Winners & Losers: Scotland Leases Out Its Seas

There has been a mixed response to the announcement, 17th January 2022, by Crown Estate Scotland of the leases for the massive future development of Offshore Wind in Scotland’s waters.

In a statement by the Scottish Government – “17 projects, with a combined potential generating capacity of 25GW, have been offered the rights to specific areas of the seabed for the development of offshore wind power – with developers giving commitments to invest in the Scottish supply chain, providing opportunities for high quality green jobs for decades to come.”

 First Minister Nicola Sturgeon has described the auctioning off of the rights as ‘transformational’. She said:

“People working right now in the oil and gas sector in the North East of Scotland can be confident of opportunities for their future.  The spread of projects across our waters promises economic benefits for communities the length and breadth of the country, ensuring Scotland benefits directly from the revolution in energy generation that is coming.

“The scale of opportunity represented in today’s announcement exceeds our current planning assumption of 10GW of offshore wind – which is a massive vote of confidence in Scotland. So we will now embark on the rigorous consenting process required to make sure we can maximise the potential that clearly exists in offshore wind while also ensuring that the impacts of large scale development  – including on other marine users and the wider natural environment – are properly understood and addressed.

“While it is not yet possible to say with certainty what the scale of development will ultimately be, there is no doubt that the scale of this opportunity is transformational – both for our environment and the economy.”

The auction was a bargain sell off – what had been estimated as ‘up to’ £890 million 10 GigaWatts of capacity – in the end two and a half times as much (24 GigaWatts) was sold off for significantly less (£699 million).

Commenting on the sell off in ‘Scotland gives away its energy future‘, Robin McAlpine said:

“The biggest winner is BP – and Shell also features at number four in the list, so Big Oil is now a permanent resident in Scotland’s waters.

“Of the rest the big winners in terms of the control of Scotland’s renewables futures are (in descending order) UK, Italian, Swedish, Belgian, Spanish, Spanish (again), UK, Canadian, Norwegian, Canadian (again) and Spanish (again). None of the successful bids went to companies registered in or owned by Scotland”

Simon Hodge, Chief Executive of Crown Estate Scotland, said:

“Today’s results are a fantastic vote of confidence in Scotland’s ability to transform our energy sector.  Just a couple of months after hosting COP26, we’ve now taken a major step towards powering our future economy with renewable electricity.  “

Here is more detail about the successful buyers: Successful Projects

The Scottish Greens who are in a ‘coalition’ Government with the SNP are delighted with the result.

Steve Sankey the Scottish Greens Councillor in Orkney Islands Councils has said that there are “clear benefits to Orkney’s future economy and a speedier progress to net-zero.”

He said:

“This announcement is truly excellent news and will transform our future economy, away from fossil fuels and towards a wholly renewable future and net-zero. It’s particularly pleasing that Flotta has won a tender to commit to large-scale green hydrogen production, probably being fed by the West of Orkney windfarm. This is exactly the sort of Just Transition that we Greens have been calling for and will keep the Orkney workforce moving ahead of the times.

“Greens have been highly supportive of the Orkney Harbours Masterplan since its inception in advance of this ScotWind round, and it’s to be hoped that the West of Orkney windfarm partnership will now contribute financially to its development.”

Orkney Islands Council has been in discussions with potential developers over a number of months with a view to the successful bidders using Scapa Flow as a base for operations.

Sites to the west and east of Orkney were awarded including the proposed ‘West of Orkney Windfarm’ which involves a consortium of companies headed by Offshore Wind Power, MacQuaries, Green Investment Group – for which the Council already has an agreement in place to work together.

The ‘West of Orkney Windfarm’ project also includes the Flotta Hydrogen Hub – which could see hydrogen produced in Flotta for export.

Orkney Islands Council see this as ‘ a significant economic opportunity for Orkney including the safeguarding of high-value employment in the county and likely income from harbour dues.’

How much ‘community benefit’ will accrue from these developments has not yet been negotiated.

