JOHN Swinney’s order for a major review of a state organ behind a controversial major renewables project should be read as an “admission” of the scheme’s “failure”, a top think tank has said.
The Scottish Government has ordered a root-and-branch review of Crown Estate Scotland, the public body tasked with overseeing the ScotWind auction.
The auction saw major firms get stakes in potentially lucrative green energy projects in the Scottish seas – at prices critics have said were well below what they were worth.
Research by the Common Weal think tank showed that had a price cap of £100,000 not been imposed on bids, the Scottish Government could have raked in tens of billions to boost its spending power.
It comes after Finance Secretary Shona Robison (above) revealed she was planning to raid what was left of the money raised to cover day-to-day spending, such as the Scottish Government’s wage bill, when the cash was supposed to have been invested in big renewable energy projects.
Craig Dalzell, the head of policy and research at the respected Common Weal think tank, said: “I welcome the admission that the Scottish Government needs to review its governance model for Crown Estate Scotland, especially in light of the ongoing failure that was the ScotWind auction and the subsequent loss of the long term wealth fund that could have been secured by it.”
Dalzell has previously authored research which found that had Scotland followed the lead of New York in its renewables auction, the country could have earned £16.4 billion “in a single payment”.
If it had replicated conditions imposed by the UK Government in England, the Scottish Government could have stood to gain up to £28bn over the course of a decade, the research found.
He said that Scotland’s public assets should be “managed for the collective good of the nation” and said the companies which will profit from the ScotWind licences to develop offshore wind farms had bought “exclusive rights to exploit those assets for far less than they would have been willing to pay”.
Dalzell added: “I'll look forward to the progress of the governance review and we stand by to ensure that the review itself is done properly, with full stakeholder involvement, and ultimately leads to Crown Estate Scotland helping the country reach its potential.”
Greens co-leader Patrick Harvie (above) said that the raid on ScotWind funds was “short-sighted and irresponsible”.
He added: “This is meant to be an investment fund for green energy and our shift away from fossil fuels, but the SNP is using it to cover up for cuts to active travel and nature investment while hiking up rail fares.”
The former minister said that a review of Crown Estate Scotland was “welcome” but added that it would "not make up for these climate-wrecking cuts or diminish the devastating impact that they will have on our route to net zero”.
Chris McEleny (below), general secretary of the Alba Party, said that “nothing highlights the urgent necessity for independence more than the absurdity of people across Scotland being unable to afford to heat their homes” while the country sits on “vast” energy supplies.
He added: “This makes the cheap sell-off of ScotWind all the more depressing as this is money that should be giving the Scottish Government an early renewable bounty.
“Instead of the debate in Scotland being about where the axe should fall in cuts we should be debating how to best invest this energy bonus in our public services and in creating a sovereign Scottish wealth fund for future generations to benefit from.”
Crown Estate Scotland said it had requested the review, announced in this week’s list of political priorities outlined by the First Minister, “to ensure we have the optimum structure to continue to create wealth, support communities, and support Scotland’s natural environment”.
The organisation argued it was unfair to compare Scotland’s renewables auction with ones from around the world, saying the country faced unique challenges in terms of “seabed conditions” and “technical considerations”.
A spokesperson said: “The successful completion of the ScotWind leasing round resulted in 20 projects with the capacity to generate almost 30GW of clean energy, with the Scottish Government benefitting from £755m in option fees – which were for 10-year option agreements, not one-off sales – plus the annual multi-million-pound payments, once projects begin operating.
"In addition, the ambition of ScotWind also offers Scotland the opportunity to be a world leader in fixed and floating offshore wind, with initial supply chain commitments indicating an average of £1bn investment in Scotland per gigawatt of capacity built.
“The requirement for each developer to outline, from the start, their supply chain commitments will help ensure a focus from the outset on ensuring supply chain is in place to build Scottish offshore wind farm projects, however, the challenges in delivering on these ambitions – which will evolve as project details become clearer – should not be underestimated.”
“Comparing ScotWind to processes in other countries is not comparing like with like. A range of factors, such as seabed conditions in Scotland and technical considerations, influenced the leasing process which was ultimately designed to deliver optimum long-term value for Scotland.”
The Scottish Government was approached for comment.
