Offshore wind is driving investment and jobs: Deputy First Minister's speech

Thank you very much. It is a great privilege for me to come and share some thoughts with you this afternoon.

If anything has struck me in my engagement with you all, it’s that we in Scotland have the talent, the energy and commitment to ensure Scotland plays one of the most important roles across the globe in reaching net zero targets and in demonstrating how the path to net zero - with all the implications for the renewables industry - is a means of creating wealth and prosperity for our people.

And that essentially is at the heart of my job as Deputy First Minister with responsibility for the economy. It's being able to deliver economic growth and prosperity on a community by community basis using our wealth of natural resources.

And essentially that is the job you’re engaged in and we commend you for that. I want to do whatever we can not only to enable you to meet your own business objectives but to ensure the prosperity generated as you do that is shared across Scotland.

We want to ensure Scotland has a thriving, innovative, sustainable green economy and you are at the forefront of making that happen.

We already see that the offshore wind industry is driving investment, creating skilled, well-paid jobs and positioning Scotland to be that global leader.

I met a number of businesses before coming to address you this afternoon and made the joke that every second person I meet these days has been recruited by the renewables industry. So you’re hiring half of Scotland as far as I’m concerned.

That illustrates the level of activity, innovation and investment that is happening right now.

And whilst we have made great strides, and it’s hugely exciting to see what’s happening, I also come to recognise that there is still untapped potential waiting to be realised.

Given all of our resources which is well documented, expertise which is clearly on display and the ambition which I hear time and time again from businesses. Given all of that, Scotland can – and should – be doing even more to seize this once in a lifetime economic opportunity in front of us. 

One of the benefits of events like this allows us to discuss how we unlock that potential even further – and even faster.

And how we work to turn those potential benefits into tangible outcomes that strengthen our economy and our communities.

Because clearly achieving our objectives, whether those are government targets or your business objectives, is not going to be the work of one sector operating on its own. Clearly for this once-in-a-generation opportunity the public and the private sectors need to work hand in hand and drive progress with a shared commitment to success.

And it feels like right now we are at a crossroads where either momentum starts to slow down or we drive ahead to build on the last few years.

And it’s in listening to some of the comments you’ve made to me and my colleagues about how we accelerate that momentum that prompted us in the Budget that was published on 4^th of December to triple our capital funding for offshore wind for next year to £150 million.

That’s part of our five-year commitment to invest up to £500 million to unlock private investment, to provide market certainty and to do everything we can to ensure the momentum continues.

And clearly I said that this has to be done hand in glove with the public and private sectors working together.

To do that we want to work with developers, supply chain companies, with public sector delivery partners like our enterprise agencies – and I know some of them are here today - the Scottish National Investment Bank and the UK Government to drive those investment opportunities to rapidly deliver the best projects at scale

Partners can be found across all sectors of our society – from local authorities benefiting from jobs and investments into their local economies, to developers supported by public sector commitments.

And as of last July we’re also very clear about our responsibilities to work with new partners like GB Energy and the National Wealth Fund.

GB Energy offers a unique opportunity to make floating offshore wind central to their plans, while the National Wealth Fund can direct vital investment to projects that strengthen Scotland’s renewable energy economy and infrastructure.

But at the end of the day, what I like to see is the equivalent of bricks and mortar. I like to see the construction actually happening, focusing on real investments not just the rhetoric that you might hear in a speech like this. Because it’s when we get to that point that we deliver the real outcomes communities want to see.

Last year, the First Minister asked me to take on a cross-government leadership role as an investment champion - basically trying to ensure the investment we know exists and is looking for a home is matched with the opportunities and the potential which you all know is there in abundance.

I have spent recent months engaging with a number of sectors to do that, to demonstrate our commitment, to create the conditions to stimulate the large-scale investment we will require to realise it. To understand what the greatest sources of uncertainty are. To understand what the blockages are and the hurdles to all of that. And to understand more than that - who can fix it.

But in response we need industry to bring forward the best projects in priority areas - projects that can impact regional economies and drive innovation in our supply chain.

Take, for example, last week’s announcement that the Scottish National Investment Bank will invest £20 million in XLCC, a subsea cable manufacturer. That investment goes beyond offshore wind. It’s about transforming a brownfield site at the former Hunterston Terminal in Ayrshire into a state-of-the-art manufacturing facility. Once operational, that facility will create 900 jobs including over 200 apprenticeships and produce thousands of kilometres of high-voltage direct current cables every year.

Strategic investment that matters for our national economy. Local investment that communities will see a tangible benefit from. And more than that, it goes to the heart of using our great natural assets to generate jobs here in Scotland. It generates short-term results but also builds long-term value and an industrial legacy for Scotland’s economy.

