biggest opportunity that our islands have ever had. As if that was not enough reason to develop such technologies, Scottish Renewables estimates that there is a world market for wave and tidal technology that is worth £460 billion.
The European Marine Energy Centre at Stromness on Orkney is 10 years ahead of the rest of the world in wave and tidal research. The fact that Scotland has proven expertise in marine engineering is amply demonstrated—as Lewis Macdonald suggested—in our oil and gas sector, in which the sums generated from supply-chain exports now exceed the amounts that are earned in the UK continental shelf. We can do exactly the same in marine renewables.
It therefore astonishes me that the UK Government would turn its back on those opportunities, as it has done in its recent energy market reform bill. It astonishes me that it should fail to provide—as Liam McArthur acknowledged—interconnectors to our islands after more than a decade of prevarication. It also astonishes me that it should penalise Scottish generators with punitive transmission charges, as we have heard this week in the debacle over Longannet.
We should be in no doubt that it is not a lack of technological progress that has deterred investors; it is the failure of the UK Government to support this vital industry that has led to the liquidation of Pelamis and the loss of jobs at Aquamarine, just as it was the UK Government’s failure to provide the long overdue interconnector that led to Seatricity relocating from Orkney to Cornwall.
If Liam McArthur wants to point the finger of blame, he should point it at his Tory friends at Westminster, because everyone throughout the renewables industry in Scotland knows where the blame lies, just as everyone throughout the renewables industry in Scotland knows that the Scottish Government—Mr Ewing, in particular—has done everything possible and will continue to do everything possible to support our renewables industry. However, if the UK Government should decide to support Scotland’s wave sector and to put some hard cash on the table, I will be the first person to welcome that; indeed, I may even apologise.
17:24
It is a great pleasure to take part in the debate, and I congratulate Liam McArthur on securing time for us to consider such an important issue. It is especially important to Orkney, Caithness and Sutherland and the Highlands and Islands more generally.
We live in a time in which energy security is becoming more and more important. Wave energy is an exciting way of generating power, but it is by no means new. The idea of converting one of the great forces of nature into electricity has been around since 1799, when the first known patent was filed in Paris, if not before.
The Scottish Conservatives have for a long time been—and we fully remain—highly supportive of this technology. If we want to avert the consequences of climate change, we must cut down on our carbon dioxide emissions, and wave power can play an important part in our doing so. Future energy supply must stand firmly on a base of safe and efficient nuclear power whilst also harnessing the awesome power of mother nature in terms of wave, wind, hydro, tidal and solar power. Scotland is well placed for renewables and should therefore take a lead in all those fields—they are such opportunities for new employment and incomes in Orkney and Caithness and Sutherland in particular.
Wave power remains one of the forces of nature that has so far not been tamed, but it remains an obvious provider if it is used in a responsible and economically viable way. It is therefore regrettable that Pelamis Wave Power has gone into administration and Aquamarine Power has been forced to downsize. Support is needed for wave power during this critical period, so that we can create an environment where collaborative research and development can flourish, in order to achieve a breakthrough for the industry.
The industry is calling loudly for collaboration, so the answer must be for scientists and the wave power industry to work together to achieve not only a concept but a commercially viable product to generate electricity around the UK coast, and particularly in the Pentland Firth, which has often been described as the Rolls-Royce of renewables. I think that Mr Salmond once said that. The Scottish Government’s wave energy Scotland initiative might be able to deliver that, but it is essential that we take advantage of the financing and expertise of the UK as a whole. We have in the past shown that, when we work together as one, great things can be achieved.
One example of how wave power is already working can be found in Argyll and Bute, on Islay, where the land-installed marine power energy transmitter—LIMPET—has been operational since 2000. It is the world’s first commercial wave power generator. It produces only 250KW, but it is important that now, 15 years later, we look back and see what lessons can be learned for the future.
Islay is also the location for a significant tidal power development, which is another promising technology with a guaranteed power source four times every 24 hours. I note that the people on Luing are calling for a fixed link to the mainland for the island and are suggesting housing a tidal generator as well. The idea must be good if it can work in practice.
Wave power is another avenue that we must explore in order to deal with our carbon legacy, and Scotland is an ideal place to harness the power of the waves. It is surely a question of hurrying the technology forward to achieve that, and I ask the minister what will now be done to achieve that aim. Recent developments have—obviously—not been too encouraging. However, it cannot be impossible, with collaboration, to ensure that the technology becomes viable. A pan-UK approach to wave power should be adopted, drawing on the pool of expertise and funding that is available to us. If we work together as we have done in the past, commercially viable wave power will surely become a reality.
17:28
I congratulate Liam McArthur on securing the debate. I welcome the opportunity to discuss the importance of wave power to both Scotland’s economy and our ambitious targets for renewable energy and carbon reduction. Investment in this key growth sector is of national importance, and I hope that, in discussing the way forward today, we can find a shared agenda to support it through current difficulties.
