Draft Offshore Wind Policy Statement

The Scottish Government has given a commitment to reduce carbon emissions by 75% by 2030 and to be a net-zero society by 2045. It is therefore imperative that actions to achieve this are given sufficient merit on all strategic planning applications. This would involve the exploitation of offshore wind technology being carried out in an environmentally sustainable way to enable Scotland to transition to a low carbon economy before 2045.
Unite believes that planning applications must include environmental and local content clauses on top of the existing Environmental Statement required and the application of significant weighting during the contract procurement process should apply to both of these conditions.

A local content clause would provide guarantees on jobs in development, production, manufacturing, completion etc for the local community where the work will be carried out.

If we consider the example of the awarding of the Neart na Gaoithe (NnG) contract and the decision to transport jackets from as far as Indonesia.

Unite has received calculations from the Marine Program Director of the International Council on Clean Transportation (ICCT) estimating that transporting turbine jackets from Indonesia would release up to 4,500 tonnes CO2 per jacket moved, assuming a round trip (loaded one way, ballasted back) with 2 jackets per ship on a special purpose vessel like the Bokalift.

Based on that figure, it is estimated that shipping 30-32 jackets from Indonesia would be the equivalent of 35 million new cars on the road for a day. 54 jackets (maximum allowed in the most recent consent) would be the equivalent of 62 million new cars on the road for a day.

Unite believes that if an environmental impact assessment was carried out, and a local content clause was in place, the carbon impact of transportation of the capital content for offshore wind associated with this contract would have resulted in a different outcome. The process as described above would have taken account of the carbon costs of transportation and the fact that an indigenous company had the capacity and skills to deliver the contract locally which would have allowed Bifab to be awarded a substantial part of the work required to fulfill this contract.

There should also be a requirement for the Scottish Government to use its powers to ensure developments have a positive socio-economic and environmental benefit including ensuring the Crown Estate Scotland mandate for minimum employment conditions, including adherence to collective bargaining arrangements, in line with the Government’s Fair Work principles are included in any contract awarded.

Most people accept that Scotland has unique potential when it comes to offshore wind opportunities and we must therefore do all we can to ensure Scotland’s workforce and the Scottish economy benefit. A summit held in Edinburgh in January 2020 which was organised by the Scottish Government highlighted this very point. The summit included representatives from the Scottish and UK Government as well as trade unions. Those that attended the summit discussed ways to address the issues facing the offshore wind supply chain and wider concerns over jobs and the sectors future. While acknowledging that there are some challenges, it is also recognised that the companies involved in the summit stand to profit significantly from Scotland’s shores. It is therefore worth highlighting that the demands of the trade unions, that local communities and workers must be given the opportunity to share in the benefits afforded by these projects, was forcefully put on the day and that these employers must take cognisance of that.
It was also reassuring to hear the announcement made at the summit by the Scottish Government that they intend to ensure that local and regional supply chains would benefit from contracts in the renewables sector. This is a long overdue intervention by the Scottish Government and one which Unite has been campaigning for.

This commitment will now mean that developers will have to agree on supply-chain assurances when applying for off-shore wind leases under an agreement between the Scottish Government and Crown Estate Scotland.

Such agreements are common place in other areas of the world where clauses are inserted into contracts which guarantee that a substantial share of the project management, and the execution of drilling and development for example are provided locally. &

A report by the United Nations Conference on Trade and Development: Local Content Requirements and The Green Economy echoes this:

Among the developed countries, Canada (in Ontario and Quebec), The EU (in Spain, Italy, France, Greece and Croatia) and the United States have used local content requirements in some form to stimulate the growth of renewable energy projects.

Unite is concerned however that not enough is being done to support Scottish companies and Scottish jobs in the renewables sector and that tere is a clear pattern of renewables contracts being awarded to companies that are based out with Scotland.

The Scottish renewables sector has proven to be very lucrative for companies and foreign governments with significant levels of subsidy being provided by foreign Governments to companies registered in Spain, France, and the United Arab Emirates and that are presently involved in renewables projects in Scotland. Unfortunately, this state activity and support has not been as forthcoming for Scotland’s economy or its workers. We have American and Dutch-owned companies being awarded work on the NnG French owned contract off the coast of Fife operated by EDF. The vast majority of the construction work on the 54 jackets for NnG are once again likely to go to Asia and then be transported back on barges to the east coast of Scotland.

Unite can see no long term economic or environmental reason for this when the Bifab yards in Fife and Arnish have the capacity, capability and skills to do significant volumes of work on the construction of jackets and piles required by EDF.

