Scots firms lost out on multi-million pound contracts for Scotland ‘s wind farm revolution – after a ministerial summit was convened to end the “scandal” of Scots green jobs going abroad promised action, the Herald can reveal.
It has been confirmed that Paris-based GE Renewable Energy, a division of the Boston-based multinational General Electric, has been awarded a major project in the creation of one of the country’s biggest offshore wind farms, the £2 billion Neart Na Gaoithe (NnG).
And it is working collaboratively with two Dutch-based companies on the offshore wind farm project which is being jointly run by French state energy giant EDF and state owned Irish energy company ESB.
It has sparked a fresh row over Scotland’s green revolution being increasingly placed in foreign hands.
Unite Scottish secretary, Pat Rafferty, said: ”It was only last week that we welcomed the Scottish Government’s intention to ensure that local and regional supply chains would benefit from contracts in the renewables sector.
“Now we find out that American and Dutch-owned companies are feeding off the billions of pounds worth of work on the NnG contract when this work should be going to locally based companies such as BiFab who are ready and fit for purpose.
“The Scottish Government need to enact their local content clauses immediately to stop work being outsourced to international competitors.”
In November, the Herald revealed Scotland had already missed out on hundreds of millions of pounds of work in the creation of the wind farm off the Fife coast, before the latest development with unions furious at the way NnG is being handled.
In 2010, a Scottish Government report stated the offshore wind sector alone offered the potential for 28,000 direct jobs and a further 20,000 jobs in related industries, as well as £7.1bn investment in Scotland by 2020.
Now GE Renewable Energy has confirmed it is overseeing the project for the design, supply, construction and commissioning of onshore and offshore wind substations for the NnG development.
It will be responsible for the delivery of all infrastructure within the perimeter of the project, including ground works and civil construction.
And the French firm says it will act in a “consortium arrangement” with two Dutch firms, platform construction experts HSM Offshore BV and engineering company IV-One.
GE says HSM will provide an offshore topside platform designed by IV-One that will house its 220kV and 66kV substations.
The project’s onshore and offshore substation equipment which will include four power transformers and four reactors will allow for 450 megawatts (MW) of low carbon energy to be connected to the Scottish electricity grid.
In a circular, Gerhard Seyrling, GE’s Grid Solutions president & chief executive for Europe, Russia & the Commonwealth of Independent States (CIS) said: “GE’s Grid Solutions business is very proud to work with our consortium collaborators to support both shareholders in their growing portfolios of onshore and offshore wind farms as well as to help deliver low carbon electricity generation in the UK.”
On Thursday a summit over what union chiefs describe as a “renewables scandal” which has increasingly placed Scotland’s green energy revolution in the hands of overseas firms led to new measures promised by the Scottish government designed to increase the number of offshore wind contracts staying in Scotland.
The government announced that developers will have to agree on supply-chain commitments when applying for offshore wind leases in an effort to protect domestic jobs.
Economy Secretary Derek Mackay said on Thursday: “Scotland is the ideal location for offshore wind, but recent projects have not delivered the significant economic opportunities we want to see for Scottish businesses.
“The Scottish Government has been calling for the offshore sector to do more by awarding contracts to our indigenous supply chain but recent disappointments suggest that more has to be done.
“I will use every lever at our disposal to ensure that our renewables supply chain benefits from the expansion of offshore wind in our waters, leading to the creation and retention of Scottish jobs.
“The measures agreed with Crown Estate Scotland will help to release more of those economic benefits for the Scottish economy and ensure that the Scottish-based supply chain is considered when tendering for work or making long-term conditions.”
In discussing the NnG deal, GE Renewable Energy said: “Wind power is Scotland’s fastest growing renewable energy technology. Some say that the country is in the midst of a ‘wind energy revolution’. Figures from Weather Energy show that between January and June of 2019, wind turbines in Scotland provided enough electricity to power the equivalent of 4.47 million homes—almost twice the entire country’s domestic power requirements.”
GE Renewable Energy said the deal “brings together collaborative expertise to flexibly deliver significant efficiencies to EDF Renewables and ESB” and that the project will help deliver low-carbon energy to 375,000 Scottish homes.
The Herald understands it has still not been decided whether Scotland will get a cut of a key contract to build the 54 steel foundation jackets which anchor the turbines to the seabed. It has been proposed that eight might be built in Scotland with the rest being constructed in south east Asia.
