Foreign state ownership threatens the Saudi Arabia of wind
When a nation is blessed with a natural bounty either from its land or seas, it’s only right that all should benefit, not just a few, as well as providing for generations to come. Norway has shown that can be done. It’s economy and society transformed by North Sea oil and gas with a legacy secured for generations to come through its Futures Fund. Now, it's valued at $1.4 trillion and suggested to have an average of a 1.5 per cent stake in every listed company in the world.
Scotland, which discovered oil and gas at the same time can only look across the North Sea and weep. Funds were used by Thatcher to smash the unions and by Blair for illegal wars. Now, what remains is being burned off at a pace and scale that’ll destroy our planet, not just our land. Similarly, the British National Oil Company sold off, all whilst Equinor the Norwegian State energy company goes from strength to strength.
However, a new bounty has been discovered in renewable energy off our shores. Scotland has been blessed yet again, as has the UK. “The Saudi Arabia of wind” was Boris Johnson’s description of it and on that, if little else, he was right.
But will our land and people benefit, either in Scotland or the UK? The privatisation mantra that has continued under both Labour and Tory Governments is seeing this public asset sold off for private profit. Benefiting the few not the many and exploiting for today’s generation without consideration of those to come.
It needn’t be this way though, as other lands show. Denmark has recently announced that the state is taking a 20 per cent stake in every offshore wind development. This is not a tinpot dictatorship but a European democracy, and it has not seen investors flee. It doesn’t conflict with private development by the big multinationals, but ensures a stake now and for the future for Danish citizens. That model could and should be followed here.
Instead, both in Scottish and UK waters we’ve seen our people’s bounty sold off and often for absurdly low sums. The Scottish Government trumpeted it’s near £800 million received form the ScotWind auction. Yet a quarter of the acreage was sold off by New York State for over $4 billion and the European energy market, of which Scottish waters are part, is larger than that of the US.
There’s also the absurdity that both Scottish and UK Governments are selling off this public asset, not just to the usual big corporations, but also to state owned firms. The painful irony being that none of these state enterprises are run for or from Edinburgh or London. As research from the House of Common Library disclosed that the Danish State company Orsted and Norwegian State operator Equinor own the largest share of UK offshore wind at 20.4 per cent and 9.2 per cent. Meanwhile, UK public entities accounted for a miserly 0.03 per cent.
The situation’s equally stark in Scottish waters where once the Scottish Government promised a state energy company but shamefully abandoned their plans. Instead, 6 state or publicly owned companies, whether owned outright or with a controlling stake held by the state, operate. Simply going up the coast from the Firth of Forth to the northeast of Scotland takes you past fields being operated by the following state energy companies.
There’s EDF, Energie de France, the French State energy company who also operate UK nuclear sites. Then, there’s ESB, the Electricity Supply Board of the Republic of Ireland, who’s largest ever investment outwith Ireland is now in a windfarm in the Firth of Forth. Along from them there’s Red Rock Power, listed on the Shanghai stock exchange but over 49 per cent held by the Chinese Government. A bit north you come across another Scandic state operator, this time Vattenfall, 100 per cent owned by the Swedish Government. Not far from them there’s Equinor, already mentioned as the Norwegian State energy firm but involved now in wind not just fossil fuels. Finally, there’s MASDAR owned by the UAE government.
Profits and control are leaking abroad, undermining energy security, restricting the ability to provide affordable energy for our people and businesses, failing to be able to assist a just transition or support investment in new technologies. Yet from Communist China through to a Conservative Government in Sweden, other countries see the benefit in a state energy firm.
Whether it’s a stake in every field, a State Energy Company or preferably both, it’s time the absurdity of
publicly owned but only from abroad ends.
Kenny MacAskill is the Alba Party MP for East Lothian.