Further, Unite remains deeply concerned around the details surrounding the part of the NnG project that could come to Scotland. It is our understanding that no contract has formally been signed-off for around eight jackets and piles to be manufactured at the BiFab yards. There must be clarity on how much work will actually go to BiFab’s Fife yards and how much work, if any, will go to the Arnish yard in the Western Isles.

We have seen a similar situation in Argyll. The site of CS Wind at Machrihanish in Argyll is sitting idle, yet primed to contribute to the so-called green jobs revolution.

Unite has repeatedly raised the seriousness of the situation as the factory awaits a decision on the Hornsea 2 project. The project could see 40 towers being fabricated providing work for around twelve months on site. However once again, Scotland may lose out. The doors to the site are already locked and workers have been made redundant with only a skeleton workforce maintaining the factory.

The NnG contract follows the previous announcements by the Belgian procurement firm GeoSea DEM on the Moray East project to award contracts for 100 turbine jackets to the United Arab Emirates fabricators Lamprell, and Belgian steel constructors Smulders. In Kincardine the fabrication work for five platforms supporting the project was awarded by procurement firm Cobra Wind International to the Spanish state shipbuilders Navantia.

Both the Moray East and Kincardine off-shore windfarm projects have a value of around £2.8 billion.

This is simply an unacceptable situation. Governments around the world are openly involved in funding renewables projects in Scotland. However, Scotland’s own governments at Holyrood and Westminster appears to claim that competition rules stops them from interfering in the market by offering funding options to bid or retain work in Scotland. Unless Scotland plays by the same rules as other countries, we will continue to lose out.

Time is therefore critical. If CS Wind does not win this contract then in all likelihood the factory will have no future as the UK’s only manufacturer of on-shore and off-shore wind towers. Urgent clarity must be brought to the situation at CS Wind and BiFab for the longer these facilities are lying empty, the people with experience and skills will being lost to the sector.

On Jobs

Claims made by the Scottish Government in 2010 that developing a low-carbon economy would create up to 28,000 direct jobs in off-shore wind by 2020 has turned out to be a piped-dream. A Freedom of Information request to Marine Scotland by Unite found that in fact a decade on, there have been fewer than 2,000 direct jobs created in the sector. This is a major failure on the part of the Scottish Government to safeguards jobs for indigenous companies. Instead they were awarding contracts to global companies to carry out work in Scotland’s offshore wind sector without any requirement or guarantees on jobs or contracts for local businesses or workers.

This missed opportunity highlights a lack of creative thinking in terms of the Scottish Government’s energy strategy to use all the policy tools available to them including licencing, planning and consent powers in conjunction with devolved bodies that also have levels of influence in this sector including the Crown Estate and Marine Scotland, to deliver significant economic advantage to Scotland’s economy and wider communities.

The next major test in Scotland’s renewables contract merry-go-round is the Scottish and Southern Energy (SSE) announcement on the contract work for the Seagreen project in the Firth of Forth. All eyes will be on the finer detail of the Scottish and Westminster Governments’ commitments to see whether local firms such as BiFab and CS Wind win any of this extremely lucrative work. Seagreen is situated only 16 miles off the Angus coastline. This is one of the most significant construction projects undertaken in Scotland and will see up to 114 turbines being placed off the regions coast.

Montrose Port will be used for SSE’s operations and maintenance base for the construction of the Wind Farm. Shockingly, supply chain jobs for this project are reported to be already lost to China. The irony should be lost on no one that a company with “Scottish” in its corporate name is rumoured to be awarding work to companies based in China who are supported by the state.

Companies such as SSE have been subsidised to the tune of billions of pounds of public money through the UK government’s Contracts for Difference (CfD) scheme.
This process has set meaningless targets for job creation which is why the system is not fit for purpose and is in need of urgent reform. Clear targets must be set in future auctions. Such reform must work in sync with the Scottish Government harnessing its consent, planning and procurement powers together with government bodies including the Crown Estate and Marine Scotland.

Unless the Scottish and UK Governments undertake immediate action to reform the process associated with the renewables sector, the sector itself will become Scotland’s largest export as thousands of jobs and billions of pounds are lost to foreign firms which should instead have been seized upon for the benefit of Scotland.

Unite believes that there needs to be a conversation on the wider aspect of energy costs to consumers.

It is evident that energy prices hikes over the last few years have been passed on to consumers while at the same time energy companies are being subsidized heavily by both the UK and Scottish Governments using taxpayers money.

The combined operating profits of four large energy companies presently involved in the construction of energy projects in Scotland totalled over £16 billion in 2018.

