Scottish Government ‘squandered’ offshore wind opportunity, energy minister says

Michael Shanks says money raised by leasing off Scotland’s seabed could have been better spent by the Scottish Government.

Michael Shanks said Scotland had missed an opportunity that had ‘enormous potential’ (Andrew Milligan/PA) (PA Archive)

The Scottish Government has “squandered” an offshore wind opportunity presented by ScotWind, the UK energy minister has said.

In an exclusive interview with Holyrood magazine, Michael Shanks said Scotland had missed an opportunity that had “enormous potential”.

In June 2022, the leasing of Scotland’s seabed for offshore wind raised £700 million, following an auction.

It’s a shame really. ScotWind has got enormous potential, and we really want it to succeed as it’s important for our energy objectives. I think it could have probably achieved more money than it got in the first place

Michael Shanks, UK energy minister

Holyrood magazine says the the Scottish Government has now had to use a large proportion of the money to plug gaps in its budget.

In the interview with the magazine, Mr Shanks said using the money in this way was a “missed opportunity”, stating such a sum of cash “can’t be found again”, while adding the auction could have generated more money.

He said: “It’s a shame really. ScotWind has got enormous potential, and we really want it to succeed as it’s important for our energy objectives. I think it could have probably achieved more money than it got in the first place.

“But the second part of this is that the SNP challenged UK governments for generations on Scotland’s oil and what the legacy of that was.

“The legacy was that it was funding day-to-day services for 60 years. The (SNP) are now doing exactly the same within years of gaining that ScotWind inheritance.

“It’s a significant amount of money that can’t be found again to plug day-to-day spending. It’s a missed opportunity.”

Holyrood magazine says 17 projects covering 7,000 square kilometres were successful in the first leasing round, despite similar auctions which took place around the same time elsewhere in the world generating far more cash, including six offshore wind leases off the coast of New York in 2022 – covering approximately 2,000 square kilometres which sold for 4.37 billion dollars (£3.3 billion).

The Crown Estate Scotland, which manages the seabed around Scotland, put a cap on bids of £100,000 per square kilometre.

There is no austerity underway at the moment – we’ve made one significant budget decision around the winter fuel payment which so far has had absolutely no impact on the bottom line of the Scottish Government’s budget

Michael Shanks, UK energy minister

In a statement last month, finance secretary Shona Robison confirmed £460 million was being taken from the ScotWind pot to balance the Scottish budget this year.

Mr Shanks also criticised Scottish ministers for “mismanagement” of the public finances and hit back against the suggestion the UK Government was continuing austerity.

He said: “I think they need to look up a dictionary for what austerity means.

“So far, the Scottish Government has actually received more money out of UK Government decisions.

“They’re very good at talking about where their budget has been cut over the last few years; they’re not very good at recognising where it has increased.

“There is no austerity underway at the moment – we’ve made one significant budget decision around the winter fuel payment which so far has had absolutely no impact on the bottom line of the Scottish Government’s budget.”

He added: “The SNP are flailing around trying to find excuses for the fact they’re having to make incredibly tough decisions largely because of their own mismanagement… For 17 years we’ve been told it’s all Westminster’s fault – the public are absolutely fed up of it.”

A Scottish Government spokesperson said: “While some additional ScotWind funding has been provisionally allocated to address financial pressures, we are doing all we can to minimise use of this funding.

“This is necessary because of the incredibly difficult financial situation facing the Scottish Government, which is why we are calling on the UK Government in its autumn Budget to change their fiscal rules and deliver more funding which will allow us to invest in public services and infrastructure.”