Written evidence submitted by Simply Blue Energy (RES0017)

Dear Mr Wishart,

I am writing in response to the Call for Evidence on Renewable Energy in Scotland issued by the Scottish Affairs Committee. Simply Blue Energy welcomes the opportunity to outline its view on the way in which the UK Government can work to facilitate the deployment of renewable energy in Scotland as part of the green recovery from COVID-19 and for the longer term.

Submission to the Call for Evidence on Renewable Energy in Scotland

A response by Simply Blue Energy.

Background on Simply Blue Energy

Simply Blue Energy is an Irish incorporated blue economy project developer operating around the British Isles and internationally, in floating wind, wave energy and low-impact aquaculture. This response will focus on floating wind and wave energy, although there is also some experience within the company on tidal stream.

Simply Blue Energy, as an entrepreneurial pioneering project developer, will be the first into the market ahead of the major developers. It does this by working ahead of the technology curve so that projects are developed as the technology is developed rather than waiting for the technology to be proven. As such the business has been active in wave energy since 2011 and floating wind since 2015, securing agreements with leading technology companies such as CorPower Ocean in wave and Principle Power in floating wind. This means that Simply Blue Energy will be developing projects ahead of other developers but will then introduce these projects to large developers as new partners when it meets their risk/return profile. This is happening across a number of wave and floating wind projects. Of interest to the Scottish Affairs Committee will be our pre-commercial scale Salamander project in Scotland.1 The 200 MW project to be deployed off Peterhead follows our stepping-stone approach as described below. Simply Blue Energy is also considering the development of a significant wave site in Scotland.

Simply Blue Energy believes that it can deliver supply chain benefits to the UK economy by use of stepping-stone projects. This was a concept developed by the Offshore Renewable Energy Catapult for Crown Estate Scotland in their 2018 report2 . It suggests that the best way to grow the local and UK supply chain for floating wind energy is not to wait until the industry is mature from having developed full scale commercial projects overseas but to grow the sector at home through a series of projects starting at, say, 30MW then moving to 100MW and on to 300MW before developing full scale commercial projects at greater than 500MW. Simply Blue Energy has focused so far on delivering these early projects for the benefit of the UK supply chain. This means that we will deliver some of the initial floating wind projects into the Contracts for Difference (CfD) programme expecting to be partaking in both AR5 (2023) and AR6 (2025). The Salamander project aims to act as one such

1 https://simplyblueenergy.com/salamander/

2 OREC for Crown Estate Scotland, Macroeconomic benefits of floating offshore wind in the UK, 2018

stepping-stone pre-commercial project in AR6, to bridge the development gap between the current operational floating wind projects and ScotWind projects.

In this response Simply Blue Energy acknowledges the huge success of the CfD programme in reducing the costs of the fixed offshore wind over the last ten years and we expect it to have the same impact on floating wind in the 2030s. However, we suggest that the strategic focus for the UK in the 2020s is to win the supply chain and innovation race against overseas competitors. When any project that has the potential to help deliver the UK industrial strategy goals and the levelling-up agenda is stopped by entirely cost-focused CfD process, a blow is delivered against that objective and the local supply chain supporting it. Before ScotWind, the cost to the consumer through the CfD system will limited because of the small size and quantity of projects and can be controlled through the Administrative Strike Price.

Key policy requirements

Simply Blue Energy presents the following key messages that it considers to be central to capturing the economic benefits whilst delivering the net zero ambition:

 Pre-commercial stepping-stone projects should be developed to enable the existing supply chain to prepare for the step change in offshore wind deployments in the 2030s with ScotWind. Our Salamander project is a precursor to ScotWind and aims to reduce floating technology risks, achieve cost reductions, and support the development of the supply chain.

 To realise the deployment and economic potential of floating offshore wind and wave energy in Scotland, the supply chain and port infrastructure need to be developed. Where there is insufficient time available to develop full-scale ports infrastructure, temporary, interim solutions should be considered.

 To be effective for innovative and smaller-scale technologies, CfDs must be both open to innovative technologies and not undo the work of local content initiatives (e.g. price pressure pushing contracts abroad).

 The CfD programme should be structured so as to allow innovative supply-chain supporting floating wind projects in Scottish waters as well as in Welsh waters to proceed so as to support supply chains in both nations. With the limited number of projects in AR4, AR5 and AR6 there focus should be on supply chain development not the cost of energy on what is a relatively small scale programme.

 Success for the Scottish supply chain from our Salamander project is dependent on the ability to achieve site security in a timely manner.

Yours sincerely,

Christoph Harwood

1) Scotland’s renewable energy targets

a. How effective has the setting of targets been in achieving ‘net zero’ emissions by 2050 (UK

Government) and 2045 (Scottish Government)?

Both the UK and Scottish Governments have taken positive steps to address the climate emergency in setting their respective targets. The targets are generally accepted as being feasible-yet-ambitious, in terms of timeline and technological ambition, but further policy intervention is necessary if the significant economic gains offered by the just transition are to be achieved, as outlined below. While it is one success to achieve the Net Zero targets from a technological and climate standpoint, there is a wealth of economic benefit to be gained through the just transition if local content is prioritised from the early stages, cultivating a strong and diverse supply chain primed to service the increasing offshore renewable deployments domestically and through exports. While the targets themselves are clear, the pathway towards them and enabling policies are less so. While developing Salamander, we have found that different policy stakeholders are not always aligned, sometimes taking different positions – especially with early-stage development. The lack of speed to reach alignment across these organisations which are not initially aligned can put off investors.

With renewable energy, the UK operates as a project-based economy (as opposed to one based on technology development). This means that the UK was well-placed to take on wind and solar PV energy projects, being that the technology was at or approaching commercial viability, often based on overseas development. Simply Blue Energy is of the view that floating offshore wind is an essential component of meeting government renewable energy targets with maximum UK content but still requires a managed roll out plan. With 200 MW of deployment, our Salamander project, which places a focus on local content, will contribute 20% of the UK’s floating wind target of 1 GW by 2030. As a developing industry, it is vital that assistance is given to it to allow it to develop. BEIS recognised this when it stated in its recent response to consultation on proposed amendments to Contracts for

Difference for Low Carbon Electricity Generation “Given the still relatively early stage of development of the floating offshore wind sector it may be necessary to consider introducing measures over the coming years to encourage early deployment and cost reduction”.3

Going forward, wave energy will be an essential element of the electricity mix thanks to its continuous and vast resource, coupled with its system balancing benefits. Exploitable wave energy resource in the UK has the potential to deliver 40-50 TWh/year to the national grid - a contribution of around 15% of the UK’s current electricity demand. By 2050, a potential 22 GW of wave capacity could be installed to harness this power. Simply Blue Energy therefore considers that wave energy could significantly add to the UK energy system during the 2030s if it is given the opportunities to grow in the 2020s. We believe that this technology could be deployed at significantly less than £100/MWh during the

2030s and this would be a valuable addition to the UK energy mix given its positioning away from the North Sea and the energy system benefits it delivers. Our preferred supplier, CorPower Ocean, is predicting costs lower than £75/MWh after 600 MW of deployment with significant cost reductions after that. Achieving this level of deployment by 2030 is a challenge given the time to develop projects but this and more could be delivered during the 2030s. While the cost of wave generation is higher than that of offshore wind, the asynchronicity of wave and wind resource reduces the need for battery storage with the cost of long term energy storage being the appropriate benchmark.

