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What does the £700million off-shore wind auction mean for Scotland? Ten questions answered

Written by News Team

The Scottish government has awarded 25 gigawatts of offshore wind project development rights, more than double the UK’s existing offshore wind capacity, in one of the biggest auctions of its kind in the world. Here we answer some questions about what this means for Scotland

1 When will we see the results?

It will take a decade or so to see the results in terms of power. The first off-shore turbines are not expected to be active until about 2030. The successful bidders still have to go through more planning processes and win subsidy contracts from the UK Government. 

2 Will the power be used to produce hydrogen?

The off-shore wind power can be used to produce electricity. It may also be used to produce hydrogen gas which is clean-burning and doesn’t produce CO2. There may be other applications for this gas – it could be liquefied and shipped overseas. Work has begun on hydrogen-fuelled cargo ships – there could potentially be a refueling stop for ships on Shetland or Orkney. That could help to reduce C02 from shipping – currently about 3% of emissions but predicted to rise to 17% by 2050 without change. Hydrogen could help fuel the green economy. 

3 Will it make electricity cheaper for Scottish consumers?

Not in the short term. Scotland is not independent yet and so is part of a UK-wide energy market. The status quo is unfair to Scottish consumers because many in the north of the country don’t have access to gas, which is much cheaper than electricity, in part as a result of UK Government policy. In an independent Scotland, the Government could have a national power company as many European countries do. That might be able to source cheaper electricity, from the potentially large amount coming from Scotland’s off-shore wind power.

4 Will the electricity produced all come to Scotland?

If everything goes to plan the electricity produced by the winning bidders could power 17 million homes which is obviously much more than Scotland could use. There will need to be infrastructure investment to ensure that the power can be exported to major population centers south of the border. This will mean that Scotland will become a massive energy exporter adding to its balance of payments.

5 What will this mean in terms of jobs?

The Scottish Government has said that it expects the companies involved to invest 1 billion in the UK’s renewable infrastructure for every gigawatt of power. So the £700 million raised through the auction is only the start.  It is hoped that this will introduce a new era of expansion in the North East. This could prevent the oil and gas companies which have been laying off workers from leaving the area. Instead, they could invest in training local workers and build global wind power hubs. The port of Leith has also been mentioned – the New York Times reported that BP plans to modernize Leith. It is expected to become a manufacturing center for offshore equipment. BP also plans for Aberdeen, now a center for undersea technology for the oil industry, to become an operations and maintenance hub for the company’s wind business. 

6 What are the risks involved?

The Scottish projects will be test sites for floating wind turbines, which are anchored to the seabed rather than attached. Energy correspondent Stanley Reed reported in the New York Times yesterday that floating turbines are still too costly for wide commercial deployment. Shell’s two wind farms, which amount to about 20 percent of the capacity awarded, would need to be on floating structures, which are still in the experimental stage. As with any new technology, there will likely be problems and it won’t all work the first time. This will require a long-term commitment by the successful bidders. Working offshore in deep water will be dangerous and require high levels of training. There may also be implications for fishing and nature. 

7 What does this mean for fishing?

How close fishing vessels can go to fixed or floating offshore wind turbines will need to be negotiated. The risks could be damaged undersea cables or other infrastructure with fishing equipment. There will have to be ongoing discussions about what the exclusion zones need to be and how fishing can continue in these areas. The EU has produced reports on this. 

8 Will seabirds fly into the turbines?

Research indicates that seabirds avoid wind turbines to a much greater extent than anyone predicted. A continuous 24 hour-a-day video monitoring programme at Vattenfall’s Thanet offshore wind farm, one of the largest in UK waters, over two years found only six collisions. Nevertheless, the RSPB issued a warning over the wind farms, saying that they could accelerate some species decline and even extinction. So evidence and opinion varies on this issue.

9 Should the Scottish Government have undertaken this work itself rather than auction off the sites?

Kenny MacAskill and others have criticised the Scottish Government for “selling off the family silver cheap”, calling for a public stake in every field. The implication appears to be that the Scottish Government should have created a national off-shore wind company. That would be problematic for a number of reasons – one the Scottish Government doesn’t have the ability to borrow the huge sums that would be required for investment (£15-20bn). Secondly, it doesn’t have any expertise in this experimental technology,  which would take many years to develop, and thirdly it would be very difficult for a Government agency to persist when, inevitably, things go wrong.

