In the final part of a series of blogs looking at renewables in Scotland, STUC Policy Officer, Francis Stuart, looks at the corporations profiting from Scotland’s wind.

Two weeks ago hundreds of trade unionists, community members and environmental activists marched through the streets of Kirkcaldy. They congregated in the old Kirk where they were joined by politicians from the SNP, the Greens, and Labour, including Jeremy Corbyn.

Fife has a proud industrial history and has proven itself an energy leader for generations. Once a heartland of coal in years gone by, its renewables yards could help power Scotland again if given the chance.All had a common message: we want jobs and investment in Fife, including in the Bifab renewables fabrication yards.

Yet sadly Bifab which, as recently as 2017, had more than a thousand workers on its book now has a couple of hundred.

This isn’t due to a lack of work in renewables. The offshore wind industry is booming. It is also increasingly profitable. Only last week it was revealed that the next wave of offshore wind projects will no longer receive subsidies, because costs have tumbled by a third to about £40 per megawatt hour, which is less than the price of electricity in the wholesale energy market.

Rather, the reason that Bifab is operating below capacity is due to decisions by multinational companies to maximise profits. EDF, the French-owned electric utility company, is building its new £2 billion Neart na Gaoithe (NNG) offshore wind farm less than 15 km off the coast of Fife. Yet it plans to ship turbine jackets from Indonesia rather than building them in Fife yards. This is despite the project being subsidised to ensure the developer makes £114 per megawatt hour. Anyone doing the maths between £40 per megawatt hour and £114 per megawatt hour can see that EDF are about to make an absolute fortune.

While it might be EDF in the firing line right now, they aren’t the first and they won’t be the last. SSE have just won a 15-year contract for their Seagreen project consisting of 120 turbines in the Firth of Forth.

There are also plans for further large developments such as Inchcape Offshore Wind Farm off the coast of Angus developed by the Chinese-owned company Red Rock, as well as Moray West Offshore Wind Farm developed by the Portuguese and French firms EDPR and ENGIE. Although both were unsuccessful in the latest round of contract auctions, they are likely to try again in the next round.

Concerns have already been raised about working conditions on many of these projects. The RMT have raised concerns that survey work undertaken for Inch Cape has been carried out by Horizon Geosciences, a United Arab Emirates Agency, using seafarers from outside the EU paid less than £4.20 an hour.

Renewables is now big business and it should be treated as such. As Unite the Union’s Scottish Secretary, Pat Rafferty, said at a community meeting in Buckhaven ‘we have a clear message for all these developers: we want the work and if we don’t get it, we are coming for you’.

Last week saw the inspiring sight of thousands of climate strikers take to the streets to demand real action to address the climate emergency. This week the Scottish Parliament passed new Climate Change legislation and the UK Labour party declared its support for a Green New Deal to decarbonise the economy by 2030.

In many ways, the campaign to bring renewables jobs to the Fife yards is a litmus test in whether we can deliver on these ambitious targets.

Renewable technologies aren’t the future. They are the here and now. Whether they are deployed to the extent needed depends on community support. When energy corporations like EDF chase profits and move manufacturing to Indonesia, not only do they offshore jobs, carbon emissions and tax revenues, but they create a backlash to climate action.

Trade unions, community members and environmentalists like Friends of the Earth Scotland have demonstrated their desire to bring jobs and economic benefit to local communities while playing their part in tackling the climate emergency.

Corporations and politicians who purport the same and talk of a Just Transition for working class communities like those in Fife, must now do likewise. Anything else is a dereliction of duty.

“Wind” by De Gringo is licensed under CC BY-ND 2.0

As part of a series of blogs aimed at getting to grips with the energy market and the failure to ensure workers and communities in Scotland benefit, STUC Policy Officer, Francis Stuart, looks at the role of the Scottish Government.