3 BEIS, Proposed amendments to CfD for Low Carbon Electricity Generation, 2018

b. What lessons can or have been learned from setting net zero targets?

The Net Zero targets have proven to be effective. They have built the UK’s credibility as a global leader in climate change mitigation efforts and have with the supporting policy stimulated investment into the necessary activities. The setting of targets emphasises the government’s commitment to facilitate action in this arena. Indeed, much of the low-hanging fruit – such as the decarbonisation of power – is on its way to being harvested and it is now time to address the more difficult challenges remaining, for instance the decarbonisation of heat and energy storage. The renewables industry is committed to cooperating with both the government and the oil and gas industry, particularly in respect of the role of hydrogen in this decarbonisation and the electrification of demand.

There is evidence from fixed offshore wind that appropriate policy leads to successful integration of innovative technology into the electricity mix. However, the achievement of the technological target alone – while a necessary pursuit – is not fully in the national interest. Effective CfD mechanisms are necessary to support the inclusion of projects prioritising the path to competitive local content in the decarbonised economy.

The Cobra consortium’s Kincardine Offshore Windfarm, a floating offshore wind array deployed 15km off Aberdeen, demonstrates how policy fails to incorporate prioritised local content into project development from an early stage. While the project will generate some supply chain activity locally during the project lifetime, the majority of the economic benefit associated with both the CAPEX phases and some OPEX will be lost to imports. The semi-submersible floating structures are designed by US-based Principle Power and built in Spain and Portugal by Navantia and Windar Renovables – both headquartered in Spain. They were imported via Rotterdam where the towers, turbines and blades were fitted, and installed off the coast of Scotland, without ever touching UK soil.4

Being at an earlier stage of development, wave energy offers an opportunity for the UK to get in at ground level; the game is all to play for, with no major competitors. While devolved governments in Wales and Scotland have offered capital support to wave technology developers there has been no effective wave energy revenue support mechanism since 2016. To capture this market there needs to be a sufficient revenue support system in place. In its current form, wave can nominally participate in the CfD programme, but has effectively been excluded due to the lack of useful minima. This has meant that Simply Blue Energy, an Irish firm, is currently developing the first global wave energy site of more than 5MW in Ireland where it believes there is a more supportive policy environment.

However, we sense that the UK Government intends to provide further support applicable for marine energy going forward, in the form of the minima within in Pot 2 which means that we are considering whether to develop a site for AR7 in 2027.

c. To what extent does the UK Government’s latest white paper – Powering our net-zero future

– ensure that renewable energy targets will be met in the UK.

Simply Blue Energy recognises a shift in the UK Government’s support for marine and floating wind energy with the newly constituted Pot 2 in the fourth CfD Allocation Round (AR4) and is hoping that this will lead to floating wind and wave energy development. We believe that the government has the

4 RenewableUK and Scottish Renewables, Floating Offshore Wind: The UK Industry Ambition, 2019 [https://www.scottishrenewables.com/assets/000/000/475/floating_wind_the_uk_industry_ambition_-

_october_2019_original.pdf?1579693018 Accessed 05/05/21]

right tools using capacity, Administrative Strike Price and minima to deliver desire outcomes. With this appropriate policy support, our Salamander project will deploy 20% of the UK’s Net Zero target of 1 GW of floating offshore wind by 2030 so ensuring that Scotland contributes towards these targets.

Offshore wind plays a key role in the UK Government’s Net Zero strategy, outlined in the late-2020 Energy White Paper. A key commitment of the PM’s Ten Point Plan in the Energy White Paper is to target 1 GW of floating offshore wind by 2030. 40% of this target would be satisfied by the Erebus project, to be the largest floating offshore wind array in existence once commissioned. Another key commitment is to capture 60% local content in offshore wind projects by 2030. Finally, the UK Government announced £160 million scheme supporting the development of offshore wind manufacturing infrastructure will revitalise coastal industrial infrastructure, such as ports. While £1.8 million in Scottish Government funding has been made available to ports and harbours to minimise the impact of Brexit, this funding is targeted at the fishing and seafood industry.5 We would urge UK and Scottish Governments to liaise in making available equivalent capital grant funding dedicated to the necessary upgrades to ports and harbours ahead of ScotWind.

Furthermore, floating offshore wind is highlighted as a priority area of the £1 billion Net Zero Innovation Portfolio, which aims to accelerate the commercialisation of innovative low-carbon technologies to achieve Net Zero. Ten priority areas will decrease the costs of decarbonisation and underpin innovation across the whole energy system.

As an Irish company, operating across British Isles, we have found the shifting position in Ireland on wave energy worth commenting on, to describe why we have more capacity being developed in Ireland than in Scotland. Like Scotland, Ireland has huge wave resource but there is no reason why Ireland should be surpassing Scotland in appropriate governmental intervention measures supporting wave and tidal stream technology development – especially when Scotland is a technology leader in this arena. However, Ireland’s commitment to wave energy technology development is clear through the Western Star Wave ‘Project Saoirse’, a pre-commercial demonstration wave energy conversion (WEC) facility 4-6 km (2.5-3.7 mi) offshore Co. Clare. Initially with 5 MW of capacity, it will facilitate necessary improvements to reliability and availability of WECs through testing in challenging but potentially productive conditions.

Seabed leasing

Given that Crown Estate Scotland is an independent body, both the UK and Scottish Governments should cooperate to encourage the delivery of Test & Demonstration projects, early-

commercial projects and full leasing rounds for floating wind and, in time, wave energy in the Scottish waters. This is one factor which would contribute to the Salamander project obtaining site security in a timely manner; a positive outcome from Salamander for the Scottish supply chain is dependent on this.

