Ministers have been criticised for an “abject failure” over its 2020 ‘green capital of Europe’ revolution which has produced as little as five per cent of the low carbon jobs it forecast.
The Herald on Sunday can reveal that what was initially a taxpayer-backed £70m investment fund to finance the offshore wind sector turned to what one union official described as “a farce” with just £6m paid out to one company promising 500 jobs in six years. And £2.44m of that had to be paid back the following year when it decided to exit the offshore wind sector.
While the Scottish Government was predicting 11 years ago that there would be 28,000 Scottish jobs in the offshore wind industry alone by 2020 as the nation takes advantage of its benefits – the latest workforce data for 2019 shows it stands at just 1400.
It comes as concerns persist over the continuing ‘mothballing’ of the UK’s only facility for manufacturing onshore and offshore wind towers in Machrihanish, Argyllshire, owned by South Korea-owned CS Wind UK.
It comes six months after administrators were formally appointed to take control of part state-owned Burntisland Fabrications (BiFab), the insolvent renewables manufacturer run from Canada seen as a key part of the future of Scotland’s wind farm revolution.
Deloitte took control of affairs of BiFab after it collapsed when the Scottish Government did a u-turn in backing the firm.
Two of the three BiFab fabrication yards – Methil in Fife and Arnish on Lewis – have since been bought out of administration by London-based firm InfraStrata. The former BiFab fabrication yard at Burntisland in Fife was not part of the deal and has since sprung back to life under Forth Ports ownership, with Aberdeen-based dive systems specialist Orca Oceanic Systems setting up an operations facility.
Unite Scottish Secretary, Pat Rafferty who has been fighting for a fairer deal over green jobs said:”It’s absolutely staggering that based on how the offshore wind sector is supposed to be the jewel in Scotland’s renewables revolution that only 1400 jobs were estimated to have been directly created in 2019.
“When you factor into that the dismal picture that the Scottish Government projected 28,000 jobs to have been created by now, and that only 400 more jobs have been created since 2014 then you begin to appreciate the abject failure of government policy at the Scottish and UK level.
“CS Wind in Machrihanish, which manufactures onshore and offshore wind turbines has been mothballed by its Korean owners.
“And we also have had the well documented challenges facing the BiFab yards in Fife and Arnish.
“However, what we don’t hear about is the success stories of Scottish based manufacturers and supply chain companies because there aren’t any. Billions of pounds worth of renewables contracts have been awarded with minimal benefits to local and regional supply chains which is why government action must be taken to enforce local content clauses into all contracts alongside strategic support for the those companies based in Scotland to develop and grow.”
Ministers championed the desire for the nation to cash in on low carbon in 2010 and 2011 – saying Scotland can be the “green energy capital of Europe” with a workforce rising to 130,000 and offshore wind alone bringing in an estimated £30bn in inward investment.
Office for National Statistics figures produced from a low carbon and renewable energy economy survey show that in Scotland there were just 21,400 jobs in the low carbon and renewable energy economy – including businesses specialising in offshore and onshore wind, hydropower, carbon capture, alternative fuels, energy efficient lighting, low emission vehicles.
Twelve years ago, the potential wind and marine energy power in the Pentland Firth – where the north-east Atlantic meets the North Sea – led the then Scotland’s First Minister Alex Salmond to dub it the “Saudi Arabia of Renewables” with BiFab at the time making turbines for offshore wind farms.
In November, 2010, First Minister Alex Salmond, first announced a £70m investment fund to finance the offshore wind sector.
He said it could create up to 28,000 jobs and add £7.1 billion in value to Scotland’s economy over 10 years.
Two months earlier, he told financiers that innovation and advances in clean green energy present a “pivotal turning point in human history”.
Opening the Scottish Low Carbon Investment conference in Edinburgh, he urged private finance leaders to seize the multi-billion pound opportunities arising from the renewable and low carbon technology revolution.