In the early 1980s, a company called James Howden & Co Ltd in Glasgow was at the forefront of wind turbine manufacturing, supplying the UK’s first wind turbine in the utility industry. However, the company lost Government support and stopped producing turbines in 1989. The main beneficiaries were the Danish manufacturing industry, who were also early adopters of turbine technology and heavily backed by Government.

Unfortunately for Scotland, things haven’t improved much since. The most recent ONS data indicates that the Scottish low-carbon and renewable energy economy imports significantly more in goods and services than it exports; to the tune of -£229 million.

Most recently, we’ve seen the ludicrous situation where work for EDF’s new £2 billion NNG windfarm off the coast of Fife is set to go to Indonesia and be shipped across the world, rather than go to the Bifab yards in Methil 15 kilometres away.

So who is responsible for this?

Last week we looked at the crucial role that UK energy policy plays. Yet while primary responsibility lies at UK Government level, there are also things that the Scottish Government can do.

Currently the Scottish Government has powers over planning consent for certain energy infrastructure application, including projects over 50MW. While a number of consents contain requirements about local construction and socio-economic benefit, in practice these requirements are often not upheld, with the Scottish Government claiming the requirements are not legally enforceable in Scotland. One way around this, given that environmental policy is devolved, may be to include requirements relating to the carbon footprint of construction.

Similarly powers over the ‘Crown Estate’ – the seabed around Scotland’s coast – have recently been devolved. This means that whenever the Scottish Government provide a lease for Crown Estate land, they now have the opportunity to apply supply chain conditions to that lease – ensuring projects provide local socio-economic benefit.

It is only right that as developers cash in on Scotland’s land and resources, workers and local communities should get something back.

We should also consider the role that direct Government intervention and enterprise support could have in yards such as those in Methil, enabling companies such as Bifab to better compete with European competitors.

However, direct and conditional support is unlikely to be enough. Over the last 30 to 40 years, a lack of concern about ownership has led to a plethora of overseas financial interests within the Scottish economy. This has led to the offshoring of jobs and tax revenues, limited transparency, and lessened the accountability that workers, communities and Government hold over multinational companies.

Back in the 1980s, public institutions like the National Engineering Laboratory (the NEL) in East Kilbride supported the development and utilisation of new technologies. While much of that public knowledge has been lost (the NEL was sold off to a German firm in the 1990s) there are still things the Scottish Government can do.

Firstly, the Scottish Government’s proposals for a publicly-owned energy company, could play an important role in developing renewable energy, restoring post-industrial ports, and capturing value from the low-carbon economy. However existing plans for a white-label retail supplier (essentially buying energy from existing producers and then selling it to consumers) are far too timid and will do little to change the generation mix or the nature of ownership within the low carbon economy.

Secondly, the Scottish Government’s plans for a Scottish National Investment Bank could also provide an opportunity to leverage in the huge levels of public investment that will be needed to address climate change. However, existing proposals look like they’d prevent the Bank operating like similar banks in Germany who have full borrowing powers as well as the ability to lend to the public sector.

Thirdly, there has also been talk of a National Infrastructure Company. This is much needed in-light of the collapse of Carillion; issues at Ferguson Marine Energy and the closure of the Caley railworks. However, to ensure workers, taxpayers and public service users are not simply asked to pick up the pieces of private sector failings, this needs to be based on an integrated 10 to 15 year infrastructure strategy which recognises the importance of collective ownership, not simply firefighting at times of crisis.

More radical proposals in these policy areas, coupled with the Scottish Government’s stake in Bifab and nationalisation of Fergusons, could form the basis of a much more interventionist strategy. While the Scottish Government’s Programme for Government framed many of its announcement around a ‘Green New Deal,’ in reality there was nothing on the role of publicly owned energy, transport and infrastructure companies. These are core components of what might make up a real Green New Deal in a Scottish context – one that is capable of decarbonising the economy while restoring good quality jobs to post-industrial communities.

