January 24, 2022
Scotland

Scotland to lose out out billions from offshore wind project auction, think-tank warns

By Martyn McLaughlin | The Scotsman | Sunday, 23rd January 2022 | www.scotsman.com

Overseas firms and foreign governments are set to reap a multi-billion pound windfall from major offshore wind projects around Scotland’s coastline due to the Scottish Government’s failure to create a state-owned national energy company, a think-tank has warned.

Last week’s ScotWind auction by Crown Estates Scotland of seabed plots raised just under £700 million for the public purse, with First Minister Nicola Sturgeon hailing the scale of the opportunity as “truly historic”.

The tranche of new projects, which will deliver more than triple the offshore wind energy needed to power every home in the country, saw private firms such as BP Alternative Energy Investments and Shell New Energies pay tens of million pounds to secure the rights to create offshore developments.

But Common Weal. the pro-independence think-tank, warned Scotland risked “repeating the mistake” of its history with oil by selling the rights, instead of owning the means to generate and supply electricity at a state level.

It said Scotland had “fallen badly behind” in the race to become a leading developer of renewable energy generation, and should not resort to celebrating “when a few crumbs fall off the table for us to pick up”.

The think-tank’s analysis of the portfolio of ScotWind projects suggested it could generate an annual pre-tax profit of between £3.5 billion and £5.5bn. The upper range, it pointed out, accounts for more than a tenth of the existing Scottish Budget.

The awarded sites, which predominantly span the north-east coast, have a combined potential generating capacity of 25GW. The Scottish Government said the projects were expected to secure at least £1bn in supply chain investment for every 1GW of capacity proposed, in addition to the £700m in option fees.

It added the development would help complete Scotland’s own journey to net zero, create thousands of jobs, and potentially position Scotland as a major exporter of renewable energy, including green hydrogen.

However, Craig Dalzell, head of policy and research at Common Weal, said: “Had Scotland launched a national energy company capable of owning ScotWind, it would have been well placed to deliver billions in profits to Scotland every year that will now instead be shipped overseas to private shareholders or invested in the public services of those countries who have deployed their own nationalised companies in Scotland.

“Scotland must build up that capacity now so that it is ready to capture the results of the next energy auction and can position itself to nationalise ScotWind assets when their leases are poised for renewal.”

A Scottish Government spokesman said money generated would be invested to help tackle “the twin climate and biodiversity crises”.

The spokesman said: “Current market volatility and the ongoing reserved nature of powers on energy regulation and the energy market mean that now is not the right time for a retail-based public energy company.

“As the First Minister said in Parliament, a national public energy company that is involved in major energy generation would only be possible in an independent Scotland where we had full powers over the energy market and full access to borrowing.”


URL to article:  https://www.wind-watch.org/news/2022/01/24/scotland-to-lose-out-out-billions-from-offshore-wind-project-auction-think-tank-warns/