Even this month, there have been a number of fairly damaging developments as a result of the Pelamis power firm closure in my constituency and in Orkney. Only a few weeks ago, the Swedish utility company Vattenfall announced that Aegir Wave Power, a joint venture with Pelamis, was being liquidated and, as a result, a large project near the Shetland islands was being cancelled.
The Pelamis closure occurred as a result of a failure to secure development funding, which is a huge disappointment, not only for the individuals who worked there but for the whole Leith community. This was a key employer for Leith and it was with great sadness that we learned the news of its closure at the end of last year.
Pelamis was an exceptional firm. As its website stated, it was
“the world’s most advanced wave energy technology company”.
It was the world’s first wave energy company to deliver electricity from offshore wave power to the national grid. It also succeeded in securing the first export order for a wave energy device in Scotland. As the blog site Common Space asks:
“How could a company with such award-winning credibility backed by government investment, in an industry that is estimated to be worth a potential £4.5bn by 2030, collapse so quickly?”
The situation around the demise of Pelamis is not entirely clear but the Government tells us that European Union state rules dictate that the necessary development had to, in part, come from private investment and we know that that was not forthcoming. When it could not be secured, a vital part of our local and national infrastructure was lost.
It is worth saying that state aid rules are notoriously complex and I would like to ask the Government whether the EU Commission was consulted about this aspect of those rules. I know that the employees and their families were distraught and many of them contacted me to share their great sadness and distress at what had happened and to ask certain questions. One question that has been asked was: how could the funding have stopped so abruptly? The result of that was a forced administration and quick dismissal of the staff within a few days.
I understand that the fear of an overseas investor might have influenced the Scottish Government but could it have done more to champion another bidder? Again, that is a question that has been put to me so I am putting it to the minister.
Finally, were there other bidders that the Scottish Government outbid? There is a certain amount of uncertainty about the whole situation, so any light that the minister can throw on it would be welcome.
I have only one minute left to look to the future and that is clearly what we have to focus on. We all welcome the creation of wave energy Scotland and we hope that it can take over a lot of the expertise, including from Pelamis, that would otherwise be lost. As the motion says, there is a risk in delay and the Scottish Government urgently needs to act and to clarify details of the business plan for wave energy Scotland. We all think that this is a good way forward in principle: seeking to retain intellectual property, enabling technology to reach commercial readiness, encouraging collaboration and fostering standardisation and a design consensus that will provide a platform for the commercialisation of the industry. In principle, wave energy Scotland is a good development but we certainly hope that it takes over its new role quickly.
It is right to say that the UK Government also has some responsibility for the situation. It should certainly take meaningful steps to adjust the electricity market framework to provide greater support to the wave energy sector. I hope that the two Governments can collaborate to make sure that Scotland will still become the leader in the development of wave energy.
17:32
It is clear that we agree that we need to fight for this industry and for its massive jobs and export potential. It is incredibly frustrating to see Pelamis and Aquamarine Power’s world-leading progress stumble. I have met, spoken with and received emails from constituents who are ex-employees of those companies and who desperately want to see wave energy become a Scottish success story, but who lost their jobs at the end of last year. They were devastated; not only had they lost their jobs, they had lost them in an industry that they had worked in, helped to develop and passionately believe in. So I welcome today’s debate and thank Liam McArthur for bringing it to the chamber.
The Government’s response to this serious break in wave energy progress has been to bring forward wave energy Scotland. I am pleased that it was successful in acquiring the intellectual property and other assets of Pelamis but, as the motion says, I hope that the minister can outline more details on the budget and the likely operation of wave energy Scotland. I know that the minister and Alex Paterson met industry representatives last month and I hope that he can tell us how the discussion is progressing.
It is clear that new technologies need patient capital funding. The long-term nature of the investment that is required is at odds with the demands of shareholders who look for short-term profits, but it is vital that we support this sector. It has, after all, attracted £70 million in contributions to the Scottish economy. During the past two decades, Scotland and the rest of the UK have lost out on a domestic supply chain for wind power. In contrast, the Danish Government invested £800 million over a 20-year period and made Denmark into the place we now import our turbines from.
From speaking to staff from Pelamis and Aquamarine Power in recent weeks, it is clear to me that they believe that wave power in Scotland is technically better placed than ever. We really do not want to be buying back this technology in a decade’s time because of a lack of commitment or foresight.
There are a good handful of on-going projects and companies working in Scotland to harness the sea’s power. Sadly, we can add Aegir to those that we have to say farewell to, but the opportunity is still there to make wave and tidal power a success. I hope that the Government will look at how it can harness the subsea skills of the oil and gas industry and add them to those of the engineers who are already working in wave power.
