John Ferry

The paradox at the heart of Nicola Sturgeon’s green ‘revolution’

The paradox at the heart of Nicola Sturgeon’s green ‘revolution’
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In some ways it was refreshing to see the radical left brought to heel by the realities of government. Having spent years campaigning to ‘ditch neoliberal economics for good’, this week saw the Scottish Green Party celebrate Shell and BP winning contracts to exploit Scotland’s offshore wind potential for the enrichment of their shareholders. Far from being a strike against neoliberalism, the Greens have provided a ringing endorsement of capitalism’s place in the transition away from fossil fuels.

This came on the back of the ScotWind Leasing project, which has seen the Scottish government auction off seabed plots for major offshore wind projects around the Scottish coast. In the first such leasing round in a decade, 17 projects were chosen, covering 7,000 square kilometres. The project raised £700 million in option fees for the Scottish government. BP Alternative Energy Investments is paying £85.9 million for its area off the coast of Aberdeen, while Shell New Energies is forking out £86 million for its site, also off the east coast.

The SNP and Scottish Greens are touting it as a major boost to Scotland’s net zero ambitions and a sure sign of a profitable green future to replace the oil industry. Scotland’s left — the real left — are unconvinced. As well as their unease about the involvement of big oil companies, many have pointed out that the Scottish government has failed to build the manufacturing base necessary to benefit from the move to green energy, with economic activity as well as profits set to be directed elsewhere.

Trade Union GMB Scotland asked if the tens of thousands of green manufacturing jobs these developments will create will come to Scotland or the rest of the world. ‘After a decade of broken promises and political failure, that’s the only question that really matters to our members,’ said GMB.

Others questioned whether the opportunity has been undersold, and whether the Scottish government has failed to learn the lessons of the past by not insisting government take an equity stake in the developments. Labour MSP Katy Clark said: ‘Scotland’s green assets should be owned by its people. Every single one of the 17 leases awarded is to a multinational or foreign-based company.’

There is also disquiet that Nicola Sturgeon has reneged on a promise to create a state-run energy company while being happy to sell out to big business. The irony that it is the Scottish Greens sitting at the heart of all this is palpable. It must seem to Scotland’s radical left that the Greens aren’t so much compromising on their principles as completely jettisoning them.

Meanwhile the Nationalists have been quick to tell us — obviously — that the lease deals show how well Scotland will do if it leaves the UK. SNP MP Kirsty Blackman highlighted the announcement, saying, ‘Imagine how many more announcements like this we’ll be able to make with the full powers of independence.’

The problem with this argument is that Scottish secession would lead to announcements like this becoming far less likely. This is because the viability of Scotland’s offshore wind developments relies on the island of Britain remaining within a single state, with a fully integrated electricity market.

Analysis from These Islands’ Sam Taylor shows why this is the case. The British power market works on the basis that sparsely populated Scotland exports excess electricity to the heavily populated south, while subsidies for Scotland’s renewables industry and associated infrastructure flows north. These subsidies are substantial. It is estimated that in 2019/20, subsidies to support Scottish energy generation and transmission amounted to around £1.2 billion.

An exit from the UK would bring an end to Scotland benefitting from GB-wide socialised power subsidies. The interconnectors that supply electricity from Scotland to England would remain in place, but, as with France and other foreign states, the remaining UK would pay the wholesale market price for electricity from Scotland instead of a subsidised price.

That change in the economics of the electricity market would be to the substantive detriment of Scotland’s offshore wind industry. An inevitable outcome of secession therefore would be the degradation of Scotland’s renewables growth potential.

The Scottish Green’s support for big business involvement in the North Sea might feel to Scotland’s radical left like a betrayal. Most people though will see it as a necessary reality of being in power. What is scandalous is the Green’s support for a secessionist cause that, if it ever wins its ultimate prize, will set Scotland’s renewables potential back years.

Written byJohn Ferry

John Ferry is a contributing editor for the think tank These Islands and a former financial journalist

Topics in this articlePoliticsScotland