Exclusive:Scottish ports warn of risk of ‘no new Scottish projects’ in offshore wind auction

A UK Government contract scheme which awards funds to low-carbon electricity generation projects is due to close on Friday.

However, bosses at Scottish ports are worried they will once again miss out, as no Scottish fixed-bottom offshore wind development has received funding from this scheme since 2022.

Known as AR7, the port chiefs want to see more money set aside for fixed-bottom offshore wind developments to ensure a Scottish project is successful in the upcoming funding round.

The chief executives of Aberdeen, Ardersier, Leith, Dundee, Montrose, Peterhead and Fraserburgh ports have written to UK Energy Secretary Ed Miliband warning there will be knock-on impacts for port investment and supply chain jobs if no Scottish contracts are secured in AR7.

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Any offshore wind development would benefit Scottish ports economically as all assembly, manufacturing and maintenance would need to go through them.

Their letter said: “If realised, the consequences would be rapid for market confidence and severe ramifications for ports, workers and the wider supply chain.

"Scottish ports have already experienced a significant contraction in traditional energy markets.

“The major announcements at Grangemouth and Mossmorran are symptoms of structural change, alongside the activity through Port of Aberdeen, for example, that has seen a 25 per cent fall in oil and gas-related activity over the past year, with renewables activity not yet replacing this work.

“At the same time, ports across Scotland have made major capital investments in quayside space, dredging, fabrication and vessel capacity specifically to support a pipeline of Scottish offshore wind projects that have yet to materialise.

“These investments only deliver value if supported by a continuous pipeline of Scottish projects - a “stop-start” deployment risks stranding critical assets and skills.”

AR7 includes £900 million for offshore wind, and a further £180m for floating offshore wind - however, the technology for floating offshore wind is not as developed as the technology for fixed-bottom offshore wind, which sees turbines drilled directly into the seabed.

The harbour bosses also say the £900m figure is a 40 per cent real-terms cut since the last funding round.

The letter to Mr Miliband added: “AR7 now risks becoming a third successive round without a Scottish fixed-bottom award at precisely the moment our sector is absorbing reduced oil and gas activity and rising operating costs.

“Should that occur, the impact would be felt quickly and significantly, with the green jobs transition put at risk.

“Port utilisation would come under further pressure, fabrication yards and heavy-lift sites would face delayed or scaled-back investment and fewer new jobs, [and] Scotland would risk losing grounds in the UK offshore wind build-out.”

The port chiefs say this will “send a negative signal” to global investors and counter policies which are currently being pursued through green freeports.

The letter continued: “Combined with high transmission cost burdens faced by Scottish projects, this creates a structural barrier that cannot be overcome by competitiveness alone.

“In effect, Scottish projects risk being priced out before the auction even begins.”

The port chiefs are now pleading with the UK Government to step in and increase the AR7 budget for fixed-bottom offshore wind, saying a “modest uplift” would ensure at least one Scottish project receives the funding it needs.

They say this would “help safeguard recent investments in infrastructure, protect jobs, and preserve the UK’s ambition for a robust, geographically balanced offshore wind supply chain and progress towards clean power 2030.”

This is something Scottish Renewables has previously raised concerns about.

Claire Mack, chief executive for Scottish Renewables, said: “This year’s auction is a pivotal moment to inject fresh momentum into Scotland’s offshore wind sector and build on the strategic investments made in our supply chain to date.

“An auction that fails to deliver for Scotland will seriously undermine our ability to maintain and secure the growth that is essential for energy security.

“A record amount of capacity is eligible for AR7 and this fierce competition will ensure new capacity is secured at the best possible value to consumers, despite increasing global cost pressures.

“The budget announced today would significantly restrict that value from reaching consumers and communities. We urge careful consideration to ensure the final budget best delivers on our long-term national interests.”

Ms Mack added: “Given no contracts have been awarded to new fixed-bottom projects in Scotland since 2022, the industry needs to be reassured that the UK Government remains committed to continued deployment of Scottish fixed and floating offshore wind projects.

“This will be critical for driving economic prosperity across all corners of the country, including the north-east of Scotland.”

A spokesman for the Scottish Government said: “We fully support the view that Scotland needs its own manufacturing base for floating offshore wind and are working with a wide range of both international and domestic supply chain companies to grow the supply chain and realise the economic opportunity for Scotland of offshore wind.”

A spokeswoman for the UK Department of Energy Security and Net Zero added: “We’ve set out a plan to build a prosperous and sustainable future for the North Sea - with record investment to grow clean energy industries, while supporting the management of existing oil and gas fields for their lifespan and helping North Sea workers make the transition.

“Last year’s auction round secured funding for Green Volt in Scotland - one of the largest floating offshore wind projects. We want to build on that success with a new competitive auction process that gives us the power to increase the offshore wind budget to support projects that deliver value for money.”