The next item of business is a statement by Gillian Martin on offshore wind. The cabinet secretary will take questions at the end of her statement, so there should be no interventions or interruptions.
14:23
Offshore wind development presents an era-defining opportunity to grow our green economy for the benefit of communities across Scotland while supporting our energy security and our journey towards net zero.
Through our world-leading ScotWind and innovation and targeted oil and gas—INTOG—leasing rounds, Scotland is at the forefront of offshore wind development globally, with a potential project pipeline of more than 40GW. That is more than 40 per cent of the United Kingdom’s total pipeline, which is one of the largest in the world.
Our abundant natural resources, world-leading subsea engineering capabilities, strong skills base in oil and gas production, and extensive potential pipeline of projects mean that we are uniquely positioned to lead the global charge on offshore wind and to be at the heart of Europe’s energy transition for decades to come.
Most importantly, Scotland’s offshore wind journey is about opportunities for the people of Scotland: opportunities for our communities and our workforce; opportunities for our young people who are just starting out in their careers; opportunities for supporting a just transition; opportunities for reinvigorating coastal communities; and opportunities for growing our economy in a sustainable way.
Although I acknowledge the uncertainty that global market dynamics—including the decisions by some to pivot away from renewables—are currently bringing to the offshore wind sector, there should be no doubt that offshore wind remains one of Scotland’s most significant economic opportunities and our key competitive advantage in the energy transition. Indeed, as several recent strategic acquisition and investment decisions by committed developers have demonstrated, it is clear that there is confidence in Scotland’s offshore wind market.
The Scottish public sector continues to be steadfast in its backing of the offshore wind industry. The Scottish National Investment Bank’s investment in the Pentland project, which was announced yesterday, sends a clear signal to the market that floating wind technology is of critical importance for Scotland’s energy transition, our supply chain and our economy. It also marks the bank’s and the United Kingdom National Wealth Fund’s first joint investment.
Our pipeline of offshore wind projects continues to turn potential into reality. For example, the Moray West and Neart na Gaoithe offshore wind farms became fully operational earlier this year. They have a combined capacity of 1.3GW, which is enough to power more than 1 million homes. In addition, Inch Cape offshore wind farm is now under construction. The company took me through its plans at Montrose port the week before I stood alongside its micropiles on the quayside at the port of Leith as I launched the climate change plan.
We estimate that the potential capital value of the Scottish offshore wind market could be around £100 billion, given full deployment of the potential pipeline. We are in a unique position to maximise that potential and build on Scotland’s already strong reputation as a destination for offshore wind investment.
A key ingredient is our approach to leveraging wider investment. In the past 18 months alone, we have invested around £150 million in the offshore wind supply chain and ports. That has leveraged around £740 million of wider investment in 10 projects, which have the potential to support around 5,000 jobs in communities across Scotland, including at Ardersier, Montrose, Scapa, Lerwick, Nigg and Kishorn.
Scotland has already seen significant commitments from capital and inward investors. The development at Ardersier port, which has the potential to support around 3,000 jobs and reskilling opportunities, is one of the largest regeneration projects in the Highlands for decades. Forth Ports has invested £150 million in expanding offshore wind capabilities. Sumitomo is investing £350 million in a subsea cable factory, which is projected to support around 330 jobs over 10 years, and, just last month, Mitsui & Co Europe Ltd and MOL—Mitsui OSK Lines Ltd—announced plans for a multimillion-pound upgrade at the Port of Nigg. I was glad to meet them last month.
One of the most significant opportunities lies in the offshore wind industry’s ability to support well-paid, secure and sustainable employment for people across Scotland. As it continues to grow, the offshore wind sector is providing opportunities to those who are entering the job market for the first time, as well as those who want or need to change careers as part of a just transition.
Last week, we published “Scotland’s Offshore Wind Skills Priorities and Action Plan”. Developed in partnership with industry and public sector partners, the plan sets out initial actions that are to be taken over the next two years to support the pipeline of skilled workers that will be needed by the offshore wind sector right across Scotland.
The actions build on existing work that is aimed at upskilling Scotland’s renewable energy workforce, which includes the recently launched energy transition skills hub and the oil and gas transition training fund, which is supporting our valued oil and gas workers to retrain and upskill and move into new renewable energy job opportunities.
