ETZ warns north-east supply chain faces erosion due to floating wind policy delays

The industrial supply chain in the north-east of Scotland is at significant risk if current policy directions do not shift to support the offshore wind sector, according to Maggie McGinlay, chief executive of ETZ Ltd. McGinlay has cautioned that the region stands to lose critical skills, knowledge and expertise if the necessary government commitment is not secured. She emphasised that the primary concern for her organisation is the preservation of the employment base, where hundreds of companies currently employ large workforces. As the oil and gas industry enters a period of decline, the ETZ chief executive stated that it is imperative to ensure strong market opportunities for these firms so that the capabilities built up over the last four to five decades are not lost from the region, Scotland or the wider United Kingdom.

Recent developments have seen several companies delay or scale back investment plans due to policy uncertainty from both Westminster and Holyrood. This lack of clarity has eroded the potential pipeline of workers for suppliers and created a challenging environment for new entrants. Offshore Solutions Group, the developer of the Moray FLOW-Park, has indicated that its wet storage site for floating wind foundations could be operational by 2030. However, the company has stated it will delay construction until there is certainty from developers that the facility will be required. Similarly, Korean moorings firm Moor East has scaled back its plans for a manufacturing site in Aberdeen, which was previously tipped to be based in the Energy Transition Zone. The firm announced that its initial plan to create 100 jobs has been reduced to fewer than 40, as it shifts its focus towards establishing a logistics yard rather than a full manufacturing operation.

The uncertainty has also affected international investment. This year, the UK government blocked plans by Chinese turbine manufacturer Ming Yang to build a floating foundation and turbine manufacturing site in the Highlands, citing security concerns. McGinlay attributed the hesitation of external investors to a lack of certainty, noting that while companies recognise the strength of the local supply chain and the talented workforce in the north-east, they are unwilling to make substantial investments without guaranteed orders. She described the current situation as a barrier to finalising decisions, with potential investors waiting for clarity before committing funds.

At the Floating Offshore Wind Conference in Aberdeen, McGinlay addressed attendees at an ETZ fringe event, stating that the industry’s major problems are within the gift of governments to solve. She highlighted specific policy issues that have caused project delays and cancellations, including the strategic spatial energy plan. She warned that if the UK government chooses the wrong pathway, it could hamper offshore renewable projects in Scotland. Additionally, she criticised the timeline for reforms to transmission charging, noting that Scottish developers will have to wait until 2029 for changes. McGinlay described this delay as closing the stable door long after the horse has bolted, arguing that it makes it challenging for Aberdeen to retain talent if new opportunities do not materialise.

The conference was marked by a notable absence of physical presence from government officials. Scottish first minister John Swinney attended virtually on the first day, while no UK government energy ministers, including secretary of state Miatta Fahnbulleh, made an appearance. McGinlay outlined the specific actions she believes are required from both administrations. For the Scottish government, she called for the prioritisation of consenting for floating offshore wind projects, arguing that while due process is necessary, the long wait for consent is hindering progress. For the UK government, she urged recognition of the shared goals of reindustrialisation, economic growth and energy security. She specifically called for a review of the transmission charging regime to ensure it does not penalise Scottish projects and for the selection of the correct pathway in the strategic spatial energy plan to avoid further disadvantage to the sector.