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‘Truly historic’ offshore wind leasing round to unleash billions of investment across north and north-east

The Crown Estate Scotland (CES), which owns the seabed of the coast of Scotland, announced the outcome of its application process for ScotWind leasing.
The Crown Estate Scotland (CES), which owns the seabed of the coast of Scotland, announced the outcome of its application process for ScotWind leasing.

A “truly historic” plan confirming the first new offshore wind farms in Scottish waters in a decade have been revealed, unleashing billions of investment in local businesses and jobs.

The 17 locations of the ScotWind licence awards.

The Crown Estate Scotland (CES), which owns the seabed off the coast of Scotland, announced the outcome of its application process for ScotWind leasing.

It is the first process of its kind since since the management of offshore wind rights were devolved to Scotland.

A total of 17 projects, with combined capacity of 25 gigawatts (GW) were selected out of a total of 74 applications, and have now been offered option agreements which reserve the rights to specific areas of seabed.

Estimated £26 billion investment

From the successful bids, just shy of £700 million will be paid to the Scottish Government for public spending with the likes of BP, Shell and SSE Renewables having competed to  build the next generation of Scottish offshore wind farms.

The estimated total project value of around £26billion makes ScotWind likely to be the biggest set of infrastructure projects in the country over the next decade.

The 17 projects given the go ahead by CES is expected to lead to a multibillion-pound investment in local supply chain companies and the people they employ across the north and north-east.

Sir Ian Wood. Picture by Kami Thomson

Philanthropist and former oil tycoon Sir Ian Wood said the deals marked a  “crucial step in repositioning the north-east of Scotland from the oil and gas capital of Europe to the net zero energy capital of Europe”.

First minister Nicola Sturgeon said the leasing round unleased significant investment that would enable Scotland to meet net zero targets.

First Minister Nicola Sturgeon (centre) meets climate activists Greta Thunberg (left) and Vanessa Nakate (right) during the Cop26 summit at the Scottish Event Campus (SEC) in Glasgow. Photo Andy Buchanan/PA Wire

She said: “It allows us to make huge progress in decarbonising our energy supply – vital if we are to reduce Scotland’s emissions – while securing investment in the Scottish supply chain of at least £1 billion for every gigawatt of power.

“And because Scotland’s workers are superbly placed with transferable skills to capitalise on the transition to new energy sources, we have every reason to be optimistic about the number of jobs that can be created.

“That means, for example, that people working right now in the oil and gas sector in the north-east of Scotland can be confident of opportunities for their future.”

Chamber chief executive Russell Borthwick said the UK Powerhouse report's predictions showed the "resilience" of the north-east.
Russell Borthwick.

Russell Borthwick, chief executive of Aberdeen and Grampian Chamber of Commerce AGCC), it was a “big day for the UK energy sector, and for the Aberdeen region in particular”.

He added: “The activity that will follow the award of these licences is part of a projected £170+ billion investment in capital and operating activities in the UK offshore energy sector between 2021-2030.

“Much of this will be in this region or powered by the companies and people based here. Europe’s oil & gas capital is not the problem, but very much part of the solution and is set to become a net exporter of net zero.”

BP confirmed it was pressing ahead with its plan to establish its global centre for operations and maintenance for offshore wind in Aberdeen.

The energy giant and its partner EnBW won seabed space for the “Morven” offshore wind farm, with generating capacity of 2.9 gigawatts (GW) around 37miles off Aberdeen.

Louise Kingham, UK head of country for BP.

Louise Kingham, BP’s head of UK and vice president for Europe, said the operations centre would create 120 further jobs in Aberdeen in addition to the firm’s 900 staff in the city.

It will be based at its new headquarters building set for Aberdeen International Business Park when the company moves from Dyce later this year.

“It’s really exciting,” she said. “It means we can recruit for some new jobs and we can also do some reskilling and retraining of some of our oil and gas workforce that might want to move across to these new projects.”

The head of UK for BP said the centre is expected to contribute £40m to the local regional economy, building further on the company’s current oil and gas operations as well as its plans to build Scotland’s first scalable green hydrogen production plant.

She confirmed over 450 companies had signed up to a portal designed to engage local businesses to ensure employers benefit from the billions of investment.

Size of supply chain prize

She said: “The prize for the supply chain with ScotWind and whatever the Crown Estate Scotland does subsequently is that there’s an opportunity to build a supply chain here at home.

“And remember it’s not just about the offshore wind, we’ve got decommissioning roles and the North Sea which is going to be busy for decades in terms of working towards a net zero basin.

“There’s a lot going on in the energy system across Scotland and off its coast and there is a real opportunity to build a home grown, sustainable supply chain.”

‘Last chance saloon’ for jobs promises

However unions warned the licenses were a “massive test” for the industry to ensure it meets pledges to create jobs.

GMB Scotland Secretary Louise Gilmour said: “After the abject failure of the last decade on offshore wind manufacturing, progress will be judged on the number of jobs and scale of investment this leasing round brings to Scotland.

“But let’s be clear there are no guarantees – the list of successful applicants includes firms that have offshored tens of thousands of green manufacturing jobs to the rest of the world in previous projects.

“This is a massive test of the renewables industry’s environmental and social justice credentials, and the last chance saloon for political leaders who have promised a green jobs revolution for years.”

For a full list of project winners see this story.

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