The ScotWind Leasing rounds will facilitate the necessary step-change in offshore renewable energy generation, contributing to the 2030 1 GW floating offshore wind target stated in the White Paper. It will enable Scotland and the UK to harness the significant opportunity offered by Scotland’s diverse water depths and consistent wind speeds for floating offshore wind deployments. To prepare for this step-change, Scotland’s supply chain and port infrastructure must be fit-for-purpose. It is critical that the valuable time leading up to ScotWind projects be used to strategically support local supply chains,

5 Scottish Government, Extra support for ports and harbours, 2021 [https://www.gov.scot/news/extra-support- for-ports-and-harbours/ Accessed 12/05/21]

enabling them to incrementally develop with each ‘stepping stone’ project, building capacity and capability.

A positive outcome from the pre-ScotWind Salamander project for Simply Blue Energy and the Scottish supply chain is dependent on our ability to achieve site security from Crown Estate Scotland for the site in a timely manner. Until site security is obtained, the Salamander project is operating at risk. In addition to this, due to the small size of pre-commercial projects, it is important that they be located close to the grid and/or demand centre. It is vital that the proposed Salamander site be

included in Marine Scotland’s plan for innovation and oil and gas decarbonisation projects6. While the importance of ornithological surveys and other ecological work carried out by Marine Scotland cannot be overstated, it is important that the new plan does not presume to curtail the development of projects, such as Salamander, near to the coast but allows this to be reviewed during the normal consenting process. As such, it is important for the industry to gain an understanding of the leasing characteristics on which CES will base their leasing rounds, following Marine Scotland’s plan as soon

If wave energy deployment is to radically increase, a review of the leasing for wave sites will need to be undertaken. Currently, only two options are available: either take over an unused lease from the 2014 leasing round; or apply for a testing and demonstration site for up to 30 MW deployments.

Ports

Ports’ infrastructure needs to be updated in preparation for the increased traffic arising from ScotWind. Happily, there is considerable overlap between ongoing activity relating to fixed offshore wind and legacy oil and gas infrastructure, such as ports and harbours, assembly, manufacturing and fabrication facilities as well as more specialist outlets.7 This should be considered as a valuable starting point for adaptation of ports for floating offshore wind and wave supply chains. Wave devices bring the added benefit in that ports servicing wave technologies don’t require the same depth at ports as those servicing floating offshore wind, so there is greater flexibility in the location of such ports.

Where there is insufficient time available to develop full-scale ports infrastructure for early projects, temporary, interim solutions should be considered so that local supply chain can still develop and benefit. While this might cause a temporary increase in costs, the economic benefit in the long term is important, given that ports are hub through which all supply chain will align.

To maximise the proportion of supply chain occurring in Scotland, technology suppliers should be encouraged to deliver technology aligning with Scotland’s current and future supply chain capability. For instance, the modular nature and low draft of the Ocergy floating wind foundation being investigated for the Salamander project provides clear benefits with its ability to be suitable for final assembly within Scotland. It allows for the sourcing of components from several fabrication facilities with rapid final assembly based on mechanical, non-welded, connections at the final assembly location. It is our belief that this technology is one of very few that could meet the required construction through-put for commercial scale deployment. The flexibility in the supply chain from

7 RenewableUK and Scottish Renewables, Floating Offshore Wind: The UK Industry Ambition, 2019 [https://www.scottishrenewables.com/assets/000/000/475/floating_wind_the_uk_industry_ambition_-

_october_2019_original.pdf?1579693018 Accessed 05/05/21]

ease of fabrication encourages local supply chain involvement, maximising local content retained by the project.

Traditional fabrication of floating offshore wind structures has relied on a large amount of space to enable fabrication on the quayside or within dry-docks but as turbine sizes increase the final structures are likely to exceed 100m across. This will inevitably limit the ability of single facilities to service the demand for large scale projects that will require in excess of 50 units for build out. Supply chain will welcome more modular designs especially if the drafts are significantly smaller compared to other foundations. Figure 1 illustrates the importance of low draft in the accessibility of ports.

Figure 1 Illustration of the increased accessible port facilities when draft requirements are ≥7m rather than ≥10m

For the Salamander project, Simply Blue Energy has identified five potential ports across the east coast of mainland Scotland and in Shetland with sufficient quayside infrastructure to serve as marshalling locations, and four fabrication sites which could provide fabrication services for modules. The predominantly shallower ports at Burntisland in Fife (BiFab), Nigg Energy Park, the Port of Cromarty Firth, Dundee and Aberdeen South have been found to suitable potential marshalling hosts to the OCG-Wind foundation considered for the Salamander project over other design concepts requiring greater draft allowance.

Revenue support

While the CfD initiative led by the UK Government has proven to benefit onshore and fixed offshore wind, it is crucial that CfDs avoid unintended consequences borne of price and phasing constraints. In previous offshore wind projects, we have seen vital manufacturing contracts awarded to overseas firms, due to price pressures caused by the CfD process; consequently, risk and cost reductions are pushed down the supply chain. Salamander is planned as a stepping-stone project to support the development of the floating wind supply chain sector in Scottish seas and across the UK. It will offer UK businesses the chance to engage with smaller projects before larger ones are developed in this area in the 2030s. It is important that there is sufficient and effective CfD support for stepping-stone projects across the UK in floating wind so that these projects can serve their purpose.

If support is only available through CfD competition to a single project of each technology type in a particular geography, supply chain learning opportunities will be limited to that geography, undermining UK capability in the long term.

Furthermore, it is important that CfDs do not inhibit the ability of the UK supply chain to deliver through the use of deadlines that they cannot meet. Restrictions might require this project to target a broader supply chain outside the UK in order to manage its exposure to delays so undermining the government’s desire for increased UK content.

2) Renewable energy sources

a. What variables have contributed toward wind energy providing more energy to the grid than any other renewable source?

For both wind and wave generating technologies, Scotland has a significant advantage due to its consistent winds, active seas, and diverse bathymetry profile. The primary factor in wind energy’s dominance in the UK renewables mix, onshore and offshore, is that it is the least technologically complex, so was developed first. Furthermore, the technology was developed outside of the UK (in Denmark, who shouldered the investment costs) and imported as a commercial product. The seawater conditions in which marine technologies must operate and survive means that the development of marine technologies is more complex, and therefore initially more expensive, so development started later. The enduring prevalence of wind turbine technology and consequent technological maturity means that the UK’s project-based economy is in a strong position to deliver

the pipeline. Access to effective subsidy in the form of CfDs has enabled the UK to take advantage of this onshore and offshore wind resource. For marine technologies, there are valuable lessons to be learned from onshore wind, and the progression to fixed and floating offshore wind deployments. The current CfD framework that has led to such success for fixed offshore wind focuses on supporting projects using established technologies rather than supporting the development of new technology. Revenue support in some form dedicated to innovative technology development would level the playing field for wave and tidal technologies.