I ask the minister how much contact has been made with the Offshore Renewable Energy Catapult. It is headquartered in Glasgow and appears to have very similar objectives to wave energy Scotland, albeit for the wider offshore energy sector. Are Highlands and Islands Enterprise and the catapult centre collaborating?
We all agree that some of the support for wave energy must come from the UK. The energy market reform process has been traumatic for many and high transmission charges remain a problem. Instead of hearing our First Minister call for more tax cuts for fossil fuels—personally, I thought that we were beyond that—I would like to hear more calls for a fair transition to offshore renewables as a key demand.
Scottish companies took this technology out of the lab and into the open ocean, but some of those talented engineers are now working in the same industry overseas, in countries where the technology is lagging behind APL and Pelamis. With on-going investment by their Governments, those countries will catch up; therefore, we must do all that we can and work tirelessly to maintain our global lead. We have developed the technology and it is essential that we fully benefit from its commercialisation. We will benefit environmentally and socially, and we know that there are potentially tens of thousands of jobs in the industry as well as billions of pounds in exports.
I know that we will continue to work together, but I ask the Government to champion the industry. We really do need to make sure that the UK Government is in no doubt of the strength of Scottish feeling about the issue.
17:37
I thank Liam McArthur for bringing the matter to the chamber for debate. I genuinely welcome the fact that we can have a proper debate here. We rightly had fairly detailed parliamentary consideration of the matter when I brought it to Parliament at the earliest opportunity during topical questions on 25 November, but that is no substitute for a debate. Today, we have had that debate and I thank all members who have participated in it.
There has been welcome consensus on the support that exists for the principle of wave energy and its potential for Scotland, and the on desire that we should continue to play a leading role in developing wave energy here and for the world. We all agree about that. I have endeavoured to provide the face-to-face briefings for members to which Liam McArthur alluded. I also met Malcolm Chisholm in November and Alison Johnstone on 15 January, and my door is open for further meetings.
Many members have alluded to the success that Pelamis achieved because of the skills, expertise, determination and commitment of its employees, to whom I pay tribute. Reference has been made to the sadness, anger, bitterness and disappointment that many must have felt in the circumstances of the termination of the company’s existence. I understand that and I share those people’s concerns, as does Scottish Renewables in its briefing for the debate. Many members have spoken eloquently on the subject. There is no easy part of being made redundant; sadly, many people in Scotland face that situation across a range of businesses. Given my responsibility as minister for business, I am acutely aware of that.
The two Pelamis P2 devices that were deployed at EMEC together had more than 11,800 total hours of grid-connected operation. It is important that I say that to inform people who read the Official Report of the debate not only that there is cross-party consensus about the principle but that, in practice, Pelamis delivered a substantial amount of electricity to the grid. I am told that the longest continuous period for which the devices generated electricity was 19.5 days.
The challenges of operating in the marine environment are known to all members. I am no expert, but I understand that the main challenges that face the developers of devices are reliability, survivability and installability, and I have spent a lot of time discussing issues such as power take-off with industry experts not just from Pelamis, but from Aquamarine Power, Albatern, AWS Ocean Energy and other companies. Prior to deciding WES’s shape, form, objectives, funding and the roles that it should fulfil, I have made it my business to have detailed discussions with many of the industry’s leading players. Indeed, Alison Johnstone alluded to the lengthy meeting that we had at St Andrew’s house, which was followed by a dinner with many of the leading players.
The purpose of that engagement and the more substantial work that Highlands and Islands Enterprise is taking forward is to ensure that WES is set up in the right way. Many members have asked for specific details of WES, so I look forward to giving Parliament details of its budget, business plan and programme of activity on Wednesday 25 February via an appropriate parliamentary channel. I will ensure that all members are appropriately informed. I am not saying that there will be a parliamentary statement; however, I think that members want details, so I will provide them. Whether I do so through a question or otherwise has yet to be determined, but I want to tell members that we are nearly in a position to give them the information that they have quite fairly and reasonably asked for. I will follow that with an address to the wider investment community at the RenewableUK wave and tidal conference, which is taking place in Edinburgh on the same day, but I make it clear that Parliament will be informed first.
Questions about funding have quite rightly been raised. I am advised that Pelamis received about £95 million, £70 million of which was contributed by the private sector. The positive point that is to be made is that private sector investment was attracted; there were a number of private sector investors, and they contributed most of the money. There are detractors of wave energy—their voices have not been heard in this debate, but they are out there—and in response to them, I point out that private sector investors put £70 million into the technology and that through the skills of the individuals involved electricity was successfully generated. I have a breakdown of the funding with me, and I can tell members that the public funding came to about £25 million.
