Scottish Government should guarantee renewable energy projects use local parts and labour

All new renewable energy projects in Scotland should have to guarantee a minimum level of locally-made parts and local workers, according to a new report published today from the New Economics Foundation (NEF).

After the most recent round of UK government wind farm subsidy allocation, six Scottish wind farms have been given approval. This report argues that the Scottish Government should make more of its powers to formally approve renewables to guarantee that the projects are doing more to benefit Scottish workers.

While subsidy contracts for wind farms are managed by the UK Government, some aspects are under the Scottish Government’s control. For example, the Scottish Government controls the licensing of the sea bed used for offshore wind. The report argues that the Scottish Government could set a minimum level of local parts and workers in order to issue a license. It should also include considering the carbon emissions associated with importing renewables parts as part of the assessment of local value.

The report highlights that there are no manufacturers of wind turbines in Scotland, despite the country having some of the best offshore wind resources in Europe. This comes after CSWind, who run the only UK facility manufacturing wind towers, announced last week it will cut three-quarters of its workforce. The Scottish Trades Union Congress has claimed that the Scottish renewables sector has ​“an over-reliance on imported goods and services”.

There are currently around 4,500 jobs in low carbon and renewable energy manufacturing in Scotland. But under the government’s Contracts for Different (CfD) process to award wind farm contracts, contracts are awarded to developers who price their renewable energy developments at the lowest possible amount. This makes it difficult for domestic companies, without operating at scale, to compete with overseas firms for business. The report argues that the Scottish Government should ensure that any expansion of renewables in Scotland benefits Scottish firms.

The report highlights that there have been recent high profile cases of contracts for manufacturing components for Scottish wind energy being awarded to companies overseas, which are often state-owned. It therefore recommends the establishment of a new Scottish Energy Development Agency (SEDA) to support Scottish green jobs across the public sector.

The report also recommends that the Scottish Government:

• Expand Scotland’s domestic renewable electricity target from 100% to 200% by 2030, with sub-targets for specific sectors such as tidal and marine energy and provide direct funding to match – for example, supporting a target of 1GW of Scottish tidal energy by 2030 with £1.3 billion in revenue support.
• Give the new Scottish National Investment Bank a coherent ​‘Green New Deal’ mission aligned to the work of the SEDA.

The report outlines one case study of the BiFab engineering firm which has two yards which have been mothballed after contracts to manufacture components for offshore wind farms were awarded to overseas companies. The Moray East windfarm is being built by a multinational consortium, including the 23.6% French state-owned Engie. A contract for a trial floating windfarm south-east of Aberdeen has been awarded to a consortium including the 100% Spanish state-owned Navantia.

David Powell, Head of Environment and Green Transition at the New Economics Foundation, said:

“A Green New Deal means making sure that clean energy delivers good green jobs, particularly for the people and places that need it most. Renewable energy is a huge success story for the UK and Scotland in particular but the Scottish Government could go several miles further in bringing the jobs it creates back home. The UK has spent the last 40 years doing what works best for global capital, as factories have closed and communities have seen the gap between rich and poor grow. A Green New Deal industrial strategy would use the full energy and arsenal of the state to insist that all is being done to make the renewables revolution the bedrock of a new, manufacturing-rich Scottish economy.“

Notes

The report, Re-energising manufacturing, we be available from https://​newe​co​nom​ics​.org/​2019/… at 00.01 Monday 4 November.

The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.

Calculations of how many people the renewables sector could employ by 2035 are from Minio-Paluello, M. (2015), ​‘Jobs in Scotland’s New Economy’, https://greens.scot/sites/defa…

Calculations of existing jobs in the renewables sector are from Office for National Statistics, ​‘Low carbon and renewable energy economy final estimates’, retrieved July 2019 from https://​www​.ons​.gov​.uk/​f​i​le?ur…

Calculations of number of jobs in low carbon and renewables manufacturing in Scotland are from a New Economics Foundation Freedom of Information request: Office for National Statistics, ​‘Low carbon and renewable energy economy final estimates’, retrieved July 2019 from https://​www​.ons​.gov​.uk/​f​i​le?ur…