Leader of OIC, Councillor James Stockan said:

“Today’s announcement could represent a significant economic opportunity for our islands and is another crucial step on our journey to position Orkney as a base for innovation and a major contributor in delivering a carbon-free future.

“Orkney offers a natural environment like no other, particularly Scapa Flow which is the second largest natural harbour in the world.

“Our Orkney Harbours Masterplan document embraces these opportunities – supporting decarbonisation and a transition away from fossil fuels. It includes a range of infrastructure enhancements across key locations around the Orkney mainland, including a new deep-water facility in Scapa Flow – which will be crucial to us realising our ambition to deliver social and economic benefit from offshore wind energy.

“Our discussions with potential developers have been very positive. With the clarity that today’s announcement brings we now have a clear way forward to ramp up these discussions and do all we can to optimise the benefit for Orkney.”

Interestingly it is reported in the Shetland News that there is relief in their islands that development in their waters is not going ahead.

THE local fishing industry has expressed relief after it emerged that a large area to the east of Shetland is – for the time being at least – not going to be developed by the offshore wind industry.

Shetland News

There seems to be no political concern being shown in Orkney for the damage that might be done to the Fisheries sector. There are a few raised voices concerned about the lack of information about the ‘community benefits’ which are supposed to be coming our way.

Liam McArthur, Orkney’s Constituency MSP, LibDem said:

“Despite earlier delays, the ScotWind auction represents a major sea-change in realising Scotland’s offshore wind potential and will be crucial to helping achieve our net-zero targets. Today’s announcement also underlines the importance of our islands in the delivery of these ambitions, building on a track record of being at the forefront of renewable energy innovation.

“After years of over-promising and under-delivering on green jobs, however, it is crucial that Scottish Ministers properly grasp this opportunity for job and wealth creation. We cannot afford any more false dawns. Ministers must spell out how funds raised will be invested within the local communities expected to support the various developments.  The SNP must resist their centralising instincts and ensure communities themselves are involved and, where appropriate, lead those investment decisions.”

These massive developments in Offshore Wind are not only taking place in Scotland. In the US it is the Fishing sector who is most concerned about the development of wind farms offshore.

For example in the US states of Maryland and Massachusetts four new offshore wind projects have been announced in their latest rounds, enabling the addition of more than 3.2 GW of new offshore wind capacity in the country that set its 2030 target to 30 GW at the beginning of this year.

“On 17 December, the Maryland Public Service Commission (PSC) approved more than 1,650 MW of offshore wind capacity as it decided to award offshore renewable energy credits (ORECs) to US Wind’s 808.5 MW Momentum Wind and Ørsted’s 846 MW Skipjack Wind 2 projects.

The same day, Massachusetts gave the green light to the 1,232 MW Commonwealth Wind development, owned by Copenhagen Infrastructure Partners and Avangrid Renewables (Iberdrola’s US renewables company), and the 400 MW Mayflower Wind project, owned by Shell and Ocean Winds (a joint venture between Engie and EDP Renewables).”

The same publication lists a string of offshore wind developments worldwide including

Swedish wind farm developer OX2 has received exploration permits for two offshore wind farms in the Gulf of Bothnia Exclusive Economic Zones (EEZ) near the Finnish western border.

The article quotes Teemu Loikkanen, Country Manager OX2 Finland:

” The production of green hydrogen and the electrification of industrial processes, as well as data centres or battery plants, will require an immense amount of renewable electricity production,”

As we see our energy prices hiked now to an unaffordable level for most Orcadians. And whilst we live in islands that produce more than our own needs in renewable energy (mostly through onshore wind). Do not expect that prices will come down. Do not expect that thousands of Orcadians now living in fuel poverty, will suddenly be able to heat their homes to a tolerable level. Do not expect a bonanza of employment opportunities to come your way or even perhaps to come to the next generation. Sadly we have been here before. We have heard these soundbites before.

The only sure thing about the announcement on Monday is that Scotland has an abundance of natural resources and yet as Robin McAlpine pointed out, “None of the successful bids went to companies registered in or owned by Scotland”

Fiona Grahame

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