If anyone needed reminding that the Scottish referendum on independence is just three months away, the jostling for position between the Scotland and UK’s energy ministers seen at the 2014 Global Offshore Wind conference on Wednesday served that purpose.

UK energy minister Michael Fallon was keen to emphasise that he felt Scotland had greatly benefited from its membership of the UK in building the country’s offshore wind industry, with his counterpart Scottish minister Fergus Ewing quick to reinforce what he felt was Scotland’s more dogged commitment to the sector in comparison to what has been demonstrated in London.

Despite the political punch and Judy, both men’s eagerness to be associated with what has been a relatively successful sector in the UK at least shows how much they care; a consolation for industry attendees more interested in the overall health of their business.
Klair White of EY speaking at Global Offshore Wind in Glasgow
UK minister Fallon said, “It is always a pleasure to speak at a conference where the UK is the real world leader. In the field of energy Scotland benefits from being part of the UK and as a result it is becoming one of the world’s energy hubs, with a thriving renewable energy industry. Since 2010 businesses have announced over £14bn of investment in the renewables industry in Scotland – with the potential to support around 12,000 Scottish jobs.”

Delegates at the conference were told that UK offshore wind capacity is on course to more than treble by the end of 2020 and reach between 13 GW and 14 GW, according to RenewableUK figures and in the minister’s assessment there was a clear reason for that growth.

“Underpinning this success is the support provided by the UK. The size of the UK economy, its single integrated market, its regulatory regimes and the scale of financial support provided to the low carbon sector provide the conditions for business to invest in the energy industries across the whole of the UK.”

Scottish energy minister Ewing was quick to draw attention to less than consistent support by the Conservative government of the sector in their most recent tenure. Using the colloquial, he said the Scottish government was not ‘feart’ to maintain its position towards the industry.

“The Scottish approach is wholehearted in its support of offshore wind – it’s a full blooded, unqualified support, that won’t disappear when the going gets tough.”

“That support has led to the very substantial investment in Scotland, where it will continue – not for the lifetime of a politician, being just five years, but for several decades.”

Fallon’s departure for another speaking engagement seemed pointed as Ewing continued, reminding the audience that the UK capacity margin is down to a parlous 2 per cent and that independence wouldn’t change some enduring truths.

“Without Scotland as (UK energy secretary) Ed Davey has remarked it will also be difficult for the UK to achieve its carbon emission reduction target.”

He concluded by telling delegates that an independent Scotland would be a better bet for the industry, comparing the UK to a car where Scotland has had little say in how its been driven.

“Scotland is on the backseat of that car, sometimes we feel like we are in the boot of the car, but post-independence we will be co-driver wholly signed up to delivering the success of your industry.”

Earlier Fallon said his government had taken on board the feedback of the industry with regard to investment stagnation while the electricity market reform was finalised.

“We took action through the Final Investment Decision enabling for Renewables project. This has been a huge success. Eight projects have signed Investment Contracts, including one in Scottish waters – the 664 MW Beatrice project and these are expected to bring forward up to £12bn of private sector investment, and support 8,500 jobs. Five of these are for offshore wind. As well as being the first contracts released under EMR, they mark a new stage in the growth of the sector, bringing green jobs and growth across the UK and supporting cleaner and more secure energy.”

Fallon also told the conference that the UK’s Offshore Wind Industrial Strategy, was now up and running with a full team in place focusing on securing major new supply chain investments in priority sectors – turbines, substations, towers and foundations.

“To support this role, I have asked Matthew Chinn to review the future of the UK offshore wind supply chain, and to consider what more industry and government can do to support its development.”

“The review will help consolidate joint industry and Government working, contributing to the further development of our investment strategy, and support the work of the Offshore Wind Investment Organisation and I have asked Matthew to report back to me in October.”

In his opening remarks at the keynote, new chairman of RenewableUK Julian Brown said the industry had come a long way since he stood at Kentish Flats in 2002, and while they had made huge leaps, the issue of costs reduction continues to be the grail.

“Where we need to be now is standing in its own merit in terms of generation. Onshore wind is rather closer to that destination than the offshore sector. But we can draw from the onshore sector, although a great transition remains to be made.”

“Onshore wind offers the greatest roadmap in terms of what can be achieved. It’s a road map most industries would envy.”

Brown expressed the opinion that the industry had much matured in the last year, and acknowledged that while there was some disappointment at Contracts for Difference pricing and the negative impact on some projects, he said the industry needed to remind itself of its potential, especially now that the EMR had clarified a road for investment.

“The size of the prize to build this industry is still extraordinary. In the new scenarios there is a better route now than ever before for sustainable projects throughput for UK manufacturers and suppliers. We must continue focus on competitiveness, and build consensus around what we can deliver.

Referring to the somewhat fractious relationship between the industry and the department for energy and climate change (DECC) in the past 12 months, Brown urged a more united approach to ensure the industry continues to move forward.

“It so important that we work closely with DECC on scenario modelling and providing the latest insight we have on costs. Clarity will come from collaboration not just confrontation. Energy will always be policy driven and that’s something we have come to terms with.”

After Fallon’s exit, Ewing had berated the UK government for, in the Glaswegian parlance, ‘swithering.’

“To swither is to hesitate between two alternatives” he explained. “You need a government that chooses not to swither, it’s time to be bold.”

At a later debate EY’s Klair White (pictured above) echoed that sentiment, quoting the Spanish philosopher Maimonides, when she said “the risk of a wrong decision is preferable to the terror of indecision.”

While both parties continue to assert their leverage, who will definitively be taking decisions on the industry’s future from a UK perspective, we will have to wait until the 18th of September to find out.


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