The difficulty that arose is well known. Sadly, there was no prospect of further commercial investment. I assure all members that the Scottish Government and the enterprise network spent a considerable amount of time and effort on potential options, but the stark reality was that once the last private sector investment had been withdrawn it did not seem possible for the Scottish Government to shoulder the total burden of the funding that would, according to experts, have been required to take Pelamis forward. There is no easy way to say that, but that is the truth of the matter. It is important that I am as candid and as straightforward as I generally try to be in my dealings, and that was the situation.
As for the UK Government, which Mr MacKenzie mentioned, I have sought to deal constructively with it; indeed, Greg Barker and I jointly opened the Pentland Firth and Orkney waters marine energy park some years ago. On 2 October, I met Amber Rudd at the margins of the Ocean Energy Europe conference in Paris, and she seemed very willing for her or her senior officials to meet Pelamis. That undertaking was not delivered, but I do not say that with any political intent. Frankly, by that stage, it was probably too late to turn the situation around.
I do not particularly want to blame the UK Government. In fact, although I have some sympathy with many of the points that Mr MacKenzie made, the opportunity that has emerged and the way in which we can deliver the aspirations that members have described in this debate lie partly in looking forward to the post-May scenario and seeing whether the UK Government can make more of a financial contribution to the wave sector in Scotland.
In particular, we can also work to ensure increasing support from the EU for the marine energy sector, which is now part of the EU strategic energy technology plan—the SET plan—which means that it is now eligible for funding. The work that Sian George of Ocean Energy Europe has done is very positive and brings with it the possibility that there could be realistic financial support from the EU. I mention that because I wish to be as positive as I can in this debate.
I do not want to pre-empt the announcements that will be made on 25 February. I wanted to make it clear today that the decision will be made, but I would like to say briefly why it has taken until 25 February in order to complete our plans. The reasons are broadly twofold. First, it was determined—as I made clear in my responses to the topical questions that I mentioned earlier—that we wished to secure for Scotland the intellectual property in the Pelamis devices and other apparatus and equipment. That proved to be a more protracted process than we had hoped, as is often the case when dealing with administrators, for various technical and unavoidable reasons.
We worked closely with KPMG and I kept in constant contact with Alex Paterson of HIE, who led the negotiations. We were closely involved at all points, and those negotiations were successfully concluded. Like most such negotiations, they were not particularly easy, but I can tell Mr Chisholm that there were ultimately no other bidders. I believe that that is an accurate description, although I have not seen confirmation of that in writing from KPMG. I was advised that, although there were interested parties, as so often happens that did not translate into actual bids of a realistic commercial value. That answers some of the questions that Mr Chisholm’s constituents have, and perhaps some of them are here in the public gallery this evening to hear the responses to perfectly straight, reasonable and fair questions.
The first thing that we had to do was therefore to secure that intellectual property, and that was done around 19 January, which is when I reported to Parliament. The second, and perhaps more important, reason for the timescale is that we need to get this right. We are setting up an extremely important new body. I wanted it to begin its life after we had worked with several of the industry leaders to ensure that it is set up on a proper footing, so that it does not become a body that purely carries out desk-based research or a body that spends too much of its budget on running itself, and so that as much of its funding as possible can be designed to take forward the various challenges with which Pelamis, Aquamarine, Albatern and others have been grappling.
Two constant themes arose from the meetings and discussions, both with me and with Alex Paterson and his colleagues at HIE. They were, first, that almost all the players in the sector felt that there could have been benefits from a more collaborative approach with regard to specific areas, such as power take-off, and, secondly, that when we make our announcement we must apply the principle that WES’s modus operandi will be carefully guided by people with experience of the sector, of business and of the technology. We want it to be guided in the work that it does and in the deployment of its funding by the people who know what they are talking about. I was determined that that should be the case and that that model should be applied when it is set up.
I am conscious that there were a lot of questions that I may not have answered. As I always say, my officials will look at the Official Report, and if there are any particular questions of fact that I have not answered, I will ensure that they are dealt with. If members wish to seek further information on any points that they feel I have not sufficiently answered in the debate, I will be happy to deal with all of them, especially as there is a confluence of objectives in this chamber.
I will conclude with the promise that this Government will do everything that it possibly can, in every practical way, to make the dream of wave energy—a dream that has been almost converted into a reality of a reliable, efficient and steady stream of electricity that can become commercially capable of being developed—into a reality.
Scotland has some of the best potential wave resource in the world. More importantly, we have EMEC in Orkney—Mr McArthur’s constituency—and, around our coasts, particularly in the Highlands and Islands, we have communities that are committed to the support of wave energy. We will do our utmost to ensure that Scotland realises these ambitions for wave energy and, within the next five to 10 years, converts them into a reality, in a world-leading role.
Meeting closed at 17:51.Previous
Decision Time