We are also working hard to manage the marine space in a planned way that ensures that the interests of the marine environment and all marine users, including our valued fishing sector, are properly considered. That is central to our considerations as we update the sectoral marine plan for offshore wind energy and work to support the delivery of strategic compensation and a Scottish marine recovery fund.
I am, of course, fully aware that where there is an opportunity to be realised there will also be challenges that need to be overcome. Current global market dynamics are bringing uncertainty, which is exactly why the Government chooses to back the sector and provide it with the regulatory, policy and investment stability that it needs to grow.
However, action also needs to be taken by others. We continue to work closely with the UK Government on our shared ambitions around clean power to deliver economic growth and energy security and to support net zero ambitions, but we need action on critical issues that relate to reserved powers. To secure project delivery in Scotland, the UK Government must prioritise the reforms that are necessary to make transmission charges fairer so that there is a level playing field for Scottish projects, and it must bring forward grid connection dates. A lack of certainty on network connection dates and the unfair transmission charging regime are the most significant barriers to the delivery of Scottish offshore wind projects.
This year’s contracts for difference allocation round 7 is a pivotal moment to inject fresh momentum into Scotland’s offshore wind sector and build on the strategic investments in our supply chain that have been made to date. In my ask of the UK Government I have been clear that the final budget for allocation round 7 must facilitate the deployment of fixed and floating offshore wind projects in Scotland while ultimately keeping prices affordable for consumers. Let us be clear that an underfunded auction would jeopardise the delivery of Scotland’s offshore wind pipeline, undermine investor confidence and risk pushing investment and jobs that are of critical importance, not least to those in the north-east, towards other markets.
We will continue to work constructively with the UK Government and other partners to ensure that Scotland’s offshore wind sector reaches its full potential, because we all need to play our part. It is imperative that all of us, as Scotland’s elected representatives, advocate for the sector, given the size of the prize for our economy, energy security and net zero ambitions. In doing so, we will reinforce to investors that Scotland is a prime destination for investment in offshore wind projects, supply chain and infrastructure.
Offshore wind offers not just an energy solution but a huge economic and social opportunity for the people of Scotland. Although I acknowledge that there are challenges to be overcome, the fact remains that Scotland is seen globally as a country that is leading the way and one from which others can learn; a country that is doing everything within its power to deliver the benefits that our tremendous potential pipeline of offshore wind projects represents, and in a way that ensures that the environmental impact and the interests of all marine users are properly considered; and a country that is working hard to deliver sustainable opportunities for our supply chain that translate into good-quality, well-paid jobs for the people of Scotland and support prosperous, sustainable communities.
The opportunity before us all is vast. Let us continue working together to seize it.
The cabinet secretary will now take questions on the issues raised in her statement. I intend to allow around 20 minutes for those, after which we will move on to the next item of business.
I thank the cabinet secretary for advance sight of her statement, but it seems rather tone deaf of her to come here and talk about the jobs of tomorrow when jobs of today are being lost at Mossmorran and right across the North Sea oil and gas sector, with the Government’s presumption against new oil and gas. However, north-east fishermen will be dismayed to hear that the Government wants to sell our fishing communities down the river yet again, given the announcement. With it, the Government is sticking two fish fingers up to our fishermen. The scale of these projects is massive, and each and every time a new project is consented, it severely restricts where our fishermen can fish. What fishermen are asking for is simple—protection from reckless spatial squeeze, recognition that fishing must remain an integral part of Scotland’s future, and a moratorium on new offshore wind until the full impact on our fishing grounds is fully understood. Will the cabinet secretary urgently get around the table with our fishermen to ensure that they are not sacrificed on this Government’s ideological pursuit of net zero, and will she also instruct developers to engage constructively with our fishermen to ensure that they are properly compensated for their loss of fishing grounds?
If I am in ideological pursuit of anything, it is prosperity and economic growth for the people of Scotland. It is a little bit strange that an energy spokesperson from another party, who would like to be standing where I am right now, would completely and utterly miscall a huge part of the energy sector and not give it support. It is astonishing that someone who represents the north-east, and who wants to continue to represent the north-east, would say to the people of that area that he is not interested in the future of the North Sea’s floating offshore wind or offshore wind. [Interruption.]
Mr Lumsden.
