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Scottish Government enacts supply-chain commitment rule

By: Tom Russell 16/01/2020 4C Offshore

General Windfarms

Under a new agreement between the Scottish Government and Crown Estate Scotland, offshore wind developers will have to agree on supply-chain commitments when applying for offshore wind leases. It comes following criticism from local unions and companies in the supply chain that not enough offshore wind contracts were staying in Scotland.

Economy Secretary Derek Mackay said: “Scotland is the ideal location for offshore wind, but recent projects have not delivered the significant economic opportunities we want to see for Scottish businesses.

“The Scottish Government has been calling for the offshore sector to do more by awarding contracts to our indigenous supply chain but recent disappointments suggest that more has to be done.

“I will use every lever at our disposal to ensure that our renewables supply chain benefits from the expansion of offshore wind in our waters, leading to the creation and retention of Scottish jobs.

“The measures agreed with Crown Estate Scotland will help to release more of those economic benefits for the Scottish economy and ensure that the Scottish-based supply chain is considered when tendering for work or making long-term conditions.”

Trade unions have previously spoken out against Scottish offshore wind developers for contracting the fabrication of major components to overseas companies. Such projects include the Moray East offshore wind farm, to be located 22km from the Scottish coast in the Moray Firth. Back in March 2019 Scottish Burntisland Fabrications yard secured a contract to manufacture 150 piles for the project.

Although BiFab secured work on the Scottish project, trade unions Unite and GMB at the time condemned the news, claiming the fact that BiFab did not secure the jacket fabrication is a "scandal". Unions claimed that the Scottish firm lost out to companies in Europe and the UAE.

Today's summit included representatives from the Government, trades unions, developers and companies across the offshore wind supply chain. Under the new agreement between Scottish Government and Crown Estate, developers participating in leasing rounds for potential offshore wind farms will have to agree to supply chain commitments. This aims to increase the number of offshore wind contracts staying in Scotland. The next leasing round for Scottish projects is expected to take place later this year.

Hazel Nolan, GMB Scotland Organiser, commented: “Billions of pounds in manufacturing contracts and tens of thousands of jobs from Scotland’s offshore wind sector were lost to international competitors in 2019.

“Politicians of all parties spent last year preaching to people about ‘green jobs revolutions’ and ‘green new deals’, meanwhile the jobs of the future were sailing to Spain, Indonesia and the UAE.

“Workers and communities in places like Fife and Lewis are sick and tired of hearing about ‘jam tomorrow’, especially when redundancy notices are being handed out in the here and now.

“We need to know when the eight turbine jackets promised to BiFab from the NnG contracts will be delivered and if Scotland is going to get any contracts at all from the Seagreen project, which looks like it will be built in the Far East.

“This morning UK and Scottish Ministers will be sitting round the table with industry majors and our message to both will be blunt: This is a scandal and it has to stop.”

News of the agreement comes as international offshore energy engineering firm Petrofac announced today that it has secured a Preferred Supplier Agreement with SSE Renewables to design, supply and install the High Voltage Alternating Current (HVAC) onshore and offshore substations for the Seagreen wind farm project. The wind farm will be located 27 kilometres off the coast of Angus and, once constructed, will be one Scotland's largest offshore wind projects.

Just yesterday (15 January 2020), developers of the Neart na Gaoithe offshore wind farm revealed plans to hold a series of supply chain events to showcase how more Scottish companies can get involved with the development of the £1.8 billion project. The events are scheduled to be held in Aberdeen, Dundee, East Lothian and Fife in the first week of March 2020.

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Scottish Government enacts supply-chain commitment rule

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