Sturgeon humiliated as Scotland missed ‘£60bn surge from energy deal’

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Scottish First Minister Nicola Sturgeon has been humiliated as reports suggest that Scotland is expected to miss out on £60billion in earnings after “underselling” the leasing rights on many of its offshore wind projects. The ScotWind leasing process, which was hailed by Ms Sturgeon as a “truly historic” opportunity for Scotland’s net-zero economy, enabled developers to apply for seabed rights to plan and then build wind farms in Scottish waters. According to the Crown Estate, as much as 27.6GW of new generating capacity will be built over the next decade as a result.

Their auction last year sold off numerous seabeds to multinational corporations and raised £700million which was seen as a cheap price compared to similar schemes in the UK and England which generated up to 18 times that for the public purse.

A total of 20 ScotWind projects were offered the rights to develop offshore wind power, which together were estimated to eventually generate enough power to supply over 14 million homes.

Now, the Scottish government has been slammed after reports that the projects were sold too cheaply, resulting in the public purse losing £60billion due to nearly two-thirds of the potential supply chain bonanza going elsewhere, according to the Herald on Sunday.

Over £47billion of the £76.5billion of supply chain commitments covering the first six years of operation are set to leave Scotland, with the commitments covering investment in development, manufacturing, installation and operations.

Think tank Common Weal who investigated ScotWind, described it as a “financial disaster” after discovering that the Scottish government could have filled up the public purse with much higher profits.

They netted a one-off payment of £700million for the sales of well over 2,700 square miles of seabed plots around the Scottish cost which is an estimated £27,000 per MW.

However, this figure is dwarfed by the staggering £508,000 per MW which was gained from the USA’s biggest offshore wind auction which only covered an area nearly a quarter of the size of the ScotWind projects.

Although the New York Bight lease sale is only expected to generate between 5.6 and 7GW, enough to power two million homes, it was able to secure £3.56billion, nearly 19 times more per MW than was reaped by ScotWind.

ScotWind’s auction was capped to a maximum price ceiling of £100,000, however they could have earned a staggering £14billion if they had matched the prices in the US. 

Meanwhile, in England, £880million had been raised in option fees for 8GW of offshore wind farms which is less than one-third of the six of ScotWind. Round four of Offshore Wind Leasing generated £110,000 per MW – four times more than managed in Scotland.

These figures were slammed by Craig Dalzell, head of policy and research at Common Weal, who called it a “financial disaster” that must be probed properly.

He told the Herald: “The Scottish Government must investigate why these failures happened, do everything they can to mitigate them and ensure that future rounds of Scottish energy licensing are developed in a way that maximises the benefits for Scotland, including by maximising the direct public ownership of these resources.

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“In the year since its announcement, at least three more offshore wind auctions have concluded, two in the USA and one in England. All three have raised many times more money for their respective governments than ScotWind did.”

Their analysis found that as much as 71 percent of the manufacturing spending on ScotWind will end up outside Scotland while nearly one-third of development investment and 29 percent of operations will be based abroad.

A Scottish Government spokesman said: “As the world’s largest floating offshore wind leasing round, ScotWind puts us at the forefront of the global development of offshore wind and represents a massive step forward in our net-zero transformation. It is a once-in-a-generation opportunity to deliver enormous environmental and economic benefits for all the people of Scotland.

“In addition to delivering more than £700m in revenues to the public purse for these initial awards alone, the ScotWind projects will start paying rent once operational and will deliver billions of pounds of investment across the Scottish supply chain, helping to create thousands of good green jobs and transform our local and national economies.”

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