He unveiled an industry-led Offshore Wind Route Map, setting out the key actions required in the coming years to fully realise the huge potential around the coast of Scotland – estimated at that time to have a quarter of Europe’s potential offshore wind and tidal capacity and a tenth of its wave resource.
He announced: “This is more than a once-in-a-generation opportunity such as North Sea Oil and Gas was.”
The Scottish Government’s low carbon strategy published in 2010 described the large scale development of offshore wind as representing the “biggest opportunity for sustainable economic growth in Scotland for a generation” with Scotland having an estimated 25% of Europe’s offshore wind potential.
But the Herald on Sunday can reveal that the POWERS fund that was eventually launched in 2011 and overseen by Scottish Enterprise for £35m, only awarded one £6m grant during its six years.
Samsung Heavy Industries won the award in October, 2013 towards the £47m capital cost of building their 7MW prototype turbine at Energy Park Fife.
It was billed by Scottish Enterprise as the largest and most powerful offshore wind turbine who said it had the backing of Mr Salmond “whose government wants all Scotland’s electricity to come from renewables by 2020”.
The Korean company was said to have invested £70million in the Fife wind turbine demonstrator scheme, and Scottish Enterprise said it had the potential to create up to 500 jobs in Scotland.
Alex Salmond said of SHI’s move to base its first European offshore wind project in Fife in an inward venture championed as worth up to £100m: “I am extremely pleased to welcome this inward investment by SHI which further reinforces Scotland’s place in the development of the next generation of offshore wind turbines.
“Their choice of Scotland as their first base in Europe for renewable technology development is testament to the fact this country is fast becoming the European centre for research and development in new offshore wind technologies.”
Insik Roh, chief executive of Samsung Heavy Industries, said at the time: “The testing of the new 7MW offshore wind turbine at the Fife Energy Park signifies a milestone in the development of Samsung’s new wind turbine generator system. We hope to contribute to the Scottish economy through successful testing and certification of our cutting edge offshore wind turbine and ultimately through establishment of our manufacturing facility here in Methil.”
Scottish Enterprise announced at the time: “SHI said that, following a successful testing period, it will work to attract orders for its turbines. This would allow it to build a world-class manufacturing facility at Energy Park Fife.
“SHI, which wants to become a leading player in the European offshore wind sector, has been manufacturing 2.5MW wind turbines for four years and already has turbines installed in Korea, the US and Canada.
“It chose to base its European operation at Energy Park Fife because of the area’s growing energy cluster and the huge opportunities this presents for supply chain companies, particularly those involved in the offshore wind sector.”
But the 500 jobs did not materialise.
Scottish Enterprise says that in late 2014 the company took a “strategic decision” to exit the offshore wind sector and wind down its offshore wind business.
The turbine was acquired by the Offshore Renewable Energy Catapult in 2015 and rebranded the Levenmouth Demonstration Turbine. It currently employs five people.
Scottish Enterprise said that £2.44m of the £6m award was paid back saying: “It would have been as a result of Samsung not fully meeting the conditions of the funding.” It did not know how many jobs had been created by existing turbine.
Charles Thompson of Offshore Renewable Energy Catapult said: “Since ORE Catapult acquired the Levenmouth turbine in 2016, more than 200 small businesses have benefitted from its facilities and data to develop and demonstrate innovative products and services for the renewable energy market. It is a globally unique facility that directly helps Scottish businesses to grow in the fast-growing green energy industries.”
A Scottish Government spokesman said: “We are committed to supporting Scottish supply chain growth and to utilising every lever at our disposal to increase local content in offshore wind projects, and welcome the UK Government’s commitment to changes to the Contracts for Difference supply chain plan process. The introduction of Supply Chain Development Statements by Crown Estate Scotland, as part of the ScotWind leasing round, will help to release economic benefits for the Scottish economy and we expect developers to honour their commitments.
“Through our £100m Green Jobs Fund and other mechanisms at our disposal, we will make investments to support Scotland’s supply chain, empowering businesses and workers to take advantage of the opportunities arising from Scotland’s just transition to net zero.”
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