It is a very strange attack, but I am not in the business of giving political advice to Douglas Lumsden.
I meet representatives from the fishing industry regularly, and I meet Elspeth Macdonald from the Scottish Fishermen’s Federation regularly. I saw her this week, albeit informally. We have a fundamental role to play in managing the marine space. We are clear that the expansion of offshore wind must be achieved sustainably and with the consideration of other industries. The sectoral marine plan, which we are currently updating in consultation with all interested parties, is underpinned by comprehensive impact assessments that identify opportunities—[Interruption.] Deputy Presiding Officer, It is very difficult to deliver the answer.
I get that. Please resume your seat for a second. I am a bit weary of all the sedentary chit-chat. When a member has the floor, that is the member whose voice we want to hear. We do not want to hear any other voice.
The sectoral marine plan is underpinned by comprehensive impact assessments that identify opportunities and constraints for development. Those assessments are informed by the latest scientific evidence and extensive stakeholder engagement, including that from the fishing sector.
I thank the cabinet secretary for advance notice of her statement. Shell has returned its CampionWind lease to Crown Estate Scotland. Is she worried that other leaseholders are considering handing back their licences? What will she do to develop confidence in offshore wind and its supply chains and to promote new manufacturing?
The cabinet secretary referenced the Pentland project with investment from Great British Energy, the National Wealth Fund and the Scottish National Investment Bank, each of which has the option to invest up to £50 million. Does the Scottish Government have a plan to ensure that we will see more of that funding to get training opportunities and to create permanent jobs and investment?
Feedback from the renewables sector is that speeding up planning decisions is crucial to building investment confidence so that we can get manufacturing investment in Scotland rather than importing renewables components. For example, manufacturing renewables components at the port of Leith would be a huge opportunity. What is the Scottish Government doing to deliver on that ask? When will we see the energy strategy and the just transition plan?
I was going to praise Sarah Boyack for being a spokesperson who understands the economic value of what we are trying to do. Her Government in London has had a strong record of championing this area since it came into government, along with the Scottish Government; it is one of the areas of agreement that we have.
Where we do not have agreement is on the impact of the energy profits levy on confidence. Some very interesting work was done on the EPL by Offshore Energies UK, which put a proposal to the UK Government to set out how it can get more funds into the Treasury as a result of a reformed EPL. I hope that Scottish Labour has looked at its proposals and is advocating for them to be taken forward in the budget. People from the offshore wind sector and other energy companies tell me that that is the single biggest blocker to investment. However, I am still hugely confident that we will see ScotWind projects develop.
Obviously, Shell has made a different decision. It has, more generally, pivoted away from renewables projects because it wants to concentrate its operations on oil and gas. That is highly regrettable, but after the decision was made, I had a call with Crown Estate Scotland. It told me that there is interest in that licence and that it is confident that it will have new tenants, which is hugely encouraging. It told me that it was one of the most sought-after areas in the ScotWind round of licence auctions. It said that, apart from reaching out to organisations that were interested during the first round, it has had contact from interested partners.
Sarah Boyack mentioned some of the projects that are progressing.
Cabinet secretary, I ask for a wee bit more succinct approach. Otherwise, we will not get through all the members who wish to ask a question.
I am happy to leave it there.
The cabinet secretary will be aware that more than half of ScotWind projects are floating offshore wind projects. Given the technological challenges in that sector, it is essential that, to support its deployment, we attract the blade and cell manufacturing for floating offshore wind to Scotland. Given Mingyang’s proposals for an integrated offshore wind production facility in Scotland, what engagement has the Scottish Government had with the company to support that investment? Will it engage with the UK Government to ensure that decisions are made in support of that proposal at pace, in order to allow that investment to go ahead?
We welcome Mingyang’s smart energy proposals for the £1.5 billion investment in a new turbine manufacturing facility at Ardersier port. The Deputy First Minister and I have been making representations in support of that, in exactly the kind of cross-Government deliberations that the member would expect.
It is not just the offshore wind supply chain that will yield a great amount of economic activity for Scotland, although, as I outlined in my statement, that is where the real prize is. The cable manufacturers that we are attracting to Scotland should also be considered when it comes to the transmission cabling that is required. That is happening right now. I wrote to the UK Secretary of State for Energy Security and Net Zero about the fact that the National Energy System Operator has no local procurement conditions around transmission cabling. That would provide a great deal of comfort to those who are willing to base themselves in Scotland and give them additional orders that would turbocharge their investments and create economic value locally.
