Warning Scottish supply chain at risk over floating wind delays and policy dithering

The supply chain in the north-east of Scotland faces serious risk if policy direction doesn’t change to support offshore wind, said ETZ boss Maggie McGinlay.

“The real concern is we lose all of the skills and knowledge and expertise and erode it, when if we just have the right government policy and will in place, by both Scottish and UK government, then we can realise the floating wind opportunity and use all that subsea expertise to good effect,” she told Energy Voice.

The ETZ Ltd chief executive explained that her organisation’s “concern is always the supply chain companies who are employing hundreds and hundreds of people” in the north-east of Scotland.

“For us it’s always how do we ensure there’s strong market opportunity for those companies as oil and gas is declining, and ensuring all of the capability that’s been built up in the last 40 to 50 years is not lost from the region, and Scotland, and the UK,” McGinlay added.

Project delay and supply chain uncertainty

In recent years, companies have delayed investment due to Westminster and Holyrood policy pushing back project timelines, which has eroded a potential pipeline of workers for suppliers.

Recently, the developer of the Moray FLOW-Park, Offshore Solutions Group (OSG), told Energy Voice its wet storage site for floating wind foundations could be operational by 2030, but it will delay building until there is certainty from developers the facility will be needed.

At last year’s Floating Offshore Wind conference, Korean moorings firm Moor East explained it had scaled back plans to deliver a manufacturing site in Aberdeen, tipped to be based in McGinlay’s Energy Transition Zone.

The moorings firm announced its plans to create 100 jobs had been scaled back to fewer than 40 as manufacturing site plans were changed and the firm targeted creating what it called a “logistics yard”.

This year has also seen the UK government block Chinese turbine firm Ming Yang’s plans to build a floating foundation and turbine manufacturing site in the Highlands amid security concerns.

When asked how project delays and uncertainty have impacted the UK’s attractiveness for external investors, the ETZ boss claimed the lack “of certainty is definitely the reason why some companies are not making that final decision”.

She added: “They see the opportunity, they see the strength of the supply chain and the talented workforce that’s here in the north-east of Scotland and the proximity to the projects, but until they can have certainty of orders, they’re not going to make an X million plus investment.”

SSEP decisions and transmission charging changes

McGinlay laid out the conditions that have been a blight for the floating wind sector in Scotland and have caused project delays, cancellations, and uncertainty.

She told attendees at ETZ Ltd’s fringe event at the Scottish Renewables and RenewableUK’s Floating Offshore Wind Conference in Aberdeen all of the industry’s “major problems” are “within the gift of our governments to solve”.

She highlighted the concern caused by the strategic spatial energy plan , which stands to hamper offshore renewable projects in Scotland if the wrong pathway is decided by the UK government.

McGinlay also called attention to the fact Scottish developers will have to wait until 2029 for reforms to transmission charging, which she equated to “closing the stable door long after the horse has bolted”.

“It makes [it] certainly challenging for Aberdeen to retain the talent if we’re not seeing those new opportunities come to fruition,” the ETZ CEO warned.

A message to government

There was a notable absence of physical presence from government officials at the Floating Offshore Wind conference.

Scottish first minister John Swinney attended virtually on the first day, and no UK government energy ministers, nor the secretary of state Miatta Fahnbulleh, made an appearance.

When asked what she would say to Swinney and Fahnbulleh if they were in Aberdeen, McGinlay said: “For Scottish government, it’s absolutely to prioritise the consenting of these floating offshore wind projects, because without the consent it’s very difficult for them to move forward, for obvious reasons.

“Yes, it’s due process done and done very thoroughly, but we’ve been waiting a long time for the consent of these projects, and that would give a massive confidence boost to the developers and the wider industry.

“For the UK government, and to Miatta Fahnbulleh, it’s absolutely recognising that we’re all behind reindustrialisation; we all want economic growth, energy security, affordability, and also we all need this move towards lower-carbon green energy.

“There are two things that are getting in the way of that for floating offshore wind, [the] transmission charging regime needs to be looked at so it’s not penalising Scottish projects.

“And the strategic spatial energy plan and the pathways: [ you] cannot choose the wrong pathway that will again penalise Scottish floating offshore wind projects.

“That would be a very clear message to the secretary of state for the UK government there as well. Please address these issues and don’t penalise this incredible opportunity that is ahead of us.”

Ryan Duff is Aberdeen features lead at Energy Voice. As well as reporting on the UK energy sector with a focus on skills and a just transition for the workforce, he also oversees the Energy Voice print edition and co-hosts the Out Loud by Energy Voice podcast.

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