Tag: offshore wind

Audit Scotland: Transparency needed on ScotWind funds

The Scottish Government needs to be more transparent about how it will use £755 million raised by a high risk and reward offshore wind leasing round, says the Audit Commisson in a new report published today.

In 2020, Crown Estate Scotland (CES) launched ScotWind. The leasing round offered buyers capped prices for the option to develop the seabed – rather than maximising immediate returns through an open auction. The rationale for the decision was to increase the chance of securing long-term lease payments. The CES Board scrutinised the approach and it was agreed by the Scottish Government. However, no single business case for the ScotWind leasing round was produced.

In 2021, a rapid review of ScotWind was instigated when a rest-of-UK leasing round generated record revenue through an uncapped, open pricing approach. CES drew on external advice and increased the seabed development fee cap from £10,000 to £100,000, although a much higher cap was considered and rejected.

The rapid review also put new penalties in place to encourage developers to deliver on their supply chain commitments, but these need to be further strengthened for future leasing rounds.

The £755 million initially raised has been banked by Crown Estate Scotland over 12-month terms on behalf of the Scottish Government. This gives ministers maximum access to the funds and allows them to be used to balance the budget. However, it has limited Crown Estate Scotland’s investment options and financial returns.

Ministers have drawn down £96 million of ScotWind funds to date. But it is not clear how the money has been used to support the transition to net zero.

Nor is it clear how the Scottish Government intends to use remaining ScotWind funds over the course of the Parliament. That extends to the need for transparency around the purpose and operation of a new ScotWind Wealth Fund as ministers’ plans develop.

Stephen Boyle, Auditor General for Scotland, said: “Crown Estate Scotland and the Scottish Government took a high risk and reward approach to the ScotWind leasing round. Whether that decision represents value for money will be determined in the coming years.

“If developers sign long-term leases before their option periods end, then annual payments will continue to benefit Scotland for the next 60 years.

“However, if they give up their options the capped option pricing model will result in limited wider economic benefits and substantially reduced public revenues.

“What is now important is that the Scottish Government is much more transparent about their plans for how the ScotWind funds will be used across this parliamentary term and beyond.”

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Record investment for climate action

£5 billion to help tackle the climate and nature emergency

Record funding of over £5 billion will support climate action and further develop Scotland’s renewable energy sector, creating green jobs and bringing benefits to communities, Climate Action and Energy Secretary Gillian Martin has said.

The major investment, unveiled in the draft Scottish budget for 2026-27, will help tackle the twin crises of climate change and biodiversity loss by funding policies and actions aimed at cutting green-house gas emissions further, enabling communities to become more resilient to the impacts of climate change and protecting and restoring nature.

Gillian Martin reiterated the government’s financial commitment ahead of addressing the Scottish Renewables Offshore Wind Conference where she is expected to confirm further new investment in the sector.

The £5 billion allocation for climate action in the draft Scottish Budget includes a total of £2.9 billion of capital funding– representing 41% of the Scottish Government’s total capital budget proposed for next year – and supports actions to:

  • further develop Scotland’s renewable energy sector to ensure a fair and inclusive transition that creates more jobs and opportunities
  • deliver more energy-efficient affordable homes to tackle fuel poverty and reduce energy bills
  • invest in public and active travel projects, making it safer and easier for people to choose more sustainable ways of travelling for shorter journeys

Ms Martin said: “This draft Budget for the next year demonstrates the Scottish Government’s continued commitment to achieving net zero by 2045 and tackling the twin crises of climate change and biodiversity loss.

“Done correctly, the transition to net zero can help to tackle poverty, restore nature, and improve health and well-being all while offering significant economic opportunities.

“Our record investment of more than £5 billion will help reduce household energy costs, support green jobs, restore nature and build healthy and resilient communities through the efforts set out in our draft Climate Change Plan. 

“Offshore wind will be a major part of delivering on our climate ambitions and represents a huge economic opportunity for all of Scotland, delivering jobs and attracting major investment across the country.”

The draft 2026-27 budget also proposes: 

  • more than £335 million for heat in buildings programmes, supporting households and businesses to transition to low carbon heating systems
  • £316 million in sustainable travel, low carbon and climate positive activities to support the switch to sustainable modes of transport and promote walking, wheeling and cycling for shorter journeys
  • £26 million for nature restoration as well as £37.4 million for woodland creation and £28 million in peatland restoration, to help sequester carbon and protect habitats
  • £22 million for domestic climate change – including £6 million to continue the national network of Community Climate Action Hubs which enable communities to develop local responses to climate change from flood mitigation, repair shops and local energy generation to food growing and tree planting
  • £12 million to support vulnerable communities in the Global South who have done the least to cause the climate crisis but are feeling its effects most acutely – especially women and young people