And finally, speed of development is a huge issue as we are in a race to stop climate change.  So although there are other options that would be available to an independent Scotland, they are not available now, in the timescales we require.  The projects will boost Scotland’s economy, help to create the foundations for a renewables energy industrial cluster and facilitate future developments. In an independent Scotland, there will be the potential for more public sector ownership through a publicly-owned energy company and/or investment fund.

10 Should this be an opportunity to create something like Norway’s Sovereign Wealth Fund? 

If Scotland were independent, the money generated over the next 50 years from taxing off-shore wind companies’ profits and so on would all come to the Scottish exchequer. That could then be used to expand the Net Zero fund the Scottish Government has set up to invest in a just transition. As it stands, the Scottish Government can only spend the limited budget provided to it by the UK Government which spends much of Scotland’s revenues having decided how much Scotland “owes” for joint expenditure thus limiting Scotland’s ambitions on renewable energy investment.  It is therefore only the nuclear-power-fixated UK Government that currently possesses the ability to create a public energy company. Until Scotland gains the full fiscal and monetary powers as an independent nation, it won’t be able to do anything of the scale of what Norway has achieved. 


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News Team

Articles by News Team may be written by various members of the Business for Scotland team.


  • I’m well confused on this…… firstly … I understood that Scottish ‘Seabeds’ are owned by ‘The Monarchy’ ….through ‘Crown Estates’ ….. secondly ….I hear on BBC that from that ‘sale’ Scotland receives 750 mill …which is ‘peanuts’ …… who exactly is orchestratiing this ‘sale’? Yes, I appreciate that a part of proposed ‘deal’ has to be jobs for Workers in Scotland …in many areas… skilled and supply…. but …from what I hear …we being ripped off once again ….. please, correct me if I am getting this wrong

  • Scotland must move to PV solar on E, W, S facing roofs/rooves – even N facing as I saw in Dornoch.
    My mid-terrace, 3 storey townhouse in Halesowen, West Midlands generated 38,000 kWh in the first 8 years, with 32,000 exported for others to use. Every building can be, must be a mini power station with electricity stored in batteries for later use!

  • But can we Tax the offshore wind companies if they are
    registered in a tax haven ?
    And what about the article produced that said the company’s
    site payments would be paid back to them in just 40 days of wind ?
    I’ve read that in England their off shore sites are leased
    to companies !

    • The volatility of wind flow is built into the production estimates. The reason Scotland has so much scope for offshore wind production is that we consistently experience windier conditions than most other places.

  • Sorry, but I think this is all a bit too trusting.
    1. The issue of price is not just about being in the UK energy market – though I agree with everything that you say about it. Let’s be clear that the electricity produced will belong to the companies who own the technology – ie Shell etc. They will look to realise the best price they can wherever that is. So if its in Europe then it will be exported. Energy, including electricity is an international commodity and Scotland will pay the international price. If we were independent, and if we owned or had a substantial share in these developments then there might be some scope for the electricity produced to be diverted to Scotland and sold at a lower cost (or to negotiate beneficial contracts for supply), but what has been done follows the paradigm of the oil – get the money from the producers and let them get on with it. It seems we havent learned that much from Norway – hopefully when we are independent we will?!
    2. You write “It is hoped that this will introduce a new era of expansion in the North East….Instead, they could invest in training local workers and build global wind power hubs”. Yeah? Dont you think it more likely that the technology will be produced elsewhere – either where the expertise exists already (Denmark?) or where it can be done more cheaply (China? And yes they do move these things all the way to the other side of the world). It’s all very nice and cuddly for the SG to tell us what they expect, but how realistic is it? Should there not have been guarantees written into this for Scotland? Of course the response is that this will put off producers – well the Norwegians did this with oil and have profited mightily from it.
    Sorry to be so negative, but I do think we should have learned after the last time.

  • The largest wind turbines commercially available are 10 megawatt giants with an optimal spacing of at least 70 acres per unit. 25 gigawatts of power = 2500 units = 273.4 square miles of seabed required for anchorage. That is veritable forest of crap blotting the land or sea scape which will bring an end to fishing and navigation in the areas affected. If you want to go down the Chinese route of their proposed 16 megawatt giants at 866 feet tall = 1562 units x 120 acres = 292.9 square miles of sea bed anchorage and an even greater blot on the seascape with unknown damage to the ecology of marine life and the seabed.
    3 nuclear power plants of a similar size to Kashiwazaki-Kariwa with a gross installed capacity of 8,212MW. would do the same job

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