There must be a wider debate that considers the level of subsidies paid to energy companies while taxpayers pick up the tab in increasing energy costs and yet receive little local advantage in terms of job creation or economic investment when large scale energy projects are being built in their backyard.

The current Regional Skills Investment Plans should, in future, be based on forecast labour needs for the renewables sector with implementation co-ordinated by local authority coalitions, colleges and universities in their areas. In parallel to this, an industrial strategy should promote innovation and business start-up in the right new technologies, and ensure that investment funds are available for expansion in the environmentally sustainable technologies to support the renewables energy sector working towards achievable targets for reductions in carbon emissions that don't impact on quality jobs. There must also be a commitment to skills planning that anticipates industrial transformation, accounting for existing skills in the Scottish workforce but also those required for the future economy with plans to provide retraining or skills development to ensure adequate lead in time. This should be done in cooperation with trade unions.

It is evident that there are pressing skills issues for the sector and that future skills require to be considered now if we are to take up opportunities that the renewables sector require to be delivered. There should be a comprehensive apprenticeship scheme put in place now that will help to plug a medium to longer term skills gap. This should be done in cooperation with Skills Development Scotland, employers and trade unions. The sector is such that some of the skills required in the future will be new skills not yet developed. It is therefore vital that engagement with the industry happens now to discuss present and future requirements and this should be done in conjunction with sector skills councils.

The government must take a strategic approach to Scotland’s energy needs. Contracts must have clauses that support jobs and the communities where the work will be done as well as the wider economy. Proper due diligence must be completed in order to ensure companies investing have no prior history that shows a pattern of mismanagement, asset stripping or other detrimental actions that could affect the future of jobs and communities.

As mentioned previously, agreements that include supply chain commitments are common place in other areas of the world where clauses such as those mentioned below, are inserted into contracts which guarantee that substantial explicit and implicit requirements which allow for shares of thresholds on locally sourced materials, project management, transportation, the execution of drilling and product development for example, are provided locally.

Examples of the types of local content clauses could include:

• Local or regional employment of more than 80% of total project employment
• At least 90% of project management provided locally/regionally
• At least 90% of procurement management provided locally/regionally
• More than half of pre-development and development engineering provided locally/regionally
• At least 90% of engineering and execution of drilling and completions provided locally and regionally.

It is evident that companies in the renewable sector do not feel obligated to self-regulate to ensure jobs are provided to local communities and indigenous supply chains. It is therefore necessary for the Scottish Government to intervene by building in commitments on environmental impact assessment and local content clauses, as recent contracts awarded have highlighted that projects have delivered few economic or employment opportunities for local communities.
Contracts for Difference
In response to a Scottish Parliamentary Question (S5W-27106) from Alex Rowley MSP (Mid Scotland and Fife) on 6 February 2020 regarding what additional powers the Scottish Government requires to retain and increase job numbers and increase Scotland's presence in offshore wind projects Paul Wheelhouse MSP, Minister for Energy, Connectivity and the Islands responded as follows:

“The powers associated with the Contract for Difference (CfD) mechanism, which are an obvious driver of new economic development, remain reserved to the UK Government. Its continued operation, design and requirements on successful developers will continue to have a major influence on offshore wind development and related economic activity. We have stressed to BEIS the need to reform this mechanism in a manner that better reflects total value added for the Scottish and UK supply chains – at present, when awarding contracts, CfD would appear to place no weight on bid quality at the final stage and instead places all weight on the levelised cost of energy. While the latter has had benefit for consumers, in terms of driving efficiency of the technology and the prices paid for electricity, this approach has pushed commercial risk down the supply chain and put enormous pressure on cost, leading to imports from areas with lower labour costs, weaker regulation of employment conditions and less stringent climate standards.

As things stand, UK Ministers are unlikely to have to draw upon funds allocated for use in CfD auctions, because prices submitted are below wholesale market prices. We argue that UK Ministers should use their unused budget and powers over CfD to target stimulation and route to market for technologies such as floating offshore wind, as well as marine energy, island wind and to better support the offshore wind supply chain – something that Scottish ministers would certainly be doing if circumstances were different and these powers devolved.”


In light of the significant involvement in the renewables energy sector within Scotland Unite would wish the Scottish and UK Governments to urgently explore the potential to have CfD devolved to Scotland for the principal reasons outlined by Paul Wheelhouse. In the absence of this then the next round of renewables auctioning as part of the CfD process must look beyond the lowest unit cost of energy. There must be inserted local and regional content clauses similar to those highlighted above to ensure that wider factors are taken into cognisance to ensure that Scotland’s local and regional supply chains benefit directly from the billions of pounds worth of contracts pending and in the future.