The Danish Wind Model

The reason that wind energy was able to take off was because of the significant support it received from the Danish government to rectify the market failures that accompany the decarbonisation rollout. The Danish model of early and adaptive governmental support for onshore wind through to commercialisation is widely considered a subsidy success story. Over 40% of Denmark’s electricity is generated from wind energy, and its export market is worth £54.4bn DKK. Since the oil crisis in the mid-1970s, Denmark has positioned itself ahead of the curve by supporting the onshore – and subsequently offshore - wind industry with a range of subsidy structures specific to the needs of the sector and market environment. The Danish government has supported wind developers with a feed- in tariff scheme and latterly replacement certificates incentivising upgrades. Combined, the two schemes are estimated to have reduced carbon emissions by 57.4 million metric tons of carbon dioxide, demonstrating the value of the initiative to the Net Zero target. A highly and deliberately decentralised industry (88% of the close to 3000 producers included in the 32-year study period of

1981 to 2011 operated no more than two turbines)8 maximised the semi-organic development of a diverse and localised supply chain. Diverse supply chain activity in proximity to deployment sites reinvigorates and brings economic benefit to rural and coastal communities often overlooked by mainstream industry.

A 2020 Cornell study identified government policies as the ‘primary driver’ of the wind industry’s growth and development, over technological progress alone. 9 While market pull mechanism support is generally applied to support routes to market of the technology, it can be implemented to encourage diversity of supply through the support of smaller scale producers.

Figure 2 highlights role of revenue support (‘production subsidies’, blue line) in the cultivation of a robust turbine manufacturing industry, a large proportion of which are exported for installation outside Denmark.

Figure 2 The Danish Model: The number of wind turbines produced by Danish manufacturers for domestic and export markets

The above highlights the demonstrable efficacy of governmental intervention such as revenue support when appropriately applied to innovative technologies Unlike wind energy technology, which was developed elsewhere and imported for commissioning in the UK, marine energy is a UK-developed technology, and so should not be viewed through the same lens as offshore wind when devising new subsidy arrangements. It was unfortunate that the technologies were exclude from feed-in tariffs which would have been useful but more recently, in 2016 marine technologies were effectively

8 Dean, J. (2020), Policy, not tech, spurred Danish dominance in wind energy, Cornell Chronicle [https://news.cornell.edu/stories/2020/11/policy-not-tech-spurred-danish-dominance-wind-energy, Accessed 05/05/21]

9 Cook, J.A. and Lin Lawell, C. Y. C. (2020), Wind Turbine Shutdowns and Upgrades in Denmark: Timing Decisions and the Impact of Government Policy, The Energy Journal, Vol. 31 No. 3 [https://www.iaee.org/energyjournal/article/3503, Accessed 05/05/21]

excluded from the CfD scheme with the removal of the minima in 2018; and the prohibitively long timeline to revenue generation. The removal of fixed offshore wind into Pot 3 is welcome, but for floating offshore wind, wave and tidal technologies to benefit, some Pot 2 capacity should be ringfenced to guarantee their participation in the programme. Furthermore, the CfDs should factor local content into the Allocation Rounds so that higher-LCOE projects with higher proportion of local content are not disadvantaged relative to less expensive projects that would bring less long-term economic benefit to the UK economy. Finally, the minima should be adequate to grant multiple projects of the same technology the chance of being awarded a contract; equivalent projects deploying in the North Sea and Celtic Sea – when local content is prioritised - would bring diverse supply chain benefits.

CfDs are demonstrably effective for fixed offshore wind. Costs are approaching negative subsidy levels, as subsidies have proved so successful in bringing costs down to commercially competitive levels, that costs have inversely surpassed expectations by up to 30 years.10 The third allocation round of CfDs saw record low prices for UK offshore wind, with the 5.5GW of capacity procured at

£39.65/MWh and £41.61/MWh for projects that will be commissioned in 2023 to 2025. These prices represent a 65% reduction in the cost of offshore wind since the first allocation round in 2015. This rate of cost reduction has substantially surpassed the expectations of forecasts, with the most ambitious pre-CfD predictions suggesting an offshore wind cost of £95/MWh by the early to mid- 2020s.11 In 2020, BEIS reported zero impact on the Monetary Budget due to the fact that the strike prices are below the forecast power market prices. It should be recognised that these cost reductions have been achieved in part to the increase is scale of projects and the increase in size of wind turbines. New technologies need also to go through this journey.

Figure 3 illustrates the projected declining cost to 2040 of floating offshore wind generating costs relative to the UK wholesale electricity price, for a range of scenarios run by OREC. Parameters varied across the scenarios were: the level of fixed and floating offshore wind deployment in the UK, the proportion of floating offshore wind occurring in Scotland only, and the level of innovation driving cost reduction. This shows that a suitably designed CfD programme will deliver not only low cost energy but also can enable the local economies to capture more of the value in floating wind than has been so far achieved in offshore wind.

10 Wiser, R. et al (2016), Expert solicitation survey on future wind energy costs, Nature Energy 1 (10) [https://www.researchgate.net/publication/308036840_Expert_elicitation_survey_on_future_wind_energy_cos ts Accessed 05/05/21]

11 EnergyUK, Energy UK Response – Contracts for Difference (CfD): amendments to the scheme 2020, 2020 [https://www.energy-uk.org.uk/publication.html?task=file.download&id=7532 Accessed 07/07/2021]

Figure 3 UK FOW cost reduction compared with BEIS forecast wholesale electricity price (OREC, 2020)12

b. Why does marine energy account for such a small proportion of the total energy output of renewables in Scotland?

technologies must operate and survive means that their development is more complex, and therefore more expensive, so started later. The enduring prevalence of wind turbine technology and

consequent technological maturity means that the UK’s project-based economy is in a strong position to deliver the pipeline. Access to effective subsidy in the form of CfDs has enabled project developers in Scotland to take advantage of this offshore wind resource.

For marine technologies, there are valuable lessons to be learned from onshore wind, and the progression to fixed and floating offshore wind deployments. The current CfD framework that has led to such success for fixed offshore wind focuses on supporting projects using established technologies rather than supporting the development of new technology. Subsidy in some form dedicated to innovative technology development would level the playing field for wave and tidal technologies.