Currently the Bifab yards sit below capacity with hundreds of workers having to choose between sitting on the dole or moving away from their families for work. Scottish Government intervention could, instead, enable these workers look out across the Fife coast and recognise steel turbines carved by their very own hands.

On 14 September, Fife Trades Council are organising a march and rally under the banner ‘Fife, Fighting for our Future’  as part of the fight for renewable jobs in Methil and Burntisland.

They are showing that workers and communities in Fife want to play their part in building a low-carbon economy and meeting climate change targets. If Bifab isn’t to go the same way as Howden’s 30 years ago, we need our politicians to support them.

“Teeside Offshore Wind Farm” by howzey is licensed under CC BY-NC-ND 2.0

As part of a series of blogs trying to get to grips with the energy market and considering who is responsible for the failure to ensure workers and communities in Scotland benefit from offshore wind, STUC Policy Officer, Francis Stuart, looks at the role of the UK Government’s energy policy.

On 14 September, Fife Trades Council are organising a march and rally under the banner ‘Fife, Fighting for our Future’ as part of the fight for renewable jobs in Methil and Burntisland.

As well as the loss of jobs at Havelock, the threat of job losses at Rosyth and attacks on pay at Diageo, the march is being organised in response to reports suggesting that the Bifab yards in Methil and Burntisland are only due to win 8 jackets out of the 54 required for the new Neart Na Gaoithe (NNG) offshore wind farm. The rest are set to be made by the Italian firm, Saipem, in Indonesian yards, before being shipped halfway across the world.

Improving knowledge of the way the industry works is key to building workers’ power and control in the sector. So who is responsible for the situation where a yard with the skills and ability to manufacture content for a windfarm 15 miles away, loses out to an Italian firm operating in an Indonesian ‘free-trade zone’ benefitting from a number of tax exemptions?

With some exceptions, such as planning powers which are devolved, energy policy is largely a reserved matter. That means it is the UK Government’s responsibility to determine the framework for how electricity is generated, transmitted, distributed and supplied to households and consumers.

Introduced by the coalition Government, ‘Contracts for Difference’, are the main mechanism for supporting low-carbon electricity generation. The scheme involves the Government auctioning off renewable projects to private developers to produce energy at a ‘strike price’ – a pre-agreed price aimed at reflecting the cost of low-carbon technology which is higher than the market price of electricity. Coupled with a separate ‘capacity market’ aimed at ensuring sufficient capacity in the system, the result is a complicated market-based system where the Government pays to take electricity generation and pays to refuse it. As Trade Unions for Energy Democracy (TUED) state:

“By locking in both volume and price for sales of new low-carbon generation at non-market prices, for fifteen years, these agreements effectively established a long-term, guaranteed, risk free, publicly subsidised income stream for producers.”

What’s more, these subsidies are funded entirely through a levy on consumers’ bills rather than through general taxation, disproportionately impacting on low-income households.

Given this, one might expect some kind of quid-pro-quo for workers and communities who are ultimately paying for the policy. Yet, despite vague targets for ‘lifetime content’ in an offshore wind sector deal, there is no provision within the funding mechanism to ensure content is manufactured locally.

The STUC and the communities of Methil and Leven want to play their part in building a low-carbon economy and meeting climate change targets. However, until UK Government changes its approach to energy policy – to one built on public control and local benefit – the Bifab yards in Fife are likely to continue to operate below capacity while jobs, tax revenue and carbon emissions are offshored halfway round the world.

The energy landscape is complicated. Deliberately so, following Margaret Thatcher’s privatisations in the 1980s. But upskilling our knowledge and then taking action helps builds confidence among workers and communities. The actions taken by workers at Bifab and the rally in Kirkcaldy on 14 September, gives a glimmer of hope that we can create good quality renewable jobs while tackling the climate emergency.

You can read more about some of these issues in STUC’s Broken Promises report. Further blogs will consider the role and responsibility of the Scottish Government and private developers in ensuring workers and communities in Scotland benefit from offshore wind development.