Offshore Wind (Leasing Process)

– in the Scottish Parliament on 8th June 2022.

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Photo of Colin Smyth Colin Smyth Labour

2. To ask the Scottish Government for what reason a maximum bidding price has been applied to commercial-scale ScotWind projects, but not to 100MW innovation projects looking to progress through the forthcoming innovation and targeted oil and gas leasing round. (S6O-01191)

Photo of Michael Matheson Michael Matheson Scottish National Party

Unlike ScotWind, innovation projects are likely to vary considerably in their design requirements, including sea-bed location. That presents significant challenges in setting an appropriate price cap. Therefore, Crown Estate Scotland has used an approach that allows the market to establish a fair price.

The ScotWind leasing round for large-scale commercial projects used a price cap to enable delivery of competitive projects that could maximise supply chain opportunities for Scotland, particularly in the deployment of emerging floating wind technologies.

Photo of Colin Smyth Colin Smyth Labour

I am not sure that the cabinet secretary actually explained why that cap is not in place elsewhere. Does he not recognise that having one rule for the ScotWind round and a different one for innovation projects means that companies that are focused on using innovative technology and largely Scottish supply chains were at a disadvantage compared with the big companies that have the deepest pockets and which are leasing Scotland’s sea beds on the cheap and will, inevitably, be using existing technology and largely global supply chains? That is bad news for Scottish jobs and for innovation.

Photo of Michael Matheson Michael Matheson Scottish National Party

I am not sure whether Colin Smyth has entirely recognised the purpose of the innovation and targeted oil and gas—INTOG—process. The INTOG scheme is specifically designed to support innovation projects for decarbonisation of oil and gas installations. Those projects do not use the same spatial parameters that we have for the ScotWind programme. INTOG is a very different type of programme that is targeted at decarbonisation of oil and gas installations and at helping to support innovation in achieving that.

In addition, many of the INTOG programmes will not connect to the grid, but will serve directly only installations that they are decarbonising and other projects, as well.

Alongside that, I note that the leasing round was the first of its type in the world. As I set out, Crown Estate Scotland, in trying to establish a clear commercial narrative and cost around INTOG, has used an approach that it believes

allows the market to determine costs. That approach also ensures that we get the innovation that we want and speeds up decarbonisation of the oil and gas sector.

Photo of Maurice Golden Maurice Golden Conservative

Will the final decision on scoring criteria and weighting for INTOG leases for floating offshore wind projects be taken by Scottish ministers or by Crown Estate Scotland, and when will that decision be made?