Renewables Obligation Certificates (ROCs) were and CfDs are effective at supporting imported technology for deployment within projects, but less so for supporting the development of new technology domestically. Technology needs to be developed, funded through capital investment or

12 OREC for Floating Offshore Wind Centre of Excellence, Floating offshore wind: cost reduction pathways to subsidy free, 2021 [https://ore.catapult.org.uk/wp-content/uploads/2021/01/FOW-Cost-Reduction-Pathways- to-Subsidy-Free-report-.pdf Accessed 11/05/21]

some form of revenue support, and subsequently needs to be supported to full commercialisation through revenue support granted to project developers. The Marine Energy Council (MEC) is in dialogue with the government regarding the introduction of an Innovation Power Purchase Agreement (IPPA) dedicated to supporting technology developers, and the use of CfDs for project developers.

Technology development in Scotland has continued despite the lack of revenue support. Research and development activities by Wave Energy Scotland (WES), Orbital Marine, Nova Innovation and Sustainable Marine Energy are testament to this. However, for Scotland to remain attractive to companies, revenue support needs to be designed to support of technology development. Edinburgh- based Sustainable Marine Energy are now deploying a 9 MW project in Canada, given the strong support from the Canadian government in capital and revenue support.

Sadly, development of wave and tidal energy has slowed down since 2016 when marine technologies effectively became ineligible for CfDs. There is hope that minima allocations for floating wind, wave and tidal stream technologies will enable these technologies to progress without creating excess costs through the clearing up process. Where CfDs are intended to support large-scale projects, an alternative revenue support mechanism would benefit smaller-scale, early stage technologies which have been developed in Scotland.

c. What is being done to develop and research other forms of renewable energy in Scotland such as wave/tidal energy and carbon capture usage and storage (CCUS) energy or others?

Research and development of wave and tidal energy in Scotland benefits from a range of public funding streams, such as that granted by the EPSRC’s Supergen ORE Hub or the Highlands and Islands Enterprise Wave Energy Scotland programmes. Despite this, wave and tidal deployments are behind those of offshore wind because, from a technological standpoint, they are being developed from scratch. Offshore wind is based on the design of onshore wind, with the foundations and moorings being the primary novel element. The technological challenges facing tidal stream and wave relate to their operation in the marine environment.

Wave Energy Scotland (WES) is providing stage-gate funding for research and development activity aimed at the progression of wave energy devices to higher TRLs.13 Funding is applied across a range of technical programmes targeted at specific challenges to be overcome before commercialisation. For instance, the salinity of the seawater in which the devices must operate is corrosive to most materials commonly used in the manufacture of energy generation technology. Any moving parts compound/expedite this corrosion, leading to more frequent and/or serious servicing. WES’ Materials and Manufacturing programme is aimed at the development of materials and manufacturing methods that can withstand these conditions. Related to this, O&M is more complex, and therefore more expensive. Labour needs to operate underwater, which increases the health and safety requirements, along with the skills and experience requirements of the workforce. Furthermore. deployments are generally further away from the shore, particularly for wave and floating offshore wind. This increases costs associated with cabling and leads to electricity system losses. As a technology-agnostic project developer, Simply Blue Energy welcomes such support of decarbonisation technology development from Scottish Government. The European Marine Energy Centre (EMEC) in Orkney hosts many wave and tidal projects for testing in real-sea conditions. CorPower’s half-scale C3 WEC was tested at

13 https://www.waveenergyscotland.co.uk/programmes/

EMEC’s Scapa Flow scale test site in Orkney in 2018. The learning derived from this testing is

incorporated into wet tests behind the development of their next generation of WEC technology.

What is not clear yet is how a return on this investment will be realised without an appropriate revenue support system, such as an IPPA or other suitably-designed CfD mechanism.

Employment in renewable energy sector

a. What policy decisions do the UK and Scottish Governments need to make to increase the number of jobs in the renewable energy sector?

ORE Catapult have produced the report “Analysis of Job Creation in the Erebus Floating Offshore Wind Project” for Blue Gem Wind. In this analysis, two scenarios are considered: a ‘Non-UK port’ strategy, and a ‘UK port’ strategy to show the likely lower and upper limits of what is likely in terms of UK jobs supported by the 96 MW Erebus project. In the ‘Non-UK port’ scenario, the project supports around 400 direct and 335 indirect FTE years in the UK during construction. By bringing some key supply chain activities to the UK, the project could generate nearly 400 additional FTE years during construction, a 50% increase, as well as an additional 20 long term FTEs during the operational phase of the project. The ‘UK Port’ scenario, which assumes substructure and turbine final assembly and installation, and greater UK activity during the operating life, expects to support over 600 direct and 500 indirect FTE years during construction. Around 40 direct and 33 indirect long term jobs are supported by the project in this scenario. In terms of value added to the economy, this equates to an additional £73m in total GVA during construction and an additional £2m per year during operation. The use of UK ports in Erebus could generate a higher level of UK jobs not only in this project but the long term pipeline of activity in the region we expect to be associated with the upcoming Crown Estate Celtic Sea seabed leasing round and longer term UK floating wind development.

Approach to capturing local content

It is important that the pricing mechanism with the CfD system encourages local content and hence local jobs rather than works against it. This would enable stepping-stone wave and floating offshore wind projects to participate, carrying the load between now and 2030. The CfD Supply Chain Plan for larger projects helps to maximise the supply chain activity taking place locally, does this by assessing applications on the extent to which they:

- support the development of competition in supply chains;

- support innovation in supply chains; and

- support the development of skills in supply chains.14

However, the Supply Chain Plan only applies to projects of >300 MW so does not encourage stepping stone projects. From the inception of the Salamander project, we have endeavoured to take a completely different approach to previous developments prioritising local content over other considerations. Our approach focuses primarily on the capability and constraints within the current Scottish supply chain. The primary driver of our foundation design and designer is the potential for long-term economic benefit to the Scottish supply chain. We therefore undertook an extensive review of the Scottish supply chain prior to our consultation with foundation designers and providers. This allowed us to select a technology that we believe has the highest potential for local content in fabrication and assembly for both Salamander and future larger commercial projects. We intend for Salamander to be a template for the successful construction of floating offshore wind solutions for

14 BEIS, AR3: Contracts for Difference Supply Chain Plan Guidance, 2018

projects in Scottish waters. Feedback from the supply chain regarding this approach was positive; suppliers are receptive to the stepping-stone concept and agreed that floating wind projects of >10 units ahead of the ScotWind GW-scale projects would be positive for the industry. The fact that the foundation design was carried out taking the Scottish supply chain constraints into account rather than the other way around was also welcomed by the supply chain.

