Two new wind farms are being proposed for the hills above St Fillans, my Perthshire village, as renewables’ share of Scotland’s electricity generation soars: wind power’s alone is over 72% even as I write this.
One new farm, SSE’s Glentarken, would have 14 turbines and generate up to 84MW. The second, Glen Lednock, from Low Carbon, would generate around 50MW from some 25 turbines.
But how many local jobs would they create? No idea as no info is available. Yet, creating local jobs and investing in related skills, part of the global drive for onshoring, are a core element of the new green industrial plans being implemented by China, the US and EU. Taken together, this trio is investing trillions of dollars in the green transition. Where stand Scotland and the UK in this new economy?
Here in Scotland the wind power segment – on- and offshore combined – of the renewables sector is growing leaps and bounds, generating 27.5TWh of the 35.3TWh of renewable power produced in 2022, or a new record according to recent Scottish Government figures. The Fraser of Allander Institute at Strathclyde Uni says the renewables sector supported 42,000 jobs that year, up from 27,000 in 2021. But that figure embraces “related” jobs and compares with 120,000 UK jobs in oil and gas – the bulk of them here.
A separate analysis from the Energy Transition Institute at Robert Gordon University warns “that if the rate of investment and activity in renewables in the UK does not increase significantly, at a time when oil and gas activities are in rapid decline, then up to 95,000 potential offshore energy jobs will be at risk.”
In fact, foreign direct investment in green energy is booming, reaching $101bn in 2022, with the lion’s share of the renewables investment of $72bn in Scotland, according to a fDi Markets report cited by the FT. But there’s a big downside, it adds: renewable projects accounted for less than 4000 of the around 80K jobs generated by FDI. And very few of this paltry amount are local to Scotland, partly because manufactured parts are imported.
This bears out previous analysis that, while Scotland has around a quarter of Europe’s wind energy potential, few of the tens of thousands of jobs promised have materialised. This trend has been compounded by the utter failure of the auction for wind contracts for difference late last year. These contracts are the UK Government’s “primary mechanism for supporting low carbon infrastructure,” says the House of Commons Library. (They’re now being tweaked).
Industrial strategy revisited
This mixed picture is confusing and hardly reassuring while it underlines the urgent case for a Scottish industrial strategy worth the name. In the run-up to this year’s general election, both the SNP and Scottish Labour have laid out their stalls. These offer little or no comfort for industrial policy protagonists like me – and lack intellectual and political heft compared with the EU version espoused by industry commissioner Thierry Breton, let alone Joe Biden’s Inflation Reduction Act.
First Minister Humza Yousaf’s version, set out in a new year speech to launch the SNP’s election campaign, is based around the 1970s mantra of “direct government intervention to boost specific sectors”. This would come with three pillars: EU membership, a new ministry for industrial policy and public investment via a “special fund” a la sovereign wealth fund. We can all go along with the third though it is over-dependent on oil money; the first is not a given though highly desirable; and the second begs enormous questions, not least the role of both existing government directorates and of the Scottish National Investment Bank.
“We have so many advantages: massive renewable energy resources, world-leading universities, brilliant industries such as food and drink, advanced manufacturing, tourism and a wonderful creative sector,” Yousaf said, glossing over his government’s squeeze on arts & culture, financial problems at our unis and a highly patchy manufacturing performance. But these are the cornerstones of any Scottish strategy.
In turn, Labour is trying to shed the 1970s taint of industrial policy by stressing via David (Lord) Sainsbury that this is decidedly not about bailing out loss-making companies or adopting a five-ear plan but unlocking “the power and ingenuity of private markets, innovative firms and competition to lay a foundation for long-term growth” and led by growth sectors, not governments.
This would carry more conviction if Keir Starmer and Rachel Reeves not only defended but actively promoted their £28bn green investment plan in the face of poorly argued, deeply retrogressive Tory criticism. And we need to know more about what Gordon Brown has called “a new unified Scottish Development Fund capable of incentivising key areas of exporting strength” which sounds like Yousaf’s wealth fund.
A new Europe
Yousaf is right about one thing at least: this industrial strategy needs an EU pillar. Neither the SNP nor Labour (UK or Scottish) will be able to deliver on their plans to modernise the economy or restore public services, notably education and health, to high levels of attainment outside the single market or indeed the EU. Europe, for all its manifest and manifold problems, is gradually assuming the policies and instruments to compete with China and the US.
“Europe has to reinvent itself,” Fabian Zuleeg, chief executive of the European Policy Centre, told the Royal Society of Edinburgh late last year and there are many, maybe far too many, blueprints available or being drafted to do this in a way that marries sustainability and security. And here are the keys: open strategic autonomy, pooled sovereignty, mutual funding. (I’ll return to these in another post).
The EU is a long way off achieving its ambitious goals. There remains disagreement among its 27 members. But the #NextGenerationEU and Recovery & Resilience Plans showed the way post-pandemic. Whatever happens in June’s European elections there will be more policy instruments such as STEP and to greater scale. If the runaway winner of the Iowa Republican caucus returns to the White House in January 2025 the scale and ambition will only grow. We need to be part of this.
Figures via Scottish Renewables
This first appeared on the author’s Cosmopolitan Villager Substack