Michael Matheson wants all communities to benefit from wind farms

In an exclusive interview with The National, Michael Matheson also disputed recent reports that the selling of leasing rights for offshore windfarms had been a financial disaster, saying it had the potential to bring in billions of pounds.

He ruled out reviving plans for a state-run energy company, but said he was currently examining other ways in which the Scottish Government could invest in energy projects which would benefit the taxpayer.

In January this year, Matheson published a draft energy strategy and just transition plan setting out a vision for Scotland’s energy system to 2045, which is still being consulted on.

He said it showed the “huge potential for Scotland to be a real renewable energy powerhouse”.

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But he said independence would mean Scotland would have powers to move more quickly on issues in a “time frame that is more reflective of our need”.

“For example, one of the things that I would like to see happening is that very often with onshore wind, communities don't feel that they get as much benefit from developments in the way in which they should,” he said.

“We as a Scottish Government have produced good practice guidance to encourage developers to make sure that local communities that are impacted by onshore wind farms get benefit from these developments.

“The reason I can't make it mandatory is because it is part of the electricity market, which is reserved to the UK government.

“So if we as an independent country determine that onshore wind developers should actually be required legally to ensure that communities get direct benefit from their development, then we'll be able to actually apply that legally.

“Right now, we can't do that and the UK Government is not minded to do so either.”

He added: “We produced a lot of guidance for the industry and a lot of the industry are actually committed to doing that, but I actually think it should be mandatory.

“There could be nothing worse than having a wind farm you can see in the hills behind you from your house, but you find your energy prices are going through the roof.

“Why are we producing what is one of the cheapest forms of electricity in Scotland but paying sky high prices for it?”

One of the areas of energy policy which has recently sparked controversy is the ScotWind leasing process, which enabled developers to apply for seabed rights to plan and build windfarms in Scottish waters.

The Crown Estate Scotland auction netted a one-off sum of £775 million, but there have been claims the rights were leased for a “pittance” compared to similar auctions which have taken place elsewhere in the world and that promises of supply-chain benefits staying within Scotland have not been met.

But Matheson said some of the narrative had been “misinformed and misplaced” and comparisons with other countries were like “comparing apples and oranges”.

Michael Matheson (Image: PA)

“Scotland was the first offshore leasing ground for floating offshore wind anywhere in the world,” he said.

“It is about moving wind energy into much deeper, rougher waters, predominantly in the east coast of Scotland, in a way that has never been planned for or delivered in the past.

“And ScotWind is leading the world in the development of floating offshore wind technology.”

Matheson said there are only three small offshore floating wind sites at present – two of which are in Scotland – for testing out the technology.

He said the reason there was a cap on the auction prices was because it is new technology being developed, which is being used in waters “much deeper and rougher” for the first time.

“[The cap] was to incentivise and to help to support the industry in doing that, but alongside it what we put in for the first time in a leasing round of this nature as well was a supply chain development plan, which requires the developers to invest in the domestic supply chain,” he said.

“So sitting alongside not only the hundreds of millions of pounds that are paid in upfront leasing fees, there is also the rental income, which we then get once you start generating, which will bring in billions of pounds into Scotland.

“It’s dependent on how much energy in the end they produce, how much money we get – but it will bring in billions into Scotland.

“The third part to that is the supply chain development plan, which the developers have set out, which will see almost £25 billion being invested in the supply chain in Scotland.

“So when you bring all of these things together – new technology in a very different environment which has never been used before, alongside the lease fees and the income that we get, the billions of pounds of income we'll get from the rental once they're up and operating alongside the investment in the supply chain – you can see the huge economic impact that will have for Scotland going forward.”

Another issue that has sparked controversy is the ditching of plans for a public energy company in Scotland, which the SNP pledged in 2017.

Matheson said the intention was to create a new firm to sell energy to the public, but it did not go ahead due to market volatility which saw energy companies going bust, and because the Scottish Government did not have the financial flexibility to borrow the money which would be required to set it up under existing powers.

He acknowledged the Welsh Government has unveiled plans to establish a publicly owned energy company to develop renewable projects, but said while this had been considered, the scale of the projects taking place in Scotland were different, being far bigger.

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He said: “What I am keen on looking at is that there is absolutely no reason why we shouldn't be looking at taking a level of investment into, or taking a share of investment that's going into energy projects that are being developed in Scotland.

“And right now I'm looking at how we can go about doing that – other ways in which we can actually be one of the parties that's involved in the development of energy projects and how we might be able to take that forward and the economic benefits that can come from that in the years ahead.”

He added: “I don't want to get into the specific projects, but I'm looking at other models that would allow a public sector stake in energy projects in the future.”