I want to bring this back to the voice of local people. A few weeks ago, I asked at First Minister’s question time how local people could engage on the proposed Moray FLOW-Park plans. Last week, 600 people crammed into Universal hall in Findhorn and Nairn community centre to put their views across. Murray Sampson of Moray Firth Wind Sports asked a question that is relevant not just to this project but to many projects. “Can we bring it back to basics?”, he asked—“Look at Nairn, Findhorn, Burghead. Look at the beauty. Is there anywhere that the Crown Estate looks at and just says, ‘No way’?” Today, I bring the voice of far more than the 600 people who were in the room with me last week—I bring the voice of fishermen and communities who do not feel listened to. Just like Murray Sampson did, I ask the cabinet secretary whether she ever hears the concerns of local people and just says, “No way.”
I think that anyone in my position, whether it is a Labour, Scottish National Party or Conservative energy secretary, would adhere to the processes that are set out in UK and Scottish legislation on anything to do with planning.
On the development that Mr Eagle referred to—Moray FLOW-Park—no marine licence applications have been submitted. The project remains at a very early stage, although I believe that exploratory surveys have been undertaken by the developer. The developer is encouraged to engage with stakeholders and the local community. Such engagement is the very least that we should expect. Until an application comes in, I will not be in receipt of all of the developer’s plans. The consenting around the development will have to be undertaken thoroughly and rigorously. I do not think that anybody standing in my position, of whatever party stripe, would, without any knowledge of a development, applications or impact assessments, make a judgment on a project, whether it is based in the marine environment or terrestrially.
Neart na Gaoithe, Inch Cape and Berwick Bank come on shore or will do so in my constituency, East Lothian. The cabinet secretary recently visited Had Fab in my constituency to highlight successful contract awards. Had Fab is a successful fabrication company in East Lothian, employing many local people and local apprentices. What more can be done to grow local supply chains and all tiers of procurement through offshore wind farm development?
When I was at Had Fab with Paul McLennan, Martin Whitfield and the former Secretary of State for Scotland, it was to celebrate a contract that the company had won for manufacturing. However, I was there previously to meet its many apprentices, and I was blown away by their enthusiasm for the fact that manufacturing was happening in their locality and that they would, effectively, have jobs for the rest of their lives.
On what Paul McLennan said about ensuring that we have more manufacturing in Scotland, we have £500 million invested in the offshore wind supply chain across five years. That money is for not only the development of supply chains but the pivoting of existing ones, because Scotland’s unique selling point is that we have a vibrant energy supply chain already. At the moment, the order books for many of those companies are largely oil and gas related, but they are pivoting towards renewables opportunities. They will pivot back and forth for years to come, so, as part of the ScotWind licensing obligations, there has to be local procurement. That was the smart thing to do. I would like to see it happen for transmission infrastructure as well.
I thank the minister for advance sight of her statement.
Continued uncertainty and chaotic decision making from private offshore renewables developers are harming workers and communities in the North East Scotland region. The mismanagement of UK oil and gas revenues by the privatised fossil fuel industry means that workers now face an unsure and unjust transition. It is critical that we do not repeat the same mistakes with offshore renewable energy.
One of the key recommendations in the Future Economy Scotland report “Rethinking ScotWind: Maximising Scotland’s Offshore Wind Potential” was for the Scottish Government to explore taking public equity stakes in offshore leasing and development. Does the cabinet secretary recognise the considerable long-term benefits that up-front investment from the Scottish Government would bring to renewables development? Will she ensure that the people of Scotland benefit from our common natural resources?
I found very little to disagree with in Mercedes Villalba’s question. I absolutely stand behind a lot of what she said.
ScotWind licences are available, but as licences in other areas for other projects in the future are granted, whether they be onshore or offshore, there will be an opportunity for Governments to take a stake in them. That is the right thing to do. In relation to onshore projects, I point out that, more recently, I have ensured that local communities have first option on repowering opportunities for wind farms on the Forestry and Land Scotland estate. I had in mind the ethos that Mercedes Villalba mentions.
