Scottish Renewables Offshore Wind Conference: First Minister's speech - 25 January 2023

Thank you very much indeed Claire for that introduction and thank you to all of you for being here, so bright and early this morning.

That was a very cheery introduction, Claire. I didn't realise that by the end of this conference, we'd have seven minutes more daylight, but I'm very delighted to hear it.

And the other good news is that January is coming to a close over the next few days, but today, the 25 January is, of course, an important date in the Scottish calendar - it's Robert Burns day, so happy Burns Day to everyone.

One of my favourite lines from the poetry of Burns comes from the famous poem, the one that we're all - or most of us, certainly in my day, were taught in primary school, To a Mouse, when he talks about 'man’s dominion breaking nature’s social union'.

Now, what he’s talking about then is destroying a mouse nest with his plough. If he could have been alive today, I'm not sure what he would have made about man's dominion and the damage it is doing to our environment and to nature, and so perhaps with these words, all these years ago, Burns was - as he does in so many of his poems - demonstrating that he was a bit of a prophet. But the reason I mentioned that is not just because it's Burns Day, but because the topic of this conference is a really important part of how this generation starts to repair and heal that environmental union, and to repair the damage that man's dominion has done.

So it's pretty timely and appropriate to be having these discussions right now, and I'm really grateful to Scottish Renewables, not just for organising this event, but for all of the tremendous work that the organisation does all year round, and it is good to see so many people in attendance here today.

The first of these offshore wind conferences took place, I understand, back in 2011, but there's no doubt that in the years that have passed since then, the importance of these discussions has only increased, and increased, and increased. And of course, last year's conference came at a time when we were still absorbing the outcomes of the ScotWind leasing round. And, since then, I hope it has become ever clearer that that leasing round and the outcomes of it represented a really pivotal moment for offshore wind in this country, and indeed for the renewables sector more generally.

ScotWind is after all - and everybody in this room knows what I’m about to say but it is worth I think just reminding ourselves, every now and again - ScotWind is the biggest programme of its kind in the entire Western Hemisphere.

The selected project could conceivably yield additional capacity of over 27 gigawatts. And to put that into context, that's more than double the current level of installed capacity from all forms of renewable electricity in Scotland.

So that gives us a sense of the scale of ScotWind, and it is something to be really excited and optimistic about. And of course, it all comes with commitments to the Scottish supply chain worth a potential £28 billion - so around a billion pounds for every gigawatt of energy that might be generated.

Now over the past year, the Scottish Government working with others has been focusing really hard on everything we need to do to properly maximise the benefits of the ScotWind project. And in doing that, I hope all of us collectively, as a country, have really underlined the huge importance that we place on offshore wind.

I hope you can see that in the national strategy for economic transformation published last year, and much more recently in the draft Energy Strategy and Just Transition Plan that was published just two weeks ago. Both of these documents reflect our understanding and belief that offshore wind will be essential – not only in enabling us to achieve our net zero ambitions, but also crucial to Scotland's long term economic prospects and prosperity.

So that's why I'm really delighted to have the opportunity to be here with you today - because your industry and the issues you're focusing on simply could not be more important to the future of our country; indeed, to the future of our planet.

For Scotland, offshore winds, and of course, the hydrogen industry - the green hydrogen industry - that you can then help to create, offers enormous industrial and economic opportunities for us. However, and this is important for all of us to recognise and realise, we know that we can only take advantage and maximise these opportunities if there is much greater collaboration, now and in the future, than perhaps there has been in the past - collaboration across government, developers and the entirety of the supply chain.

And so today, I want to stress the importance of that collaboration in three different, but key and interrelated, areas.

Firstly, I'll talk a bit about the role of the collaborative framework charter, agreed last year. Second - and this is important - I want to give reassurance that the Scottish Government is, and will continue to do everything we can to work collaboratively with the UK Government on maximising these opportunities. And finally, I'll highlight the key elements of the draft energy strategy and stress that the Scottish Government is determined to listen and learn from all of you as we decide on our future ambitions, or the scale of our future ambitions for the sector.

