Alarm raised as Scottish offshore wind risks losing out next year

Peter Devlin

If you are among the many Edinburgh residents who enjoy a bracing walk past Newhaven harbour on the Firth of Forth, you’ll have noticed a ship carrying vast cylindrical objects berthed at Port of Leith.

These are what the offshore wind industry calls monopiles, hollow steel columns driven into the seabed to serve as the foundations for offshore wind turbines that are fixed on top.

Port of Leith, owned by the Forth Ports Group, is busy with work on building Inch Cape, a 72-turbine wind farm off the coast of Angus. This is being developed by ESB, Ireland’s largest power utility, and Red Rock Renewables, an Edinburgh-based wind business owned by SDIC, a Chinese state-owned power company.

Yet the optics are deceiving. While Inch Cape is progressing, zoom out to Scotland’s pipeline of offshore wind projects and the picture is rather different.

Inflation-related cost increases, supply chain constraints, uncertainty over the timing of grid connections and the chilling effect of Donald Trump’s shutdown of US offshore wind projects have all created serious headwinds.

So serious that it now looks like Scotland’s pitch for global leadership in offshore wind through Crown Estate Scotland’s ScotWind leasing round, which kicked off four years ago, now looks to be in some trouble. ScotWind is the collective name given to 20 sites in Scottish waters, mostly in the North Sea, for which companies including EnBW of Germany, Total Energies of France and ScottishPower Renewables were in 2022 awarded seabed options that can be converted into full development leases.

It is essentially a bet on the idea of so-called floating wind, which accounts for 60 per cent of the planned projects. This is different from the fixed-bottom method used at Inch Cape, a project that started over a decade ago under previous ownership. Fixed-bottom technology is deployed in waters up to 60 metres deep. Floating wind farms use larger turbines fixed to surface platforms anchored to the sea floor via mooring lines and anchors. They are deployed far out to sea where their greater blade “sweep” can harness more wind and thus generate more power per turbine.

Yet progress on floating wind is moving much more slowly than the industry hoped when ScotWind started. That’s because with so much economic and geopolitical uncertainty, coupled with the time it will take to upgrade grid and transmission, no-one is prepared to make the first-mover investments needed.

While some small, pilot projects are emerging to test technology and spur a supply chain – notably Pentland, a floating wind farm planned off Caithness in which National Wealth Fund, Great British Energy and the Scottish National Investment Bank last month became shareholders – the industry faces a “chicken or egg” dilemma. Kate Forbes, deputy first minister, acknowledged as much at a supply chain event in Edinburgh last week, saying: “I am acutely aware that orderbook certainty is a real and significant challenge”.

The level of industry alarm is now acute. The latest sign came this week when six of Scotland’s ports, including Forth Ports and Port of Aberdeen, warned in a letter to energy secretary Ed Miliband they risked becoming “stranded assets” if no Scottish fixed bottom projects were successful in the current subsidy auction round for UK offshore wind. Ports are vital because they are where turbines, blades and other kit are assembled before being shipped out to sea for installation.

Such auctions set the price at which the government will pay developers a fixed price for the electricity they generate under certain parameters. On Friday, Miliband’s department finishes reviewing bids that have come in, with results coming next month.

UK ministers have said the auction, known as AR7, is critical in enabling as much offshore wind as possible to help meet the government’s Clean Power 2030 target. Yet this is where politics and geopolitics intrude. It’s become clear that to get as much offshore wind through AR7 as possible, the government is prioritising fixed bottom projects, leaving floating projects for later.

According to industry body RenewableUK’s Energy Pulse database, there are six standalone fixed-bottom projects in England eligible for AR7, but only half that number in Scotland, including Berwick Bank, planned off the Fife coast by SSE Renewables.

In their letter, the Scottish ports warn that no Scottish projects could emerge from AR7 because they pay higher transmission costs than English ones due to distance from the electricity market down south – effectively making it harder for them to price their AR7 bids as competitively as English ones.

Claire Mack, chief executive of Scottish Renewables, says Scottish offshore wind requires a “stable flow” of contracts from each annual auction. “Without this, we run the risk of private capital simply going elsewhere,” she warns. As for ScotWind, a geopolitical problem has dogged its prospects since the start of this year that can be summed up in one word: China.

Chinese wind turbine manufacturer Ming Yang, which specialises in floating wind turbines, hopes to build a £1.5 billion turbine blade factory at Ardesier Port, near Inverness. Yet concerns over national security and supply chain dependency have stalled a decision from the UK government on whether to allow Ming Yang into the UK’s critical energy ecosystem. With the UK-China relationship at its lowest point in decades, it seems unlikely that the Chinese company will receive the green light any time soon.

Meanwhile, the issue of offshore wind is now firmly on the Holyrood election campaign trail. In a social media post this week Karen Adam, MSP for Banffshire and Buchan Coast, makes an explicit link between independence and what she sees as Scottish ownership of renewable energy.

Offshore wind is about to get distinctly more political, before any more turbines start turning.