Those familiar with the site will know the investment in XLCC is part of a wider redevelopment at Hunterston. Last month, Peel Ports Group received planning consent to redevelop the Hunterston marine yard, a £150 million project that will create a hub for the blue and green economies.

That redevelopment promises to attract £3.5 billion in inward investment, create over 5,000 jobs and is a prime example of something that I really care about and I’m looking to see more of - how a single strategic investment triggers a chain reaction of economic growth.

I used the example of Ayrshire. But as we look further north we want the global offshore wind market to know that all of Scotland is ready and open for business, to work with international partners to unlock new opportunities in supply chain development, innovation and research, ensuring that the benefits of offshore wind extend across Scotland.

Last year, as you know, Sumitomo Electric Industries broke ground on their £350 million cable manufacturing plant at the Port of Nigg, in turn creating hundreds of green jobs in the Highlands. Today, alongside their consortium partner Van Oord and in collaboration with SSEN Transmission, I was delighted to hear the announcement of the signing of a Capacity Reservation Agreement (CRA).

That agreement paves the way for the supply and installation of critical infrastructure, strengthening Shetland’s connection to the grid and supporting its role in Scotland’s renewable energy future.

We are now seeing major manufacturing for offshore wind projects happening on Scottish soil, signalling the beginning of a new era, where we lead both in generating energy but also producing the components that make it possible.

Because that’s when it starts to make sense for everyone. For the developers, our workforce, for the economy and communities. The pieces needed to build offshore wind farms are being made here in Scotland.

There are plenty of other examples of how we are working across sectors to realise the vast opportunity offshore wind presents.

I said at the outset that when you are looking at ensuring the investment opportunity matches the funding available, you have to be realistic at what the barriers are too. The global challenges we face, from supply chain disruptions to rising costs of raw materials and the complex regulatory landscape clearly has an impact.

There are two key challenges facing offshore wind projects in Scotland - improving the Contracts for Difference scheme and reforming the connections queue process. Responsibility for strategic network planning, electricity network connections and CfD rests with the UK Government.

For Scottish projects to connect to the grid at the right time, with certainty to secure investment and drive growth, those with the power to do so must take decisive steps. Otherwise there is a risk that we are left behind and we need to ensure those projects help us move beyond the current economic paradigm.

Because you tell me – and I hear you loud and clear – that those barriers are slowing deployment and hindering the major infrastructure projects. The very ones that drive the growth that I celebrate.

So the UK Government, Ofgem and the National Energy System Operator need to bring forward crucial reforms to cut connection times for projects which are needed to meet net zero, which will secure project deliverability and increase investor confidence. This will also mean looking beyond 2030 to projects coming slightly further down the line.

The UK Government also needs to ensure sufficient budget, maximum support and greater long-term certainty for Scottish projects in AR7 and future Contracts for Difference rounds to deliver Scottish projects at scale.

And it is essential that reforms to Contracts for Difference support the advancement of floating wind projects, recognising their potential to drive innovation and economic benefits.

We do engage collaborate and openly with the UK Government on those points.

Offshore wind represents a once-in-a-generation opportunity to transform our economy and create jobs. Jobs that will drive the growth, support innovation, diversify industries, and generate wealth. It’s about creating good quality, diverse jobs for those entering the job market for the first time and those who want or need to change careers as part of a just transition.

To realise that, collective action needs to be taken in the short, medium and longer term so we have the right people with the rights skills in the right place at the right time. That skills gap, having gone through what I perceive to be some of the barriers to deployment, we do have to work very closely together to ensure a development of training programmes that meet your needs and address the skills gaps.

That’s how ultimately, we will ensure those benefits are felt.

At the end of the day, as a nation of small and medium-sized businesses, as a nation of towns and villages, what our people are looking for is to understand how this great wealth of natural resource makes a difference to them. I think we’ve got a great opportunity from Shetland to Selkirk to demonstrate that when it comes to this revolution, they are in the driving seat and the benefits for them are tangible.

It won’t just be a long term legacy for the nation, for the national economy but it will mean a long term legacy for them.

Your objectives are about creating local or national wealth for our people and putting them in the driving seat.

We are at the beginning. With every investment, every partnership, every innovation, we are getting closer to that objective. The momentum has been building and I’m really interested in preserving that and building on it.

We cannot afford a pause. We need more - more investment, more bold steps, more commitment from every corner of our economy.

As a Scottish Government we are willing and committed to take the bold steps to make that happen, understanding things that are within our gift and understanding where we can speak on your behalf to other partners that have levers of power.

Through these actions we will unlock the true potential of offshore wind.

For me, that true potential isn’t just meeting targets. It’s creating that long term wealth and prosperity for our people.

I wish you all the very best, commend you for what you have done so far and look forward to continuing to engage with you on behalf of the Scottish Government to make it happen.

Thank you.