So taking the first of these – the collaborative framework charter - that was coordinated as you know by the Scottish Offshore Wind Energy Council, and one of its key aims is to bring developers together to maximise the opportunities of ScotWind.

To date, 24 companies have signed up to the charter. Crucially, and importantly, that includes almost all of the 20 successful ScotWind bidders. And these developers are now working with government and with the enterprise agency on a strategic investment model, which we expect will be launched in the spring of this year. And that model will provide developers with a clear process for agreeing – at pace - shared investment priorities, for example, in specific types of infrastructure or skills. And in doing so, we hope it will ensure better, more coordinated support for offshore wind projects and the development of our supply chain.

Maximising supply chain opportunities is obviously, and rightly, a key focus for the charter. And maximising supply chain opportunities is something that we recognise we perhaps haven't done as well as we should have done in previous years in the previous development. So this is key. But it's also important to point out the collaboration being encouraged here will also bring other benefits. For example, companies have agreed to work together to support projects that benefit local communities - the first significant example of that is being announced today by a group of ScotWind developers. Buchan, Ossian and West of Orkney wind farms, along with Thistle Wind Partners, are providing £900,000 for an education initiative run by the University of the Highlands and Islands. And that initiative provides children in primary schools and early year settings with enhanced education in science, technology, engineering and maths. The new funding will allow the programme to expand from Highland Council to six other local authority areas in the north of Scotland. It’s the type of investment in local communities and the supply chain, which we now expect to see much, much more of - and also, crucially, at a much more significant level.

And so that's an initial very good example of the collaboration that the charter is seeking to encourage.

Now we know that collaborations of this kind is vital; essential, in the industry, but of course it's equally important in other areas as well, and that brings me to the second point that I want to cover. Notwithstanding - and I don’t think I’m betraying any secrets here -notwithstanding the fact that the Scottish Government and the UK government don't agree on everything, I think that's probably fair to say. Putting that to one side, I want to be very clear that my government is determined to work with the UK Government as constructively as we can. And, on offshore wind, I'm pleased to say there are indications that the UK Government reciprocates that determination - and the fact that they reserve so many of the powers in relation to offshore wind makes that really essential.

So we continue to engage very closely with them on a number of key issues. One good example of that is the collaboration we have had on green freeports. The two governments worked together to design the selection process, and just a couple of weeks ago, we were able to make the joint announcement that Scotland's first green freeports would be at the Inverness and Cromarty Firth and the Firth of Forth. These two sites will now benefit from major investment as well as tax and customs incentives.

And I'm delighted that the Cromarty Firth Port has had further good news just today, with the securing of an £8 million contract to store the monopile foundations for the Moray West project - that builds on a major investment that the developer, Ocean Winds, has already made in the port.

We know that in the future, a very high proportion of supply chain opportunities will be linked to manufacturing and fabrication. So that is why investing in ports and harbours was identified as such a major priority in strategic investment assessments from 2021. And it is why we are so determined to work with the UK Government and with industry to bring about the necessary improvements.

There are, of course, a number of other areas where we are applying pressure to the UK Government because we need to do so. For example, we are continuing to make the case - very strongly make the case - for changes, what we consider to be sensible and essential, changes to the transmission charging system. Now, more than ever before, it's vital that the system encourages rather than penalises renewable projects like ScotWind, which are located far from major population centres, and we are continuing to press for a consenting regime that is fit for purpose.

We've been very clear with the UK Government, and they appear at this stage to be receptive to these arguments, that the reforms currently being discussed at Westminster level really do need to work for Scotland. That means they need to support the ambitions we have for ScotWind, while ensuring proper environmental protections. And so we are seeking meaningful engagement in order to ensure that any changes benefit Scotland, because a key point to make here - changes in this regard to benefit Scotland will benefit the UK as a whole as well, because the UK will not meet its targets for offshore wind unless Scotland fully realises our ambitions for offshore wind. So there's a real mutual interest here in getting everything right and making sure it works as intended.

Now that links to the third point about collaboration that I want to highlight today.

