Scotland has long been a leader in harnessing wind energy. As the race has heated up, interest around the globe has never been higher. Alex Irwin-Hunt at fDi Intelligence reported that “Scotland attracted more greenfield foreign direct investment (FDI) into wind energy projects last year than any other sub-national state or region worldwide.” The 2022 greenfield investment for Scotland outstripped the total for the rest of the world.
This is a tribute to the support the Scottish Government has made to spur investment in renewables and meet net zero targets. It bodes well for additional future investments in the green economy.
Against this swell of interest, however, there is an undercurrent of concern that local communities receive far less than they should from commercial wind farms.
The Scottish Government set the obligation to support local communities at £5k/MW per annum. Although many communities benefit from the Scottish Government’s annual donation obligation, these are far below the level which community-owned wind farms generate. As reported by Chris MacLennan at The Press and Journal in 2021, “Point and Sandwick Trust has found community ownership of windfarms generates 34 times more benefit to the local community than commercially operated schemes.” The difference at the time was £170k per MW for community-owned wind farms versus £5k per MW for commercial wind farms.
The tide is turning on how best to meet the obligations commercial wind farms have to support local communities. The 2022 energy crisis has been most felt throughout the UK, which did not cap energy prices. This has helped create record profits for every energy provider.
Caroline Wilson, from The Herald, reported in December 2022 that Highland councillors are pressing for 5% of gross revenue to be donated to local communities as whole energy prices have soared from £30/MW hour to £150/MW hour. This additional source of funding is an obvious path as the extent of the growth in the UK’s national debt becomes clearer.
This growing discrepancy between energy company profits and social responsibility obligations to local communities and the vulnerable needs to be addressed to establish a fairer future for all.
What Lies Ahead for Scotland’s Offshore Wind Farms
Scotland has some of the best offshore wind resources in the world. The Scottish Government is committed to supporting the development of offshore wind, providing funding to support the sector. Although the environmental impact of offshore wind farms has not been completely assessed, it currently appears to have less of an impact than other forms of energy production.
That said, there are key issues which need to be addressed, though these are not insurmountable. Three key issues: port capacities and capabilities, grid connection and access, and battery storage can be viewed as opportunities by those who are interested in developing Scotland’s economic base.
Scotland’s existing port infrastructure is being developed, with a green jobs boost supporting the pre-assembly, plant and equipment at Port of Nigg where the Seagreen Offshore Wind Farm is nearing completion of the construction of 114 offshore wind turbines.
Seagreen is Scotland’s largest offshore wind farm project thus far and is currently the world’s deepest fixed-bottom offshore wind farm. Seagreen started producing power last August and is targeted to generate 1.1GW of electricity in its first phase. Seagreen has the potential to have up to 150 wind turbines. When complete, Seagreen is projected to produce energy to power 1.6million homes – roughly two-thirds of Scottish households.
Offshore wind farms are a key component to renewable-based, low-carbon future for Scotland. Attracting Foreign Direct Investment will help ensure that Scotland continues to lead the world in harnessing wind through onshore and offshore projects, including floating wind platforms.
Wind energy capacity has grown by an average of 17% per year over the past decade, making it the fastest-growing source of electricity in the world. With the energy shock of 2022, it is clear that many countries are now ready to reduce reliance on fossil fuels and nuclear energy. Scotland is one of many leading the way for everyone to benefit from goals to achieve net zero targets.
Scotland’s 2023 draft Energy Strategy includes three overarching objectives; to scale up renewable energy production, to secure continued and increased investment in the net zero energy economy, and to deliver a fairer, more secure energy system, which is not reliant on international commodities markets. Mike Matheson, Cabinet Secretary for Net Zero, Energy and Transport, highlighted to the Scottish Parliament in January 2023, that Scotland’s rich renewable resources could generate a surplus and open up new economic opportunities for export. With capabilities to store excess energy for export, Scotland could weather future energy crises, no matter which way the wind blows.
It’s clear that Scotland and the rest of the UK benefits from securing our energy supply in renewables, which help minimise the impact of energy shocks now and in the future.