If the transition is to be just, the wealth that is associated with the generation of energy should go to the people of Scotland who are hosting all the infrastructure. That should be in the form of not just community benefits but equity stakes. Fundamentally, developers should not wait for legislation on that; they should offer opportunities for communities to benefit from the funds that are generated as a result of production. They do not have to wait for Government to tell them to do that. It is the right thing to do and the way to get people on side for their developments. I would say that it is the smart thing to do
A number of members who have pressed their request-to-speak buttons have still not been called. I wish to take all of them, but I need more succinct questions and answers.
Ensuring that we retain the workers and the skills for the green energy transition is integral to the success of new projects. However, only this week, the chief executive of Flotation Energy warned that the UK Government’s energy profits levy was
“wiping out 1,000 oil and gas jobs a month—losing many of the workers whose skills”
are
“needed for renewable projects”.
Does the cabinet secretary share my concerns that Labour’s energy policies are continuing to jeopardise Scotland’s just transition?
I would go further than that: Labour’s energy policy with regard to the EPL is not just Labour’s energy policy but the energy policy that the Conservatives had. They are turning their backs on taking responsibility for that.
During portfolio question time, I mentioned that Offshore Energies UK has worked across the sector to put together a proposal for the UK Government that would generate more funds for the Treasury while making investment in projects and, indeed, in the decommissioning of projects more viable for oil and gas companies.
Let us face the fact that many of the oil and gas companies about which we are talking, with notable exceptions, are also investing in ScotWind projects.
I share the member’s concerns. There is a knock-on effect. The EPL is disproportionate. Indeed, it feels to me like a tax on the north-east, because it is jobs in the north-east that are being taken away. Everybody who has talked about the job losses is absolutely right. It was also supposed to be a temporary measure.
In the upcoming UK budget, there is an opportunity to unlock investment and certainty in the whole energy mix. I really hope that Rachel Reeves takes up OEUK’s offer. It is a sensible and very carefully worked out offer, and I urge her to read it.
I make another plea for more succinct answers, cabinet secretary.
Only those who want to rip up the Climate Change (Scotland) Act 2009 and drag us back to the 20th century would fail to recognise the incredibly powerful role that offshore wind could play. However, we are in danger of repeating a missed opportunity in the development of onshore wind. Unlike some European countries that have managed to ensure a high proportion of public and community ownership of onshore wind, Scotland’s community ownership is marginal.
How does the Scottish Government intend to ensure that we do not repeat that missed opportunity? Instead of merely asking the developers to make a voluntary contribution to community benefit, how do we intend to lock in public ownership and community ownership?
There are a number of things to say, but I have been asked to be succinct. We have the community and renewable energy scheme Scotland, into which we have put additional money, so that we can meet demand for community ownership of renewable energy. I mentioned to Mercedes Villalba the repowering opportunities. I am giving first options to community groups that want to take up those options.
Patrick Harvie made a good point about where the powers lie for mandating community benefits, which could include community ownership or part ownership. They lie with the UK Government. I am pleased to say that, where the Tories turned their back on communities and did not take up that option when they were in power, the current Government—[Interruption.]
Mr Lumsden! Cabinet secretary, please resume.
The current Government is at least consulting on the matter. I am hopeful that the consultation will confirm what the Scottish Government has been saying for years, which is that communities must have more tangible benefits.
My colleague Jamie Greene asked for this statement last week, following news of Shell handing back its lease. I do not disagree at all with the cabinet secretary about the importance of ScotWind, not least in relation to its economic potential for our country. However, Shell’s decision is a concern.
What discussions have been had with Shell about the basis for its decision, and what discussions have been had with the winners of other leases to see whether Shell’s concerns are felt more widely? What action will the Government take on the back of that?
I have had discussions with Shell. In recent months, Shell has made it clear that it is pivoting its business towards oil and gas. That is extremely regrettable. It is not for me to give Shell advice on commercial decisions, but it has made that unfortunate decision. However, I do not think that that takes away from the fact that a great deal of other developers are pressing on with their developments.
Liam McArthur will have heard me say that I had discussions with Crown Estate Scotland, which was able to tell me that it already has interest in the CampionWind area. I mentioned in previous answers that the licensable CampionWind area was one of the most sought after in the initial round, so I have complete confidence that other companies that have not pivoted away from their renewables ambitions will be looking at that as an option now that Shell has released its licence back to Crown Estate Scotland.