As I mentioned earlier, and as hopefully you will have all by now read and absorbed, we published our draft Energy Strategy with its accompanying Just Transition plan a couple of weeks ago. That reflects our commitment - our very, very strong commitment - to accelerating as far as is reasonably possible, the transition away from fossil fuels and towards renewable energy. It also contains some independent research showing that if we get that transition right, we stand to create more jobs in energy in the future than currently exist and are supported by oil and gas, so underlining the significant opportunities that there are there.

So this strategy recognises the hugely important role that offshore wind will play in helping us achieve that transition. It highlights that, subject to planning and consenting decisions, and of course finding routes to market, which is why, or one of the reasons why green hydrogen is also important, we have a potential pipeline of offshore wind projects with a capacity of up to 38 gigawatts. When we add projects that are awaiting construction, under construction, or already operational, that potential capacity reaches over 40 gigawatts.

That said, the strategy also emphasises the very important point that we all have to be very open-eyed about - that this potential capacity at this stage is exactly that; it is potential capacity.

At this stage, we can’t be certain the level of development that will be permitted or feasible, so there is still a lot of work that we still need to do to understand, for example, the impact on marine biodiversity and other users of the sea.

And there are obviously a range of other factors that could impact on delivery from the supply chain’s capacity to meet demand to the length of the time it takes for sites to be connected to the national grid.

So these are the reasons why the strategy at this stage - because it is a draft strategy for consultation - doesn't yet set a firm new ambition for our offshore wind capacity. Instead, as part of the consultation process, we're committed to working with industry to shape that future approach and make sure that we get it right. But that does include reviewing our existing ambition of 8 to 11 gigawatts of offshore wind in Scottish waters by 2030, as well as establishing a new ambition for the sector for 2045.

We want to maximise both ambition and our ability to deliver on that ambition, but we know that your views and your expertise will be essential to helping us get it right.

The consultation on the draft strategy runs until April and I want to invite as many – encourage as many - of you here today and your colleagues, as possible, to engage fully with that process. It is another way in which collaboration will be vital in ensuring the sustainable growth of the sector over the years to come.

Now I mentioned at the outset of my remarks that the first of these conferences was held in 2011. In the course of that year, Scottish offshore wind generated just over 600 gigawatt hours of electricity, the equivalent of powering every household in Scotland for around three weeks.

In 2021, which is the latest year on record, it was 2.7 terawatt hours - enough to power every household for just over three months.

So that gives us a sense of the incredible progress that Scotland has made over the course of the past decade. I think everybody in this room should feel a sense of pride about that. But it should also give us great heart and great optimism, and fuel our ambition for the future.

Because it is clear that we still have a very long way to go. It's also clear, as I said earlier on, that we've not done as well as we should have in the past in securing supply chain opportunities that offshore wind represents. My hope - actually, I’ll put it more strongly than that - my expectation is that ScotWind marks a real turning point.

The need to accelerate our energy transition, that we all recognise, and secure the benefits of our renewables assets and success, has never been a more urgent imperative. And so, our priority – our shared and collective priority - must be to intensify the work we do together to achieve those shared ambitions, for the benefit of our own generation, but also for the benefit of the generations who will come after us.

So the government - my government - hugely appreciates the opportunity to work with you and your willingness to collaborate, which has already been shown in so many different ways.

My pledge to you today is that we will continue to do all we can to support your continued success. The prize if we get this right, in my view, couldn't be more exciting.

We live in a world right now where it's not difficult to see and be reminded - almost on a daily basis - of all of the challenges crowding in on us. But we have every reason to be hopeful, optimistic and upbeat about the future - because the prize, the massive prize, if we get this right is a greener, fairer, more resilient energy system; our country here in Scotland that successfully, fairly and justly makes that transition to zero; and a country, albeit relatively small in scale, that plays a disproportionate part in helping the world save the planet for future generations.

So I think that is something - on a Wednesday morning, in January, when it's still quite dark outside - but we're getting more daylight promised by Claire here today - that's something to light up all of us and give us real hope for the future.

So I'm grateful to all of you for your part in helping Scotland attain that prize, and thank you for giving me the opportunity to share some thoughts with you today, and I now look forward to answering a few questions before we get on with the hugely exciting job of realising that amazing potential - thank you very much indeed.