I was disappointed, but not surprised, to learn that, once again, this country had let a potentially large commercial opportunity in the renewables sector slip away.
I’m referring, of course, to the sale of the former Vestas wind-turbine manufacturing plant near Macrihanish, in Argyll, which has been taken over by the Danish company, Skykon.
Highlands and Islands Enterprise put a huge amount of effort into striking a deal to ensure the future of this plant and brokered a £9.7million Scottish Government funding package.
Basically, what this plant will do is manufacture turbine towers – not overly hi-tech perhaps, but it employs a highly skilled workforce and fulfils a necessary role in the wind-turbine supply chain.
I’m told by a very reliable source close to the Scottish Government (I’ve always wanted to say that) that they were not inundated with offers.
The question is “why not?”. Here was an opportunity for a Scottish fabricator to get a foothold in the wind-turbine industry, learn about it, expand it globally and perhaps even grow the business so that it incorporated other parts of the sector.
Skykon has said that it aims to increase the workforce to more than 300 over the next two years. So why couldn’t we do the same thing?
Are we just not interested or not opportunistic enough? Did the managers of the companies that could have been potential buyers decide they knew nothing about the wind-turbine sector?
Well perhaps, but a clue lies in the response to an unrelated question I recently put to a chap I know who runs a small hydrogen systems company in England. What started out as a conversation about one of his product developments turned into a general chat about the state of the entire renewables sector.
His view – which I agree with – is that the sector is currently in limbo. Actually, we agreed that the sector in the UK is in limbo whereas, elsewhere, it seems to be continuing to make progress.
He thinks the problem is the oil price. Investors here deem it to be too low to warrant investment in relatively expensive renewable technology.
To an extent, this could be right. UK investors and, indeed, corporates could well look at the oil price and decide it is not worth investing in. But this is, of course, very much the wrong decision and contrasts heavily with what’s happening elsewhere in the world.
We should, in fact, be taking advantage of this temporary remission in high oil prices and be putting in a much larger effort to get new, clean technologies on the ground. In practice, investment should be going up now, not down.
Let me give one example of how others think.
In the US, a company called the Hydrogen Engine Centre builds hydrogen-fuelled internal combustion engines. It has just sold a whole bucketful of these things to the Canadians to support a hydrogen energy technology demonstration project at Montreal’s Pierre Elliot Trudeau International Airport. They will be fitted to luggage trailer tractors and used in other similar applications.
Of course, Canada is renowned for doing things like this. It already has a fair amount of ethanol production and has built a demonstrator-scale carbon-capture plant.
The Canadians are planning ahead, which is what we should be doing. They know full well that the oil price won’t be staying low (relatively speaking) forever and will soar the millisecond after economic growth starts to take off again.
Now, there is at least one company in the UK that could do this, but has limited its activities so far to converting a Ford Transit to run on hydrogen. That’s good, but we need to do more. We need desperately to up our game.
It is, of course, true to say that there are companies in Scotland, and throughout the UK, that are working hard and enthusiastically developing new technologies. Whether it’s wave energy or fuel cells, we have a finger, or at least a fingertip, in the pie.
Interestingly, I even found a company in England recently that now builds wood-pellet boilers. They cost as much as a small car, but at least it is making the effort.
However, if we consider the big projects such as offshore wind, then our involvement is minimal. It is as if Britain is resigned to losing out on the high-value, hi-tech bits of that sector.
The stupidity of the situation with wind is that it is this sector which is receiving the largest level of Government financial support.
This means, of course, that most of that funding will be going to foreign companies.
But then it would seem that most of the cash for investing in windfarms will be coming from the European Investment Bank, not the UK banks.
That, I suppose, was to be expected, despite the fact that, according to the British Wind Energy Association, no windfarm has ever defaulted on loan payments.
In the same vein, the Government’s support for electric cars doesn’t quite go as far as getting them manufactured by UK companies.
The Government’s decision to support possibly up to four carbon-capture and storage demonstrators is also interesting because of its insistence that it will benefit UK industry.
According to the Government, we will become world leaders in this sector and able – presumably – to sell products and services all over the globe. It’s talking through its flue stacks.
Why? It’s simple. The UK does not have any carbon-capture technology building companies.
We have a few companies which think they know something about it, and one or two that aspire to become players in the CCS business, but existing major overseas players already involved in rolling out demonstrators will take most, if not all, of that business.
We are already too late and playing catch-up and, without some astonishing technological advantage to offer that beats all the competition into the ground, we will be bit players – again.
There’s some simple logic here that this Government really does need to start applying.
Creating legally binding targets for CO reduction is easy. Making sure that, in the process of achieving those targets, the country can actually build an industry that will create lots of long-term, high-value-adding jobs and contribute positively to exports so far seems to be largely eluding us.
This has to change, and it is still possible this can happen. We can still create a powerful indigenous renewables sector, but we need Government to create the conditions in which that can happen.
Setting targets for CO levels won’t, on its own, do it. Setting targets for CO levels together with a clear and concise plan on how we achieve those targets in a manner that is best for our industry is what we have to do.
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