Similarly, the heavily modular construction of the Ocergy foundation used in the Salamander project will allow for sourcing of components from several fabrication facilities with rapid final assembly based on mechanical, non-welded, connections at the final assembly location. It is our belief that this technology is one of very few that could meet the required construction through-put for commercial scale deployment. The flexibility in the supply chain from ease of fabrication encourages local supply chain involvement, maximising local content retained by the project.

Furthermore, early engagement with Salamander’s supply chain means collaboration occurs from the beginning of the project. This allows for a clear understanding of capabilities from the early stages and fosters a close collaborative relationship.

However, the pricing mechanism of the current CfD system will undermine this position and indeed drive to consider more immediately-cost effective solutions (with lower local content) through imports. This would be a last resort and is not something we are planning to do, and we are in dialogue with BEIS about how this can be avoided.

b. How effective has the renewable energy sector been in producing careers for Scottish people?

While this is not our area of expertise, we will reiterate that if we are successful in the above supply chain strategy, the arising career opportunities will be rich, diverse and sustainable. Much of them will share commonalities with the legacy oil and gas workforce so will aid the just transition.

Otherwise, as of 2017, offshore wind projects in the installation and operations phases had an estimated 32% UK content. It is projected that up to 65% UK content could be captured to 2030, servicing the over 19 GW of projected capacity, if the UK focuses efforts to increase domestic content in both currently-strong areas and areas offering the opportunity to develop strength. Successfully strengthening the domestic supply chain to this extent would yield a European export opportunity of up to £9.2bn annually.15 The high proportion of these projects occurring in Scotland, based on the Crown Estate Scotland’s upcoming leasing round illustrates the significant supply chain activity that will be located in Scotland, if stepping-stone projects enable the Scottish supply chain to develop.

Floating offshore wind stands to contribute at least 10 GW of the UK’s 50 GW offshore wind capacity pipeline by 2050. In the delivery of this capacity, floating offshore wind deployments are expected to contain 57% UK content by 2031, and 65% by 2050.16 This high level of UK content means that significant supply chain activity is stimulated, supporting new jobs and with legacy workforce retained from the oil and gas sectors.

c. What UK and Scottish Government support would facilitate the growth of jobs in this sector?

Stepping stone projects such as Salamander would significantly contribute to the sustainable growth of jobs, by supporting the incremental development of the domestic supply chain in preparation for

15 OREC, The Economic Value of Offshore Wind, 2017

16 OREC for CES, The macroeconomic benefits of floating offshore wind in the UK, 2018

ScotWind and other future increases in demand and the requirements for this projects have been described throughout this response. However, for the sake of clarity they are in summary.

 A clear pipeline starting with a programme of stepping-stone projects that allows the industry to develop alongside the growth in projects.

 A revenue support programme in the 2020s that supports the development of new technologies and supply chain in these stepping stone projects before opening the market to full competition in the 2030s

 Support for ports and other infrastructure as hubs of industry and employment growth allowing for the fact that some temporary facilities might be required to enable early actions.

d. What do the UK and Scottish Governments need to do to achieve a ‘just transition’ for workers in

the oil and gas industry to successfully redeploy to the renewable sector or other sectors?

Striking the balance between supporting a just transition and achieving decarbonisation targets will be a challenge. While governmental support to date has enabled some firms to thrive in the domestic and export markets, Scotland has so far been unable to cultivate a robust and competitive manufacturing base for renewables. Coupled with the far lower labour-intensity of offshore wind O&M relative to oil and gas activity, this highlights the importance of supporting incremental development of local supply chain capability through stepping stone projects. Simply Blue Energy is contributing to the just transition by collaborating on such offshore wind projects with oil and gas firms such as Subsea 7, Total and Shell via joint ventures.

The just transition can be therefore applied though support of stepping stone projects in Scotland by the UK Government to the floating offshore wind and wave energy sectors through the cultivation of stepping stone projects and nurturing opportunities of the optimal nature and scale. Stepping stone projects allow the local supply chain to gear up ahead of the large 1GW+ commercial scale projects expected in the early 2030s, some of which will come from ScotWind. Optimal opportunities would take advantage of legacy expertise within the oil and gas industry, applying cross-cutting skills to the new requirements and challenges presented by floating offshore wind and wave energy. Doing so would facilitate the achievement of Net Zero climate and deployment targets while empowering the legacy workforce and burgeoning supply chain to flourish with longevity.

There is evidence that the opportunity to build strength into the decarbonised economy through local content is being overlooked. While two floating offshore wind demonstration projects are currently underway in Scottish waters (Kincardine Floating Offshore Wind Farm and Hywind Scotland), the lack of local content in the supply chain echoes that of fixed offshore wind projects of the past: manufacturing and construction are entirely imported, with only O&M elements serviced locally.

While UK expertise has played an important role in the delivery of the Hywind array, just over one third of the companies directly involved in its supply chain – 13 of the 36 total - were based in the UK, with the lion’s share of core services being provided by other European-headquartered firms.

Furthermore roles played by UK firms are largely service-based rather than technical.17 Equally, a similar proportion of companies involved in the delivery of the Kincardine project are headquartered

in the UK – eight of the 21, or just over a third. As with Hywind, UK supply chain activity was largely service-based, focusing on surveying (Atkins, Fugro), cable installation (Global Energy Group), O&M (Kinetic Renewables Services), and metocean (Partrac). 18

While it is clear that the Scottish Government understands the challenge, and has put forward a mechanism to prioritise local content on ScotWind projects, there will still be challenges. Given previous experience of Hywind and Kincardine, there is a need for interim stepping stone projects in the mid- to late-2020s to give local supply chain the opportunity to scale up from the current 30- 50MW scale Hywind Scotland and Kincardine projects to the >1GW commercial scale projects expected in the early 2030s, some of which will come from ScotWind. The aim of these stepping stone projects is to help future projects realise their supply chain benefits. Our Salamander project seeks to bridge this supply chain gap by acting as one such stepping stone project to allow the local supply chain to gear up ahead of the ScotWind deployments. By developing projects such as Salamander we believe that the local content retained by Scotland for its projects will be greatly improved.

Compare Figure 4 and Figure 5 for the for an indication of the Scottish supply chain opportunity lost to imports. While two of the three majority pipeline projects occur in Scottish waters – around a third of capacity to 2022 - the UK has not captured any market share for foundation design. The foundation being the defining factor of floating offshore wind relative to fixed, there have evidently been opportunities seized by global competitors to deliver the technology now hosted by the UK.

