Energy in Scotland is something I have discussed pretty regularly since the COP26 extravaganza hit Glasgow in November 2021, and thanks to new contracts worth almost £700 million being awarded to 17 projects for offshore wind farms on Scotland’s coastlines, the topic doesn’t seem to be heading to landfill just yet.
It has been 10 years since renewables firms had the opportunity to bid for a piece of the ‘Crown Estate’ (the public corporation that manages land and property, owned by the Monarch), and with more than 2,700 square miles of water secured, it is estimated that the electric output will be over 24GW combined, once all the schemes are up and running.
To put this into perspective, that is more than double the Scottish Government’s ambitions of 11GW and is enough power for over 18 million homes.
Nicola Sturgeon has said this is a “truly historic” moment for the sector, but I believe this is also an historic moment for Scotland, and a perfect opportunity to further showcase Scotland’s long and well documented relationship with renewable energy (and take advantage of our naturally windy climate).
Critics, however, share the sceptical viewpoint that this could be the First Minister’s ‘secret weapon’ for Indy Ref2.
Perhaps she is hoping that a ‘green’ investment like this will blow more Scots to the side of independence, by demonstrating that she is invested in the future of our nation?
From a business perspective, this could be an exciting boost for Scotland, if handled correctly. The 17 wind power projects from multiple bidders from the offshore leasing auction are expected to secure at least £25 billion in combined supply chain funding.
This ‘windfall’ will help secure more jobs in the industry, providing careers to thousands of workers, which has the potential to be a positive step for Scotland’s economy.
However, where there is positive, there will also be negatives to consider.
One Scottish MP has claimed that the Scottish Government are ‘selling off the family silver on the cheap.’ Kenny MacAskill, Alba Party MP, has called for annual payments into the public purse, instead of a one-off fee which has been proposed by the Scottish Government.
Opposition to the offshore windfarms has also come from fishermen and conservationists alike, with a fishing industry group calling for ‘meaningful engagement’ after the announcement.
The renewables sales have been likened by supporters to the oil and gas boom Scotland saw in the North Sea, and the new windfarms could see Scotland race to the forefront of nascent floating offshore technology and will bring massive economic benefits to our shores.
But Scotland is not the only one who could benefit from this massive investment into the wind farming industry.
Sweden’s Vatenfall, in partnership with another Swedish firm, Fred Olsen Renewables, are the lead applicants in a £20 million project.
Danish Government owned Orsted has also teamed up with Italian company, Falck Renewables, to deliver another £25 million floating installation.
Other investors and businesses from Lisbon, Texas, Madrid, and London are also in the running to start projects.
Colin Smyth, Scottish Labour MSP for the South of Scotland, queried how the government would ensure that the work on these sites would predominantly remain in Scotland to benefit the Scottish people and economy, rather than ‘squandering the opportunity’ and being left with the ‘crumbs’.
He also called for ‘binding commitments for winning bidders to deliver investment and jobs in Scotland’.
Scottish Energy Secretary, Michael Matheson, emphasised how important it would be to ‘maximise the potential benefits from this particular ScotWind leasing round.’
I really think this investment could be good for Scotland across the board, but I agree with Smyth that we need to protect the nation’s interest in this project. I will withhold judgement for now and see where the wind takes us over the coming months.
Hotels forecast a brighter outlook
The woes of hospitality, and in particular hotels, have understandably been well documented over the past two years, with the pandemic decimating the sector through the various lockdowns and people asked not to travel where possible.
It was therefore both surprising and exciting then to learn that Scottish hotel investment reached £185 million last year, despite being faced with a variety of challenges.
Research compiled by the Scottish Hotel team at Savills revealed that the Scottish hotel market has seen a consistent increase in investment, despite the pandemic, with £185m being invested in 2021 – up 166 per cent on 2020 and, more surprisingly, 12 per cent up on 2019 figures.
Domestic buyers accounted for 54 per cent of the 18 deals that took place, while international buyers represented 46 per cent of all hotel transactions within Scotland.
Throughout 2021, Scotland saw a number of well-known hotelier brands commit to investing and opening properties across the country.
Virgin Hotels, currently based exclusively in the US, are due to open properties in Glasgow and Edinburgh respectively this spring, whilst Scottish stalwart Gleneagles will expand on its Perthshire offering, through the introduction of a private members’ club on George Street in Edinburgh, boasting 33 bedrooms.
With international travel slowly finding its feet again, the staycation trend certainly doesn’t appear to be going anywhere soon and with Scotland consistently remaining high up on the list for a visit from those keen to travel and holiday within the UK, the hotel market should continue to reap the benefits.
It’s certainly good news for the industry and shows that although the short-term outlook hasn’t been great, long term those within the sector believe that the future will be a lot brighter for hotels.
It Made Me Laugh
Glaswegians are famed for their love of their home city and now they can celebrate their favourite brands and landmarks, from the comfort of their own home.
An interior design company has launched its very own Glasgow-themed wallpaper, featuring Irn-Bru, Tunnock’s Teacakes and the traffic cone in an ode to the Duke of Wellington, to name but a few.
Lakes and Fells, based south of the border in Cumbria, were so taken by their trips to Scotland’s second city that they created the vibrant wallpaper in an ode to the country’s Dear Green Place.
With a price tag of £125 per roll however, I think it’s more likely to do well with expats and those out with Glasgow’s city limits. Otherwise, residents might as well just stick their head out the window and have a look around.
It Made Me Weep
It was worrying to see that the Federation of Small Businesses (FSB) has issued a warning that more firms could close their doors due to an increasing trend in late payments.
The organisation released its quarterly Scottish Small Business Confidence Index and a third of Scottish business owners say late payments have increased in the last three months of 2021.
The FSB surveyed 1,271 small businesses at the start of December, including 159 respondents in Scotland, finding that 12 per cent of Scottish firms say late payment is now threatening the viability of their business.
With the majority of Scottish small businesses surveyed also saying that costs are rising, with fuel, utilities and other input costs on the increase, it’s a worrying time for many across Scotland’s business communities.