The £640m Saipem turbine jackets deal will mean Canadian-owned Burntisland Fabrications (BiFab) yards in Arnish and Fife continuing to lose out in the “green manufacturing revolution” getting no more than an estimated 15% of the valuable and crucial manufacturing work. Saipem will also supply and install an additional two jackets for offshore substation.
The Herald understands that as of Wednesday, no decision had yet been made on how the turbine jackets work was going to be spilt, if at all. BiFab, which employs around 1,400 workers was rescued from the brink of administration by the Scottish Government with a loan valued at £37.4m, but then was purchased by Canadian firm DF Barnes, although hundreds of jobs were shed.
The workforce is now estimated to then stand at just 115 So far the only new confirmed jobs Scotland would gain is 50 over 25 years, at a new maintenance base at Eyemouth harbour.
In a separate NnG contract worth nearly £100m, the Milan-headquartered telecom and electricity cable group Prysmian will produce and supply submarine cables at its ‘centre of excellence’ in Pikkala, Finland. Further land cables will be manufactured in Gron, France.
Further parts for the turbines are being produced in Hull, and Cuxhaven, Germany.
The wind farm project is due to be completed in 2023 and will provide power for 375,000 homes, with offshore construction to start in June 2020.
More than 30 attended the two-hour offshore wind supply summit at the Hilton Edinburgh Carlton in Edinburgh on Thursday which was chaired by Mr Mackay.
The Scottish Government had to shift the event from the Scottish Enterprise’s Apex House headquarters due to the numbers wanting to attend.
It came after Unite, one of the country’s biggest unions, called for steps to regain control of the sector earlier this month because of a “smorgasbord” of multinational interests now “calling the shots” in the wind farms sector in Scotland.
Unite representatives met finance secretary Derek Mackay in December following concerns that the first 22 jobs at the beleaguered South Korean-owned CS Wind factory near Campbeltown in Argyll have gone – with threats to a further 51 out of a workforce of 94.
It emerged in November that the Scottish Government’s economic and community development agency, Highlands and Islands Enterprise (HIE), moved four years ago to offload the taxpayer’s 19 per cent stake in Argyll firm Wind Towers (Scotland) – which owns the UK’s only facility for manufacturing wind towers – to CS Wind, which took over operations. CS Wind papers seen by The Herald showed that a £461,920 taxpayer-funded loan from HIE was also waived.
Scotland’s Energy Minister, Paul Wheelhouse, said: “We are doing everything within our existing, limited devolved powers to retain and boost job numbers and increase the Scottish presence in offshore wind projects. This includes efforts to support the local supply chain to improve its competitiveness in winning work for the construction phase of projects and to maximise the economic impact of operations and maintenance activities over the lifetime of the project as well.
“Renewable energy developments are a vital part of Scotland’s transition to a low carbon economy, which is why last week we reconvened the offshore wind summit with representatives from the UK government, trade unions, companies and other interested parties who agreed to take urgent action to ensure more Scottish companies benefit from the awarding of contracts for offshore wind projects.
“This includes ensuring developers agree on supply-chain commitments when applying for offshore wind leases, under an agreement between the Scottish Government and Crown Estate Scotland. This measure will help release further economic benefits and ensure the Scottish-based supply chain is considered when tendering for work or making long-term conditions.
“We continue to call upon the UK Government to consider how the Contract for Difference (CfD) process can be restructured to consider the value added to the Scottish and UK economies and to encourage wider and more meaningful use of the Scottish and UK’s supply chains.”
Meanwhile EDF Renewables and ESB is setting up a series of “supply chain events” to showcase how more Scottish companies can help support the successful delivery of the project.
The events will be held in Aberdeen, Dundee, East Lothian and Fife in the first week of March 2020.
Matthias Haag, NnG Project Director, said: “NnG is a fantastic project for Scotland and we are confident that the Scottish supply chain can play a big part in supporting EDF Renewables and our Tier 1 contractors in delivering this project successfully.
“We want to maximise the local supply chain and employment opportunities as much as we can and that is why we are hosting these supply chain events in March as it will allow our Tier 1 contractors to give the supply chain a detailed insight of the project.
“We would really appreciate hearing from any local businesses who are interested in NnG and who feel they have something to offer the project. I would encourage as many businesses as possible to come along to these supply chain events in March.”
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