The Scottish Government

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12. Supply chain and skills

Objective: to maximise opportunities from this renewed commitment at Scottish, UK and EU level to renewable energy in order to contribute to the purpose of increasing sustainable economic growth to be shared by all Scotland's people.

12.1. The investment required to achieving the targets for renewable energy set at Scottish, UK and EU level will create significant opportunities to:

• generate greater and more widely shared employment;
• create more highly skilled and better paid jobs;
• foster a self-sustaining and ambitious climate of entrepreneurial advance;
• encourage economic activity and investment across Scotland, thereby sharing the benefits of growth;
• bring a culture of confidence and personal empowerment to Scotland; and
• secure a high quality environment today and a sustainable legacy for future generations, which will act to strengthen Scotland's positioning as a great country to do business.

12.2. In the light of the Government's objectives on promoting sustainable economic growth it is essential that Scottish based business and industry takes full advantage of these opportunities at home and abroad. The certainty about investment that is now to be guaranteed by the EU targets will provide the confidence that investors need to ensure that economic benefit can be maximised. The renewable energy industry already supports a significant supply chain in Scotland but much more could be done to capitalise upon opportunities for local sourcing and the export of Scottish expertise. Opportunities exist both in terms of mature technologies such as onshore wind where more equipment (such as towers and cabling) could be manufactured in Scotland and services provided at home and abroad, while in emerging technologies such as marine and offshore wind. Scottish Development International is actively seeking to attract developers and manufacturers to Scotland who can benefit from facilities such as those of, for example, Fife and Nigg, in taking forward their projects.

12.3. Scotland is well placed to transform its technological advances into workable business opportunities in the near future. Key elements of the approach to achieve these goals will include:

• Scottish Enterprise, HIE and SDI support schemes;
• opportunities in manufacture and services with new renewed commitment to deploy (estimate of 1 GW per year in next two years and 0.5 GW per year beyond that);
• challenge to industry to work together to promote local sourcing in light of commitment to deploy;
• making best use of skills opportunities.

12.4. The Enterprise Bodies are planning to develop, in partnership with industry and other bodies, an action plan with milestones to support the development of the renewable industry supply chain in Scotland. Among the different actions which could be taken and will be considered in the action plan are:

• making a real and concerted effort to capitalise on the world lead Scotland has in research and development in sustainable energy set out in the previous section to bring about a more effective commercialisation chain, thus delivering real and lasting benefits for the Scottish economy.
• having a recognised and respected relevant industry body that can lead and encourage collaboration within the Sector so companies can share and pull resources. This body could also be responsible for identifying bottlenecks and have the power to try and resolve these;
• the industry body being able to identify certain companies in Scotland who are best placed to take advantage of the renewable energy supply chain opportunities and see where they can best work together so their skills and expertise complement each other. Such companies and collaboration would greatly increase their chances of competing, winning and fulfilling renewable energy contracts;
• market intelligence on the Renewable Energy Sector. That is key information about the Renewable industry that will help inform investors, developers and manufacturers about the opportunities, for instance forecast levels of activity (size and scale) their value and what would be required;
• Scotland developing the manufacturing capability and capacity to carry out and fulfil such renewable energy demand and orders;
• Developing Scottish capacity to capitalise on the economic and employment opportunities that will be offered by the manufacture and installation of the range of renewable heat and microgeneration technologies, including ground source heat pumps and solar panels as well as biomass systems.
• having an Accreditation system for accrediting key industry parts that will be needed in the renewable energy sector. Most of the renewable parts are manufactured abroad but there are up to 3 years delays for instance in offshore turbine supply. The automotive, defence and aerospace industries have experience of supplying parts to the aviation industry where quality control and tolerances are crucial. Renewable energy opportunities could provide such businesses in Scotland with the opportunity to diversify although it may require a leap of faith from developers and investors in buying such parts;
• access to and available materials to fulfil renewable energy orders. This will be an increasing issue as Scotland competes with other industries, Europe and the Rest of the World for the supply of such materials;
• an available and skilled workforce who are able to work within the sector. This may mean that Scotland actively targets overseas people to fill the required skills gaps.
• Linked to this, the Scottish Government is supporting the Sector Skills Councils to underwrite major new research on the future skills needs of the renewables sector, including renewable heat, in order to inform policy

12.5. It will also be important to factor into the approach work done in a UK and European context which is designed to promote the economic viability of renewable energy. For example, the European Wind Energy Technology Platform ²⁸ has set the following objectives of offshore wind research as being to deliver:

• more than 13% of Europe's electricity demand from offshore wind;
• offshore generating costs that are competitive with other sources of generation;
• technology for sites of water depth up to 50m at any distance from shore which is commercially mature;
• technology for sites in deeper water, proven through full-scale demonstration.

The key objective of this work is to deliver the technical improvements required to develop the technology, improve performance and reduce costs.

The DOWNVInD programme (distant offshore wind no visual intrusion in deepwater) is one of the largest research and technology development programmes in Europe. It was developed by a consortium led by Talisman Energy and Scottish and Southern Energy ( SSE), two of Scotland's largest companies. It involved a consortium of more than 18 companies from six European nations. It was funded by Talisman and SSE with grant support of £10 million from the European Commission Sixth Framework RTD programme and the Scottish and UK government.

The project had two key elements a demonstration programme which saw two turbines installed adjacent to the Beatrice oil platform and a research programme. The demonstrator programme saw the first installation of two turbines in international water 25 km from shore. It achieved a number of firsts:

• First 5 MW turbine deployed offshore
• First application of jacket substructure in offshore wind
• First onshore assembly of tower turbine and blades
• First offshore installation from a floating vessel
• Successful development of a ladderless safe access system

The pan-European research programme consisted of four separate elements: environment, electrical systems, operations and maintenance and structures.

12.6. A further area to be factored in is the work being done under the auspices of the Scottish European Green Energy Centre to promote collaboration amongst North Sea partners to promote diversification from oil and gas into green energy ( see section 10), In particular in the short to medium term there is a real opportunity to develop economic opportunities for Scottish companies in partnership with companies from around the North Sea region in the current major investment plans for offshore wind energy in the Southern North Sea, given Scottish expertise, including in the service sector, in designing, building, placing and maintaining fixed structures in difficult maritime conditions.

Question for debate

• How can Scottish industry seize the opportunities this renewed commitment to renewable energy at Scottish, UK and European level brings to develop a large and prosperous renewable energy sector making a significant contribution to sustainable economic growth in Scotland and providing a wide range of skilled jobs?
• What can be done in the short term to promote more effective collaboration in local sourcing and procurement?

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