Figure 4 Cumulative installed capacity to 2022 by nationality, excluding early planning and decommissioned projects (Source: Hannon et al, Offshore wind, ready to float? Global and UK trends in the floating offshore wind market (2019))

Figure 5 Cumulative number of projects by foundation designer nationality (Source: Hannon et al, Offshore wind, ready to float? Global and UK trends in the floating offshore wind market (2019))

3) Intergovernmental relations

a. How effective have the Scottish and UK Governments been in harnessing Scotland’s

renewable energy potential?

Evidently, both governments have had great success in policy support driving deployment of offshore wind. However there is misalignment in their approaches to supporting marine energy. While Scotland continues to support wave (and tidal), the UK Government has pulled back from doing so to some extent. Scotland remains focused on technology development, with stage-gate funding for wave energy via the WES programmes and for tidal via the Saltire Prize. Conversely, the UK Government focuses on project development through the CfD system.

Encouragingly there is currently increasing alignment between the two on the importance of supply chain, local content and economic benefit. There is therefore hope of increased support to ensure projects with strong supply chain benefit and local content are supported by devolved administrations.

One issue to address is that revenue support from the UK Government for projects in Scotland benefit the Scottish economy and supply chain only but are incurred by consumers or taxpayers across the UK. It should be noted that the Welsh Government is considering a revenue support model for early technology marine energy projects in Wales and it is hoped that the Scottish Government might do the same if the UK Government does not deliver something meaningful. However, given that supply chains stretch across the UK there is still a strong argument for a UK wide revenue support system across all of the UK.

Under the Scottish Government’s jurisdiction, Crown Estate Scotland should consider supporting the rapid leasing of small technology projects, rather than limiting their attention to large scale rollout. Similarly, the UK Government should investigate ways to make sure high local content is rewarded in CfDs as discussed elsewhere in this paper.

There is a need for clarity around where responsibility for port upgrades rests within the political system as these are a vital requirement for maximising local content.

b. How effective has consultation between the two Governments been on the development and design of renewable policies?

While we cannot take a view on the efficacy of the consultation, we have a view on the past misalignment of support for new technology and supply chain. We are, however, encouraged that this alignment appears to be increasing.

Intergovernmental alignment is required on the support for marine renewable generation technologies as discussed throughout this response. Due to the competitive element of the CfDs, there is a risk that they fail to support economic development in addition to technological progression. For instance, when local content is disregarded in favour of imports, a technology developer may be able to deploy at a lower cost and therefore be considered more favourable for a CfD under the present structure. However, that project would cultivate negligible benefit for the domestic economy or incremental development of the domestic supply chain that would equip the UK to lead the global market. Conversely, a project which prioritises local supply chain from the early stages not only mitigates the economic losses associated with imports but fosters the local supply chain throughout the project progression and creates export opportunities. Due to the initial higher costs of local procurement (forgoing potentially cheaper components subject to competition on the global market), the LCOE of this project could potentially be higher than the imported alternative, meaning it would be passed over for a CfD.

The Crown Estate and Crown Estate Scotland, as leasing bodies, need to have some minimal coordination to ensure projects are not disadvantaged in any particular jurisdiction. For example, the current pre-commercial leasing round on the Celtic Sea, with a limit of 300 MW, while the current limit in Scotland is 100 MW. The size of Scottish projects must be enabled to keep pace with England and Wales; if not, floating offshore wind projects in Scotland will be disadvantaged in future CfD Allocation Rounds.

c. What discussions took place between the Scottish and UK Governments in preparing the Energy White Paper?

We are not aware of the details of such discussions. It has been published that the Scottish Government played a key role in the development of the UK Offshore Wind Sector Deal, to ensure that Scotland will stand to gain the long-term benefits as the deal is delivered.19

19 Scottish Government, Sectoral Marine Plan for Offshore Wind Energy, 2020

d. How will the Energy White Paper affect the renewable energy sector in Scotland?

The Energy White Paper stands to be hugely impactful if alignment between the UK and devolved governments is achieved to deliver the following:

 A clear pipeline starting with a programme of stepping-stone projects that allows the industry to develop alongside the growth in projects;

 A revenue support programme in the 2020s that supports the development of new technologies and supply chain in these stepping-stone projects before opening the market to full competition in the 2030s; and

 Support for ports and other infrastructure as hubs of industry and employment growth allowing for the fact that some temporary facilities might be required to enable early actions.

The Scotland Offshore Wind Energy Council (SOWEC) states that the Scotland should seek to deliver at least 8 GW of offshore wind in Scottish waters by 2030 if it is to meet its share of the UK Sector Deal’s targets.20 This deployment would increase the number of jobs supported by offshore wind in Scotland by 75% of 2019 values to over 6000. Stepping-stone projects such as Salamander would significantly contribute to the achievement of this aim, while supporting the incremental development of the domestic supply chain in preparation for ScotWind and other future increases in demand.

System Balancing

By looking at the long term, the Energy White Paper has to take a whole system approach. This should include having the appropriate mix of technologies and locations for developing power minimising the need for expensive long term storage.

The asynchronicity of offshore wind and wave deployments brings significant benefits in terms of this system balancing –. The changes under which the UK energy system will undergo due to decarbonisation efforts, such as increased demand arising from increased electrification, will have implications on the time of energy generation and the manner in which power is transferred across the National Grid. Grid capacity is critical for the success of energy projects off Scotland’s coasts and we would encourage both Governments to cooperate to achieve the shared objective of an energy system that is fit for different regions and technologies.

Independently operating, floating wind, wave and tidal stream generating technologies bring system benefits through the uncorrelated nature of the weather systems and energy sources around the UK. The continuous nature of tidal stream and the time lag from wind of wave energy resources could result in generation profiles which are more predictable than other stochastic renewables, such as solar and wind, and often temporally offset, meaning that a future energy mix which includes wave and tidal energy alongside wind and solar could provide more consistent generation than any of these technologies in isolation. This in turn could lead to improvements in price volatility, system balancing costs and security of supply indices (for example through the loss of load expectation).21Specifically, Simply Blue Energy believes that there are system benefits from delivering floating offshore wind and wave energy sites in the North Sea, and further south in the Celtic Sea. These system benefits have been identified as coming from two sources:

20 Scottish Government, Sectoral Marine Plan for Offshore Wind Energy, 2020

21 Supergen ORE, Response to BEIS Marine energy - A call for evidence on the potential of marine energy projects in Great Britain, 2020

Floating Wind

Celtic Sea weather systems; a report commissioned by Simply Blue Energy and undertaken by Wave Venture Ltd3 established that wind resources in the Celtic Sea and North Sea have a low

correlation. There is a time lag of 15hrs between the weather systems leading to improved energy supply for the UK if Celtic Sea wind farms are developed.

