Associate Feature: Investors are backing Scotland’s 2045 vision

The eyes of the world are on Scotland as its flagship ScotWind projects enter their third year of development. Much has changed since the heady days of the announcement of the winners by Crown Estate Scotland back in January 2022. Are investors still feeling buoyant? 

Let’s go back to the beginning. The Scottish Government granted us seabed lease options off the coasts of Orkney (for our 1GW Ayre project) and Aberdeenshire (for our 1GW Bowdun project) because we could demonstrate our track record as major investors, an ability to build projects with high local content, and a strategy for maximising opportunity for Scottish businesses and people.

The challenges we’ve faced since then are well-known to policymakers: repeated delays in obtaining grid connections from the ESO, lack of public support from the UK Government for joined-up regional communications about transmission infrastructure, the twin pressures of high inflation and international competition for raw materials and major components, uncertainty in future network charging and energy market structures. The list could go on, but as I’ve said, none of this is unknown to readers of this magazine.

The most powerful statement I can make is that TWP’s projects – one of which has the added challenge of using emerging floating wind technologies – remain on track. Our investors met early this year to reconfirm their commitment to the projects in the long term and to Scotland as a prime location for offshore wind investment (founder DEME is also a major contractor to the sector through its cable, foundation and tower installation vessels).

We may have a decade before a single electron enters the Grid from either project. This year and next are the key consenting years (our onshore and offshore applications go in next year), while we enter our engineering design phase and plan procurement of major components. Decisions on port contracts for fabrication, supplies, and construction services will come up in the next 18 months.

The signals coming from the Scottish Government on port and supply chain development have helped to keep our faith in our projects high. Highlights are a £500 million boost which will align with the industry-led Strategic Investment Model (SIM), green freeport scheme, and comprehensive Draft Energy Strategy and Just Transition plan that has started to be backed by investment commitments, too. 

The UK Government has likewise swiftly responded to industry concerns following AR5. With this, we would look to see a public communications campaign from them about the need for overhauling the transmission infrastructure upon which our wind farms will rely. Targeted regional campaigns from policymakers would also tie together the communications from the various developers in a meaningful way. 

Meanwhile, a steadying force remains UK Research and Innovation (UKRI) with its dynamic support for homegrown innovation in renewables, providing confidence in the future of the sector here. The bold recommendations on the development of the grid network from Chair of the Energy Systems Catapult Nick Winser last year are leading to a shake-up of the roles of Ofgem and ESO, with pragmatic proposals on community benefit from energy infrastructure too. Last month, the Offshore Renewable Energy (ORE) Catapult opened FLOWIC, a floating wind innovation centre in Aberdeen, which will be a testbed for locally available technologies and services that will, frankly, make out Ayre project work.
 

Staying focussed on the prize for Scotland
While the Committee for Climate Change has recently criticised the coherence of Scotland’s 2030 climate goals (75% reduction in emissions), the ScotWind programme is one of the areas it considers “on track”. That’s one fact that clearly cuts through the noise and the cycle of distraction and reaction in the media on Net Zero.

I would also say that two years into our development and despite the challenges, we are fully standing by our own targets for local economic benefit in Scotland. We believe that if Scotland holds its nerve on backing port investment and supports its supply chain’s transition to renewables, the nation will also reap the economic benefits from ScotWind.

With our founder companies’ experience of transforming Port La-Nouvelle in France into a floating wind hub for the Mediterranean and port investments globally, our estimation of the credibility of development plans put forward by ports like Scapa Flow is very high. 
I would highlight two key opportunities that Scotland can realistically leverage: automation-driven manufacturing (including cables, nacelles and blades, and secondary steel production) and floating wind goods and services, where Scotland can become the world’s specialist. While we intend to publish papers on both topics in full, here’s a précis of how we view these opportunities.

• Automated and gap-filler manufacturing. A nation with a Just Transition at the heart of its policy cannot target manufacturing opportunities where low-cost labour is the deciding factor for commercial viability. Scotland does, however, have access to world-leading deepwater operational and engineering expertise, as well as a global reputation for innovation in materials, processes and automation through the catapult network and the National Manufacturing Institute of Scotland. 

The opportunity for Scotland in the near future is to target those manufacturing processes that are easy to automate, such as tubular rolling (for towers, pin piles and suction caissons), or those where disruptive innovation (accessing the ready funding we have in the UK) can tackle hard-to-automate processes.

Other target areas would be components that have a high transportation (and carbon) price, such as panel lines (for floating substructures utilising shipbuilding techniques) which lend themselves to local manufacturing or meet a current global under-supply  (as Sumitomo is doing with its planned cables factory in Scotland). 

Secondary steel production (meaning anything that is not the foundation or tower) is also a compelling opportunity for Scottish businesses as highlighted at the recent ETZ event in Aberdeen. Attracting a major primary steel producer first would be the most realistic trigger for the local businesses to enter the market.

• Exportable floating wind technologies. This is not unrealistic – Scotland has been the location for the world’s first and biggest floating wind farms. We also have the experience of forging a global leadership position in subsea technologies off the back of the 1970s oil and gas boom in Scotland’s North East (the UK as a whole still has a whopping 40% share in the global underwater engineering market). Having a local market that is receptive to trialling innovative goods and services proved to be the competitive edge in that case, and can be again, as we and other developers site the next generation of floating wind farms here (this time at the utility-scale rather than demo-scale).

A policy driver will need to be standardisation of the industry’s components, however, and this is a leadership position that Scottish Government and local industry can take on the world stage. When choosing our floating foundation, we have come up against a market with a bewildering plethora of untested designs (to date, we have reviewed more than 90!). This is a headache for us, but a bigger one for a supply chain that is trying to anticipate those that will actually gain a market foothold and invest in developing bespoke production facilities, goods and services. 

Having worked in offshore wind since its very inception and seen many overly optimistic views of the supply chain opportunity in the UK, I believe that these are the two most credible big opportunities for Scotland. If we can steady the ship when it comes to policy, grid, and regulation in the meantime, at both the Scottish and UK government levels, there is every reason to stay optimistic about the ScotWind programme despite the international headwinds we face.

This article is sponsored by Thistle Wind Partners

https://www.thistlewindpartners.scot/