ScotWind Offshore Wind Leasing Round: statement by the Net Zero Secretary - 18 January 2022

Today, I would like to update Parliament on the outcome of the ScotWind Offshore Wind Leasing Round, a major milestone in our journey to Net Zero.

ScotWind will provide us with enough power for every home in Scotland, place Scotland at the forefront of the green hydrogen revolution and allow us to become a major exporter of clean energy. There is a huge economic prize on offer, at least £1bn of investment for every gigawatt built, which will help create thousands of jobs and transform the Scottish economy.  

This is the first Offshore Wind Leasing Round held since the devolution of the Scottish Crown Estate and has been administered by Crown Estate Scotland, who announced winning applicants yesterday.

ScotWind was created with delivery at its core. It was established with the aim of creating a strong pipeline of projects that would drive our Just Transition and serve as a cornerstone in delivering our commitment to tackle the climate crisis.

We put this challenge to the market and  the market has responded so positively that Crown Estate Scotland has been able to offer awards for 17 major projects.

This is a tremendous vote of confidence in Scotland. The level of ambition shown by the market recognises the seriousness of Scotland’s commitment to achieving our net zero targets and sustainable economic growth.

In particular, ScotWind is by far the world’s largest commercial round for floating offshore wind and breaks new ground in putting large-scale floating wind technology on the map at GW scale.

It is encouraging to see the ambition that has been set out by the provision of floating offshore wind.  As you may be aware, Presiding Officer, our seabed is considerably deeper than waters in England and Wales, and without technology such as floating wind it would not be possible to develop renewable energy projects in these areas. It is therefore inspiring to see the tremendous rate of innovation in this technology and what more could be possible 10 to 15 years from now in this fast growing sector.

Likewise many of the consortia successful in securing lease options have ambitions for green hydrogen.  This presents a range of new energy and export opportunities for Scotland and will help us achieve our ambition of generating 5GW of renewable and low-carbon hydrogen by 2030, and at least 25GW by 2045.  We will be considering these opportunities and what this will mean for our energy system further in our Energy Strategy and Just Transition Plan later this year.

ScotWind will also deliver around £700m in revenues to the public purse for these initial awards alone.   We’ve already made clear we will invest from these monies to help tackle the twin climate and biodiversity crises.

But in addition to these revenues, ScotWind promises to deliver  billions more in rental revenues once projects become operational, to be invested for the benefit of the people of Scotland.  

Importantly, ScotWind promises to be transformational in delivering wider economic supply chain benefits to help power Scotland’s green recovery the length and breadth of the country.

As part of the bidding process, all applications had to submit a Supply Chain Development Statement outlining how they will deliver benefits to Scotland. I welcome the commitment made by developers to invest at least £1bn in the Scottish supply chain for every GW generated via ScotWind projects.

The Supply Chain Development Statement, a mechanism  developed through engagement with the Parliament, provides us with an excellent tool to ensure that, working with the sector, Scottish communities reap the maximum possible economic benefits from ScotWind projects. These statements are not only an indication of what Scotland can achieve, they are our expectation of what the winners will deliver for Scotland.

We must now work together to ensure this happens. As highlighted in the Strategic Infrastructure Assessment (SIA) for Offshore Wind, commissioned by the Scottish Offshore Wind Energy Council (SOWEC), there needs to be greater collaboration between developers, the supply chain and the public sector both to help focus activity and investment in Scottish ports, and help Scottish suppliers to grow and win offshore wind work.

We will work closely with SOWEC to implement the five key recommendations in the SIA, starting with the creation of a Scottish Floating Offshore Wind Port Cluster, with ports acting in partnership to provide the required infrastructure area and capability needed to attract manufacturers to invest in Scotland.

To help achieve this, SOWEC is leading on the development of a Collaborative Framework to encourage the sector to come together and work collectively to support the delivery of offshore wind projects from ScotWind, with a focus on growing capability and expertise, particularly around the growth of floating offshore wind.

We fully support the creation of a Collaborative Framework and we expect the successful ScotWind projects to actively engage in the process from the outset, and to take collective action not only to grow Scotland’s supply chain but also to help deliver the wider economic transformation that will benefit communities across Scotland.

To that end, the scale of the winning bids augurs well for creating the volume of sustained demand that will mark a step change in developing the capability and capacity of Scotland’s infrastructure and its manufacturing and services sectors.

We are at the start of a journey which will take some years before we see these developments constructed. As well as supply chain opportunities the focus now switches to the planning and consenting regimes, ensuring that these work as effectively as possible as we process applications from developers and the potential that can be delivered in light of environmental and other impacts.

Clearly the stated collective aspirations of the projects which have been awarded options are highly ambitious and this is to be welcomed.  ScotWind will make Scotland a global leader in offshore wind energy and all the consortia holding options are fully aware of the responsibilities that come with the development opportunities they have won.

However, ScotWind will also be shaped by our continuing commitment to responsible stewardship of our incredibly rich natural marine resources, as well as the need to fully understand the impact on other marine users. We will work with the sector and with all affected stakeholders to ensure this process and its benefits are realized in a manner which recognises the concerns of all interests as we embark on this journey.

It is not possible at this stage to predict what scale of development will be permitted but through our internationally recognised sectoral marine planning and licensing processes, there is an established pathway to facilitate development. By following due process, taking into account all stakeholders and considerations about impact, the Scottish Government can maximise the huge opportunities - for energy, for the environment and for the economy - that the large scale development of offshore wind can bring to Scotland.

Presiding Officer, these ScotWind awards are a phenomenal mark of confidence in the Scottish Offshore Wind Sector. We are now the biggest offshore wind market in the world and demonstrating global leadership in tackling the climate challenge.

However, the real work starts now. Tomorrow, the First Minister and I will hold a summit with all the successful parties. We will be clear in stating our expectations to all involved. I will also meet with the successful developers both collectively and individually on an ongoing basis to understand how we can work together in a collaborative manner to deliver the best for Scotland.

In addition, the Minister for Environment and Land Reform is meeting today and tomorrow with marine environmental interests and with fishers to ensure that their perspectives and concerns are taken into account.

This is a once in a generation opportunity which has to be realised, has to be maximised and has to deliver the environmental and economic benefits for all the people of Scotland.