NOBODY ever lost money by under-estimating the critical faculties of the Scottish media, particularly where big numbers are involved.
Phrases like “multi-million pound investment” and “jobs joy” have long been guaranteed to spread good cheer. And if that’s what it says in the press release, who wants to be the spoilsport who rains on the parade? Ok, I accept the role.
Last month, this particular journalistic genre reached stratospheric heights. “Multi-millions” were suddenly peanuts. Iberdrola, owners of ScottishPower, were set to invest £3.2billion in Scotland by 2012.
It said so on BBC Scotland (from morning till night). It said so in the newspapers. Indeed, by the weekend, it had become “a £3.2billion investment in the Scottish renewables sector”. So it must be true. Mustn’t it?
The more I heard of it, the less plausible it sounded. Three-point-two billion used to be a lot of money in pesetas, never mind pounds. And by 2012? That’s not an awful lot of time to spend 3.2billion of anything.
Most of what we were hearing came from the lips of Alex Salmond, first minister of Scotland, and that did not do a lot for confidence either. What exactly was involved in this £3.2billion, I began to seriously wonder?
In the old days, when Scottish ministers went abroad on inward investment missions, we usually came back with quite specific results to announce. So many jobs in such-and-such a place. There didn’t seem to be anything like that in Mr Salmond’s paean of praise to Iberdrola – just this big number £3.2million.
According to the first minister, it was all about confidence in Scotland, massive faith in our renewables future and so nebulously on. Where, asked my old suspicious mind, is the beef? So I went looking for Iberdrola’s own press release.
Its tone was rather different. For starters, the headline referred to investment “in the United Kingdom” – hardly surprising since half of ScottishPower’s business has been in the north-west of England and north Wales since the they took over Manweb in 1995.
However, Ignacio Galan, chairman of Iberdrola, had indicated that “two-thirds of the investment earmarked for the UK will be for Scotland, primarily to develop windfarms, smart grids and carbon capture….”.
At this point, the picture started to clear. This was not “inward investment” as we know it that was being talked about. It was infrastructure investment, essential to keep ScottishPower operating as a highly-profitable utility and with no guarantees of where the money would be spent.
Take windfarms, for example. ScottishPower has major plans for offshore wind but everything that is going ahead at present is in English waters, East Anglia and Cumbria to be precise. A possible project off Tiree is at a very early stage.
Onshore, ScottishPower has the biggest windfarm in Europe at Whitelee, south of Glasgow and it is looking to Salmond’s government (with confidence, I imagine) for a one-third expansion, taking it to 539 MW.
Iberdrola’s sole reason for building these windfarms is that the ROC system makes them immensely profitable. The benefits to Scotland – or indeed the UK – are less obvious. For the remarkable fact is that they have (as the press release says) become the “leading power developer and generator in the country” without building a single turbine in the UK, far less Scotland.
Turbines for the first phase were built in Denmark; the week after Salmond’s Basque ballyhoo, ScottishPower announced that the next lot would come from Alsthom in Germany. So surely the real story is not that ScottishPower is building a windfarm. It is that ScottishPower has built Europe’s biggest windfarm with scarcely a nod in the direction of a Scottish supply chain.
Back to the Iberdrola press release. Remarkably, under the sub-heading “Flagship Projects in Scotland”, it includes the fact that the group has “established a joint venture with GDF Suez and SSE” to build a new nuclear power station at Sellafield.
Salmond, of course, forbids any such investment in Scotland on ideological grounds. However, it remains a mystery why he should fete a company that wants to build a nuclear power station 20 miles from the Scottish border, while hell-bent on closing down the same industry in Scotland. Jobs for Cumbria – but not for Ayrshire.
Then we have Longannet and carbon capture. To say that Ibedrola’s investment commitment here is tenuous would be an under-statement. The vast majority of the money will come from the taxpayer, but only if ScottishPower wins a carbon capture contest being run by the UK government. The real question for Iberdrola is what happens to Longannet if it doesn’t get British taxpayers’ money?
I have no quarrel with Iberdrola or ScottishPower. They are putting a few million into wave power off Islay and tidal power in the Pentland Firth. They are investing in the future of their core business, as any sensible company would. As far as I know, they are one of the better utilities.
But they should be more careful about the political agenda they are being dragged into. For the real story is not how much economic benefit is coming to Scotland from the renewables boom, but how little – and Iberdrola is a big part of that story.
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