Contracts worth almost £700 million have been awarded to 17 projects for new offshore wind farms along Scotland’s coasts.
Crown Estate Scotland was charged with overseeing the ScotWind Leasing bidding process, which received 74 applications from energy firms.
The final awards, which include contracts with Scottish Power, Shell, SSE and BP, total £699.2 million.
First Minister Nicola Sturgeon said Monday was “possibly one of the most significant days in energy and industrial terms that Scotland has seen for a very, very long time”.
Today, we’ve announced the results of ScotWind, the first Scottish offshore wind leasing round in a decade. This is an early but important step towards building the next generation of offshore wind projects. https://t.co/19GVmZRPdm— Crown Estate Scot (@CrownEstateScot) January 17, 2022
1/3 #ScotWind #NetZero #OffshoreWind pic.twitter.com/4gvY86bBaT
Most of the sites are on the east, north east or northern coast, with just one on the western side of Scotland.
Shell New Energies is the lead applicant on the most expensive development, off the coast of Aberdeen, estimated to cost £86 million in option fees.
While a site in the north east, construction of which will be led by Scottish Power Renewables, has the highest capacity, with 3,000 megawatts expected to be produced.
The developments – a combination of floating, fixed and mixed turbines – are estimated to produce almost 25,000 megawatts of energy.
“I think it’s hard – really hard – to overstate the significance of today’s announcement for our energy, environmental and economic future,” the First Minister told the PA news agency on Monday.
“What’s been announced today – although there’s lots of work to be done to bring it to fruition – really has the potential not just to meet energy needs from renewable sources, but to position us as a major exporter in renewable energy and green hydrogen, but it also brings massive opportunities for the economy.”
While the total impact on the supply chain and on the number of jobs created will not be known until later in the process, the First Minister said there estimates suggest as much as £1 billion could be generated for every gigawatt of power – meaning the final benefits could total £25 billion.
It's possibly one of the most significant days in energy and industrial terms that Scotland has seen for very, very long timeNicola Sturgeon
“So that raises the prospect of thousands, tens of thousands, perhaps, of jobs – good, high-quality green jobs – as we make that transition into net zero,” she added.
“This gives us the ability to make sure that we complete that transition but we do it in a fair and a just way too.
“So it’s possibly one of the most significant days in energy and industrial terms that Scotland has seen for a very, very long time.”
Developers were asked to devise supply chain development statements for each project, which will eventually be published, but the First Minister said she would impress upon the successful companies the importance of economic benefits for Scotland.
She said: “I’ll also be making clear to developers – the Cabinet Secretary for Net Zero and I will talk to successful developers over the course of this week – and make abundantly clear what I see as their obligations to ensure that this is a big economic win for Scotland.
“We’ve already started that work; as part of the ScotWind bidding process, developers had to set out in a supply chain development statement what they were committing to do in terms of supporting the Scottish supply chain.”
£700m will be paid by successful applicants in option fees and passed to the Scottish Government for public spending. Developers have made initial commitments of around £1bn investment in the Scottish supply chain for every 1GW of capacity. 2/3 #ScotWind #NetZero #OffshoreWind pic.twitter.com/U5EcRdYcuw— Crown Estate Scot (@CrownEstateScot) January 17, 2022
Simon Hodge, the chief executive of Crown Estate Scotland, said: “Today’s results are a fantastic vote of confidence in Scotland’s ability to transform our energy sector.
“Just a couple of months after hosting Cop26, we’ve now taken a major step towards powering our future economy with renewable electricity.
“In addition to the environmental benefits, this also represents a major investment in the Scottish economy, with around £700 million being delivered straight into the public finances and billions of pounds’ worth of supply chain commitments.
“The variety and scale of the projects that will progress onto the next stages shows both the remarkable progress of the offshore wind sector, and a clear sign that Scotland is set to be a major hub for the further development of this technology in the years to come.”