The recent Pentland offshore wind farm investment announcement clearly highlights the huge economic opportunities of pursuing net zero. Given the huge number of jobs—more than 1,000—that it will support and the substantial contribution that it will make to our economy and energy supply, does the cabinet secretary agree that Pentland also illustrates well the opportunity to secure a strong, just transition? Might related investment opportunities be put at risk by those who would talk down our net zero ambitions, including some in the chamber?
Bob Doris makes a very succinct point, as did Patrick Harvie, Sarah Boyack and Liam McArthur: offshore renewables provide Scotland’s future economic growth opportunities. Those who sit here and give out misinformation about that or who do not support it are not supporting future jobs in Scotland.
I agree that energy transition will deliver jobs, growth and energy security. Talking down that huge opportunity risks delaying action. I am delighted that those in the Parliament who talk down such an opportunity are in a very small minority.
The cabinet secretary talked in her statement about the size of the prize, but the fact is that the fixed costs of renewables are still massively subsidised, with huge costs being passed on to the consumer. Seagreen alone has earned £48 million with no output. Will the cabinet secretary assure us that developers that are in receipt of public money actually produce energy for public consumption?
Here is another individual who cannot get behind the renewables industry or recognise the economic opportunities for Scotland. Green electricity is the cheapest—[Interruption.]
Please resume your seat for a second, cabinet secretary.
I have already spoken about my weariness with the constant barracking from sedentary positions on the Conservative side of the chamber. It is neither courteous nor respectful.
Green electricity—the electricity produced by renewables—is the cheapest form of electricity. There are issues with transmission charges, with the transmission network use of system charges and with the contracts for difference, which I have mentioned already. We have asked the UK Government look at those issues because we want to ensure that there are favourable terms in the auction round.
We need a rebalancing of electricity and gas prices, without which it will become difficult for us to decarbonise. My predecessors and I have been advocating for that for some time. It desperately and seriously needs to be looked at, and I know that I have a great deal of support in that regard from many inside and outwith the chamber.
It is very welcome that more than 1,000 jobs are expected to be created and supported throughout the construction and operation of the Pentland offshore wind farm. Will the cabinet secretary explain how the Scottish Government is investing in Scotland’s skills base to ensure that the people of Scotland continue to benefit from jobs for the future?
I am happy to do that. More than £120 million has been invested in the north-east through the just transition fund and the energy transition fund to support the region’s transition to net zero. The offshore wind industry has the potential to create thousands of well-paid jobs.
As I said in my statement, we published “Scotland’s Offshore Wind Skills Priorities and Action Plan” last week, and David Torrance will have seen that the First Minister has opened the energy transition skills hub. That went down very well in my home city of Aberdeen, where we are seeing a great deal of demand for training, not only from young people who want to come into the industry but from those who want to transition out of other areas of work.
Households and businesses are already struggling with high energy bills, and offshore wind projects come with enormous costs. What assessment has the Scottish Government made of the impact on consumers of replacing affordable oil and gas with expensive and heavily subsidised offshore wind?
Offshore wind may be subsidised at the moment, but it has the potential to be the greatest opportunity for energy security that the UK as a whole will ever have. It is strange to talk about subsidy without mentioning nuclear power, which is the most heavily subsidised form of energy in the whole of the UK. I will leave that there.
A 40GW pipeline of potential projects is both welcome and massive, and is a fantastic opportunity, particularly once we add the development in the rest of the UK. We know that 35 per cent of embodied carbon can be saved if new turbines are manufactured using recycled content and that 95 per cent of turbines can be recycled. Will the cabinet secretary commit to supporting the creation of a decommissioning hub here in Scotland?
I thank Maurice Golden for being one of the more sensible Conservative Party voices on energy, although I do not know whether that will embarrass or delight him.
Maurice Golden pointed to another economic opportunity. As part of our onshore wind sector deal, we committed to working with the sector on blade remanufacturing. I would be happy to speak to him about any projects that he thinks would be worth while, because his suggestion sounds eminently sensible and would be another economic opportunity, so I thank him for it.
That concludes the statement. There will be a short pause before we move to the next item of business.