Could independence give Scottish renewables a fair wind?
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The double whammy of the Covid-19 pandemic alongside plummeting oil and gas prices has placed the future of energy production in the spotlight as we seek a ‘new normal’ economy. The reduction in pollution from a drop in fossil fuel consumption during lockdown only highlights the urgency to address climate change, an all-encompassing threat to life on Earth.
Collaboration between government policy and investor confidence is said to be key to kick-start the recovery. Some straws in the wind are the diversification of supply chain companies from oil into renewable energy. This has been possible and necessary from the slump in oil production and the need to keep businesses afloat – but it also shows a willingness to bid for work on billions of pounds worth of components in huge offshore wind projects.
First though, heavy lobbying from oil and gas majors seeking government support for new ventures into hydrogen power and carbon capture and storage.
These are closely related to current fossil fuel extraction technologies. Threats of huge job losses and cuts by the oil majors is focusing minds. A no-deal Brexit may stall a possible economic recovery as the lockdown coincides with the worrying uncertainties of a free-floating UK economic model geared to World Trade Organisation tariffs as opposed to free trade inside the EU. To say that business as usual will not be possible after Covid-19 is an understatement.
Announcements recently that BP is to cut 10,000 jobs globally is a sign that many office workers could go and that Aberdeen, in particular, could be badly hit.
Of course, the multi-national wants to spin its decision by pointing to its target of being emissions neutral by 2045 in Scotland and 2050 in the UK. It pushes the role of fossil fuel production as a medium-term requirement to power a just transition. That’s a major debate while the fossil fuel giants wish to focus on continued extraction of oil and gas but in a cleaner way so as to continue their profit cycle and practices of the past century.
Undoubtedly, they are putting a major effort into diversification to stay at the top. They have huge clout with the UK and other members of the G20. They are likely to squeeze more incentives or policy tweaks out of Westminster given the orientation of Tory instincts for backing big private businesses.
We can see this trend in contracts for tracking and testing of coronavirus, but don’t forget failed multifaceted firms such as Carillion. Oil and Gas UK (OGUK) will be confident that the Johnson government looks favourably on their pleas as substantial sources of tax revenues and well-paid jobs which the badly battered economy demands.
OGUK has cited the UK government U-turn on support for wind power. They note the Contracts for Difference (CfD) which has given investors a clear steer to put in cash with assured returns. I have noted previously that the cost of wind power equipment has been slashed to make it far cheaper than fossil fuel development and indeed nuclear. OGUK sees a bright future for diversification of their plans in that direction.
Already wind power has overtaken oil, gas and coal sources of electricity production through a wet and windy winter. Wind has been providing around 40 per cent of the power distributed by the UK grid in the past six months. That places its development and the rules around its deployment into sharp focus.
The early stages of tooling up to deliver Seagreen, the large wind project offshore from Montrose, has reignited concerns about gaining fabrication jobs in Scotland, for example at the mothballed Arnish yard on the Isle of Lewis and its partner yard at Methil in Fife. The Canadian buyers of BiFab are accused of failing to invest in bids for jacket and foundation steel work for SSE and Total’s Seagreen scheme.
Trade union leaders for Unite and the GMB in Scotland blame the Scottish Government, a 28 per cent owner of BiFab in the rescue deal, for failing to push the Canadian owners DF Barnes into action.
What is missing from these accusations when comparing Scotland’s facilities and skills with those of Denmark or Belgium or the UAE is that these three are independent states with national companies that have long been state-funded and controlled. Scotland defers to Whitehall which applies state aid rules and hampers Scots job and work retention, for the key mantra of London government is private enterprise and denationalisation.
I’ve mentioned before that the north-east of England was favoured for siting key component makers, such as Siemens making turbine blades at Hull. No such major component investor in wind power had operated for long in Scotland. Danish Vestas sold its wind tower production to South Korean owners and now that is mothballed at Machrihanish. BiFab, now Barnes, lacks work. In short, the Scottish government has few powers to support such vital enterprises despite being blessed with some of the best wind speeds in Europe.
I’d be much happier if the trade union leaders remembered that the powers of independence work well for small nations like Denmark and Belgium. Since a majority of Scots are coming round to that view, could our renewable energy potential take off with far more home-based clean power control?
We know the potential of the Cromarty Firth. We know of the likely development of offshore wind, wave and tidal power north and west of the Highlands and Islands to feed European power needs for electricity in the post-fossil fuel age. Surely that’s a win-win aim?
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