Offshore Wind: Public Ownership

Beth Winter Excerpts

Tuesday 12th September 2023 Westminster Hall

[Beth Winter (Cynon Valley) (Lab)]

I congratulate the hon. Gentleman on securing this debate. I will make two points and then I would like to put a couple of questions to the Minister. Today’s debate is very—

[Peter Dowd (in the Chair)]

Order. This is an intervention on the hon. Member for East Lothian (Kenny MacAskill), not on the Minister, and you will have to keep the intervention short as well.

[Beth Winter]

Okay. I will address the questions to the hon. Gentleman.

Hon. Members will agree that this debate is timely, following the confirmation last week that there were no bids for new offshore wind development in the latest auction round, which means that the Government are criminally behind the curve when it comes to reaching 50 GW of offshore wind power generation by 2023. That has resulted in delays for the Erebus wind farm in my country of Wales. First of all, does the hon. Gentleman agree that last week’s announcement demonstrated that—

[Peter Dowd (in the Chair)]

Order. I am sorry—you will have to sit down, please. An intervention is made to ask a question of a Member; it should not be a small speech. It has to be very short, because the debate is only for half an hour. An intervention is not an alternative method of making a speech—it has to be a question.

[Beth Winter]

Okay. In terms of the future of wind energy and renewable energy in my country of Wales, does the hon. Gentleman agree that now is the time that the Crown Estate and its administration is devolved to Wales, as it is in Scotland, so that we can disburse the moneys as we see fit?

[Kenny MacAskill]

I think that where Scotland goes, Wales should follow. It is remiss that Wales does not have control over the money coming from the Crown Estate, and I certainly hope that Wales follows Scotland in that regard, as indeed the UK should in the establishment of a state energy company. The hon. Lady’s point is well made and correct.

I am concentrating on Scottish waters, where the Scottish Government’s ScotWind auction sold offshore wind farms at absurdly low prices, compounding the perversity of failing to deliver a state energy company, yet Scotland’s offshore wind resource has six state companies operating within it.

Along the A1 from Innerwick in Cockenzie, in my East Lothian constituency, energy will land from the Inchcape wind farm, which, again, is in the firth of Forth. Inchcape is owned by Red Rock Power, which is a European subsidiary of SDIC Power from Beijing. SDIC Power Holdings Co. Ltd is a listed company on the Shanghai stock exchange, but it is a state-controlled enterprise, with the Chinese Government holding more than 49% of its shares. The UK Government frown not just on public ownership, but on communism, yet it is fine for a state-owned company from communist China to benefit from Scotland’s offshore resource. You couldn’t make it up!

There are three more. Further north, Aberdeen offshore windfarm, off the Aberdeenshire coast, has 58 turbines turning and is owned by Vattenfall, thus generating wealth for the Swedish people. Vattenfall is 100% owned by the Swedish state. That shows that not just communist countries, but even ones with conservative Governments benefit from state ownership.

Sited further north of Peterhead is Hywind, a development in which Masdar holds a 25% stake, with 75% held by Equinor. Equinor is a Norwegian state energy company that benefits its people through the gas and oil resources in Norwegian waters, but adds to that through expansion into Scotland’s offshore wind. Again, Hywind is a joint enterprise, with two state-owned companies co-operating to exploit Scotland’s natural resource. Masdar, also known as the Abu Dhabi Future Energy Company, is a UAE Government-owned company, which is securing Abu Dhabi’s future, not Scotland’s.

In those fields—some already operating and others being developed—we have the absurdity of foreign state ownership of Scotland’s natural resource, and it is costing us. The organisation Common Wealth, in its paper “Power to the People: The Case for a Publicly Owned Generation Company” noted in 2021 that

“our energy bills combined with Contracts for Difference payments contributed £2.56 billion in payments to offshore wind generators owned by foreign state entities.”

Meanwhile, we are told that ownership does not matter, although it matters to the Governments of Sweden, Norway, France, Ireland, China and the UAE. They seem to see the benefit of not just managing their but our natural resource. Why? Because it underpins energy security, provides affordable energy for households and businesses, supports a just transition from fossil fuel to renewables, and allows for investment in technologies. All that helps hard-pressed households, boosts indigenous business and creates a more vibrant and competitive economy. It need not be outright ownership, welcome though that would be; as Denmark shows, a stake can be taken, allowing the nation and its people to benefit and prosper from their natural bounty.

It is about not just slippage of profits and wealth to foreign shores, but loss of control and influence over our natural resource. The evidence shows that we are losing out in more ways than simply the profit. Scotland is losing the turbine manufacturing. A few turbines are to be built at Nigg, but meanwhile hundreds of commissioned orders are going elsewhere. Yards such as Arnish and BiFab lie empty, even when proximate to the site. Not one turbine for a Forth field will be constructed in Scotland. Assembly is a poor substitute for manufacture, seeing lower profit and requiring less skilled labour. Every firth in Scotland should be manufacturing turbines and expanding to meet growing need, yet other than at Nigg, they lie idle and our folk face unemployment and our land a loss of skills.

Benefits from the supply chain is a mantra from the UK Government, shamefully echoed by their Scottish counterparts, but it is not borne out in practice. In my constituency, where the turbines offshore are visible and the horizon will change irrevocably, no work is being generated. What should benefit current and future generations instead sees folk unable to heat their homes and youngsters struggling to access skilled employment. Local business have not benefited and new businesses in the sector are not being created, either to deal with the offshore work, or to provide onshore opportunities through long duration battery storage or hydrogen production.

Let us look one of the sites owned by foreign state companies to confirm that. Neart na Gaoithe, which is owned by EDF from France and ESB from Ireland, is seeing the work go elsewhere. The turbines are being produced at Siemens in Humberside, albeit assembled in Dundee, with the foundations laid by Saipem from Italy. They are being taken out to the field by Fred. Olsen Renewables, and the cabling is being done by DEME Offshore from Belgium. Where are the contracts for Scottish businesses and the work for local folk?

There should be a Scottish state energy company and it should operate and take a share in all the fields that are being developed. Other nations do it and, as I have shown, are doing it in our waters. Denmark, with both its company and its public stake, is showing what can be done, just as Norway showed what could be achieved with an oil and gas bounty. Scotland has lost out on the former but must not do so with the latter. The bounty from the energy off our shores must benefit our people, not just corporations or even state companies from other lands.

The great Scottish comedian Billy Connolly penned a song, “Sergeant, Where’s Mine?”, describing the plight of a soldier with life-changing wounds reflecting on the prospectus the recruiting sergeant had first given him. Lying in his hospital bed he says:

“Oh Sergeant, is this the adventure you meant

When I put my name down on the line

All that talk of computers and sunshine and skis

Oh, I’m askin’ you, Sergeant, where’s mine”.

Well, all I’m askin’ you Minister, where’s ours? All that talk of the “Saudi Arabia of wind” and the work and the jobs, where are they? And when other nations, whether they are Ireland or France, Denmark, Sweden, Norway or China, have a share of our natural bounty, oh Minister, where’s ours?

I conclude by asking the Minister to confirm that his Government will neither oppose a state energy company nor Scotland seeking to take a share in its natural wealth. The absurdity of an energy-rich Scotland yet fuel-poor Scots must end. We demand a share and a stake in our natural bounty.