ANOTHER GIVEAWAY

This is reproduced from Robin McAlpine’s excellent site robinmcalpine.org. It deserves the widest audience to offset the ridiculous spin of the Scottish Government. Scotland gives away its energy future by Robin McAlpine | 17 Jan 2022 The ScotWind auction has just handed almost total control of Scotland’s energy future to overseas corporations for what looks like a pitifullyContinue reading "ANOTHER GIVEAWAY"

ANOTHER GIVEAWAY

This is reproduced from Robin McAlpine’s excellent site robinmcalpine.org. It deserves the widest audience to offset the ridiculous spin of the Scottish Government.

Here have some of this.

Scotland gives away its energy future

by Robin McAlpine | 17 Jan 2022

The ScotWind auction has just handed almost total control of Scotland’s energy future to overseas corporations for what looks like a pitifully small sum

The results of the auction of Scotland’s wind resources has been announced today. It was estimated that this ‘ScotWind’ auction would generate ‘up to’ £890 million by auctioning 10 GigaWatts of capacity. In the end they sold two and a half times as much (24 GigaWatts) for significantly less (£699 million).

So the first headline is that this auction delivered a price per GigaWatt of Scotland’s energy resources of almost exactly a third of the unit price they predicted.

The second headline is who won the bids. The biggest winner is BP – and Shell also features at number four in the list, so Big Oil is now a permanent resident in Scotland’s waters.

Of the rest the big winners in terms of the control of Scotland’s renewables futures are (in descending order) UK, Italian, Swedish, Belgian, Spanish, Spanish (again), UK, Canadian, Norwegian, Canadian (again) and Spanish (again). None of the successful bids went to companies registered in or owned by Scotland.

(Note that ScottishPower is owned by Iberdrola which is Spanish. SSE has a complicated structure with various subsidiaries but while it is headquartered in Perth, the largest part of its business is a subsidiary of OVO Group which is headquartered in Bristol. None of the controlling interests are Scottish – certainly not entirely so.)

Assessing the kind of value for money Scotland gets out of this is fairly straightforward. Very roughly, a GigaWattHour (i.e. the value of the electricity generated in one hour from this total capacity) is about £70,000. So for the corporations who now own (subject to a second phase of approval) this Scottish asset to recoup their total outlay is roughly two days of wind.

Of course they also need to build the infrastructure and that isn’t cheap. The average price for ten MegaWatt of offshore installed wind power is very variable depending on conditions but is in the order of about £6 million. So the total installation cost of all these developments will be in the order of about £15 billion.

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It isn’t particularly easy to see how a nation could go about getting less value out of its natural resources.

While this may sound like a substantial investment, using the above calculations it would repay itself in as little as 900 hours of generation time. Which is to say that once this is all in place the time it will take the corporations to be in the ‘pure profit’ stage is about 40 days.

Of course wind generation isn’t constant so it won’t be 40 calendar days – but then again offshore wind is much more reliable than onshore wind. In addition there is an annual fee to be paid – but this will generate Scotland about £60 million to £90 million for Scotland.

To put that in perspective, if the entire development was carried out by a Scottish Public Energy Company and based on reported annual profits from currently installed offshore wind in Scotland the income for Scotland would instead be £5.5 billion.

So who is in charge of this process? The auction has been run by Crown Estates Scotland. This is a body which manages assets technically owned by the Monarchy but in practice it is a public corporation which answers solely to the Scottish Government, works closely with them and has their Chair and their Boardappointed directly by the Scottish Government.

This means that to all intents and purposes this is a wholly devolved function and this is the result of Scottish Government decision-making, not UK Government and not ‘The Crown’.

It is yet again worth comparing this situation with the way that Norway developed its oil and gas sector in public ownership capturing the profit for Norwegian citizens. Had the Scottish Government done the same it would have created an almost permanent income stream of over £5 billion for Scottish services – a ten per cent rise in the Scottish Government budget.

These resources are now lost to Scotland, and it remains to be seen if any manufacturing capacity is established in Scotland as a result. There are positive political noises being made about this (yet again), a PR spin which is undermined by the fact that supply chain issue were explicitly excluded from the auction tender and assessment process.

It isn’t particularly easy to see how a nation could go about getting less value out of its natural resources.

MY COMMENT

I have reproduced this article because I am disgusted at Scottish Government attempts to present this auction as some sort of success. Remember, only a few weeks ago Nicola Sturgeon announced she was abandoning plans to launch our own not for profit National Energy Company. Looking at the outcome of this auction she clearly prefers big profits for private companies, especially if they are owned and controlled outside Scotland. The SNP have lost their way and completely forgotten why they were elected. It is truly shameful.

i am, as always

Yours for Scotland

BEAT THE CENSORS

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