Wave Energy

Wave asynchronicity with wind; there are two studies that support the deployment of wave technology with wind to deliver system benefits. A study done by DeSolve, a leading Energy Systems consultancy company, showed that the lowest energy system cost for California, Pacific West and the Interior West of the USA would include 40GW of wave energy by 2040 and 55GW by 20504. This is based on the benefits of the lack of synchronicity between wave energy and other generating technologies. Figure 6 illustrates the different seasonal and temporal generation profiles of wave, offshore wind and solar technologies.

Figure 6 Asynchronicity of wave, offshore wind and solar electricity generation 22

To illustrate the synergies between these two marine renewables, Seabased AB, a Swedish wave technology developer studied the weather systems of Galway Bay in Ireland. Historical data from wind and wave conditions showed how combining wave and wind could more than double the

22 CorPower, 2019

baseload available to the grid from a single ocean power facility. Wave and wind peaked at different times meaning that wave peaked when wind waned, and vice-versa.

These reports are providing input to a study being carried out by the Offshore Renewable Energy Catapult (OREC) into the system benefits that can be delivered by marine energy for the TIGER project and to the report also being delivered by OREC for the Floating Wind Centre of Excellence. The former will be available later this year and the latter is available now.23

Hydrogen

If hydrogen is to be considered as a key element for the achievement of Net Zero targets, then clarity on the route to market is needed. Simply Blue Energy is currently exploring alternative routes to market for a number of alternative renewables interests, such as hydrogen production. We believe hydrogen is an ideal energy vector for combination with other technologies, such as floating wind or wave energy, given most of the resource is in areas where grid availability is scarce. Furthermore, hydrogen can help decarbonize sectors that are crucial for achieving net zero such as transport or heating.

In order to push green hydrogen forward, a revenue support mechanism is required given the price per kg for green hydrogen is too low to make it a viable alternative for project developers. Simply Blue is aware BEIS currently is looking at business models for blue and green hydrogen support. We believe it is important these business models support combinations such as floating wind and hydrogen. The CfD mechanism has been deployed to support deployment of renewable energy technologies and given floating wind and hydrogen are both essential for achieving net zero by 2050 the Government needs to ensure there are adequate mechanisms to support both technologies, separately and in combination.

e. How can the UK and Scottish Governments work together effectively to achieve their respective targets of net zero by 2050/2045?

Supply Chain

The UK is currently at the forefront of the development, adoption, and export of Offshore Renewable Energy (ORE) technologies. If this world-leadership is to be maintained, the UK and Scottish Governments must continue to support supply chain activity and ports infrastructure as described in this submission.

Ports

The most important area of cooperation is in the area of supply chain development and support. There is the opportunity for a collaborative approach to a port strategy in Scotland to support renewables, and Scottish Government and UK Government should identify areas for cooperation and potential co-investment. The role ports will play in local supply chain benefits should not be underestimated and currently there are challenges for Scottish ports to support, in particular

the fabrication, assembly and integration of platforms and wind turbines due to the scale and development of floating wind.

23 OREC for Floating Offshore Wind Centre of Excellence, Floating offshore wind: cost reduction pathways to subsidy free, 2021 [https://ore.catapult.org.uk/wp-content/uploads/2021/01/FOW-Cost-Reduction-Pathways- to-Subsidy-Free-report-.pdf Accessed 11/05/21]

Scotland’s ports must be fully equipped and fit-for-purpose for the rapid expansion of offshore wind expected with the implementation of ScotWind. In its Offshore Wind Policy Statement, the Scottish Government highlights the case for stepping stone projects by stating that ‘the Scottish supply chain must be fully prepared, with the capability and capacity required to deliver floating offshore wind at commercial scale’.24 Crown Estate Scotland posits that there is ‘significant risk that existing port capacity will be insufficient to support the offshore wind build-out rates required in Scottish waters to meet the UK-wide net-zero target’, concerning both construction and Operations and Maintenance (O&M) project phases.25 As such, policy should focus on port upgrades to ensure that the ports are fit for purpose for floating wind in particular.

Requirements unique to floating offshore wind include a much deeper bathymetry profile. If there is inadequate time to fully develop port infrastructure ahead of the stepping-stone project pipeline,

temporary solutions should so that a lack of infrastructure doesn’t impede the development of the supply chain. It is understood that the £160m funding being invested by the UK Government into port infrastructure for offshore wind is destined for the east coast of England but further port investment should be encouraged for Scottish ports through subsequent rounds. Crown Estate Scotland recommends a number of actions, including collectively aiming to increase large port capacity that is suitable for marshalling and assembly activities, acting as a key enabling action for growth of domestic manufacturing; support for strategic port planning for offshore wind; and development of optimal O&M facilities. 26

Ports can be funded in two primary ways: the award of a higher CfD, with the recognition that this would only be for a limited number of projects; or capital grant funding. Within the CfD framework, it would be in the national interest for projects of equivalent technology type to be able to both participate in the programme in both Scotland and Wales, because the accompanying supply chain activity would empower incremental supply chain development in diverse geographies. Likewise, we would urge Scottish Government to make available equivalent capital grant funding dedicated to the necessary upgrades to for ports and harbours ahead of ScotWind.

The Scottish Government has recognised the potential economic growth through the development of ports in their new model for green ports. The model focuses on inclusive growth, fair work practices and delivering a net zero economy. The Scottish Government’s proposal states that operators and businesses benefiting from green port incentives would have to commit to living wage obligations and the support of ‘sustainable and inclusive growth in local communities’. In a letter to the UK Chief Secretary in March 2021, Scottish Trade Minister Ivan McKee stated the need for green ports in Scotland have equivalent access to starter funding to freeports in England.27 The UK Government’s Free Ports proposal aiming to develop ports as ‘business and enterprise hubs’ and will be funded as such.

May 2021

24 Scottish Government, Offshore Wind Policy Statement, 2020

25 Arup for Crown Estate Scotland, Ports for offshore wind: a review of the net-zero opportunity for ports in Scotland, 2020

26 Arup for Crown Estate Scotland, Ports for offshore wind: a review of the net-zero opportunity for ports in Scotland, 2020

27 Scottish Government, Delivering Green Ports, 2021 [https://www.gov.scot/news/delivering-green-ports/ Accessed 11/05/21]