Berwick Bank delays are hurting Scottish supply chain

Delays in approving the mammoth Berwick Bank offshore wind farm are putting potentially billions of pounds of investment and thousands of jobs at risk, a business group has warned.

Despite the project’s planning application having been made in December 2022, the 4.1GW super project is still awaiting a decision from Scottish Ministers.

The Aberdeen and Grampian Chamber of Commerce (AGCC) marked the two-year anniversary of the submission of the project’s planning application, claiming it is “not an anniversary the Scottish Government should be proud of”.

Fears have been rising that this is having a chilling effect on private sector investment and having a knock off effect for the supply chain.

For example, Vestas (CPH:VWS) has been looking to establish an offshore wind turbine blade facility in the Port of Leith, eyeing the pipeline of Scottish offshore wind projects, including Berwick Bank and the ScotWind programme.

However, industry rumours have suggested that the Danish wind turbine manufacturer is holding off on submitting the application until Berwick Bank is approved.

The company previously submitted a proposal of application notice in June this year, outlining its plan to develop the facility. It also engaged in two pre-application consultations to refine its proposal.

© Supplied by Scottish Energy Port

Under Vesta’s proposal, the company will develop a manufacturing facility for offshore wind turbine blades along with a laydown area at the Port of Leith to the east of Imperial Dock.

However, its original plan envisioned submitting the full planning application in October – as of yet, there has been no announcement of it being made.

Vestas has said that the facility has the potential to create around 1,000 direct jobs and further indirect jobs in the local supply chain. Most of the jobs would be filled by local workers.

Under the current timeline, Vestas expects a decision on the planning application by spring 2025, with development of the project to commence that summer.

Operations were expected to start in winter 2026.

Forth Ports CEO Stuart Wallace told Energy Voice: “I continue to have very positive dialogue with Vestas about the possibility of that blade factory being here. We continue to work with City of Edinburgh Council around the detail of that planning application.”

He added: “I remain very optimistic and confident about our aspiration to attract that supply chain into a site like the Port of Leith.”

The delay in the Scottish port comes as the wind turbine maker Vestas announced 600 workers at its Isle of Wight factory were at risk of redundancy.

Employees at the Newport plant have been told at least half of its manufacturing operation will be cut amid changing demand for turbine blades.

Vestas is switching from making offshore blades to smaller, onshore blades, which will only sustain 300 jobs at the site, it said.

Investment at risk

Speaking of the impact of delay’s to SSE Renewables’ (LON:SSE), AGCC chief executive Russell Borthwick said: “This isn’t an anniversary that the Scottish government should be proud of.

“We have in Berwick Bank an offshore wind project of transformative scale, which will benefit Scotland’s economy, create jobs and give confidence to our energy supply chain.

“No country can be taken seriously in its commitment to the energy transition unless we’re consenting projects of this nature at pace.”

The chamber boss’s intervention came ahead of an investment announcement planned for the Port of Leith, a key part of the Forth Green Freeport, being led by Scottish Ministers Thursday.

The Berwick Bank super project will be based off the east coast of Scotland in the outer Firth of Forth.

© Bloomberg

The project made some progress through the approval process, receiving planning permission in principle from East Lothian Council for the project’s onshore infrastructure, including a new substation at Branxton, south of Dunbar in East Lothian.

However, the process has stalled, with a planned approval date for the planning application early this year coming and going. This consent is vital to allow SSE Renewables to enter construction on the project.

The AGCC warned that these delays are not only jeopardising the project and its ability to contribute to Scotland’s clean energy targets, but is holding back thousands of jobs and billions in investment.

An economic impact study, commissioned by SSE Renewables and performed by consultants BVG Associates, said that Berwick Bank could represent a £4.1 billion economic boost for Scotland and create around 4,650 direct, indirect and induced jobs.

Across the UK as a whole, the project could support around 9,300 positions, adding an estimated £8.3b to the collective economy over the lifetime of the project.

Strained timelines

SSE Renewables originally envisioned taking a final investment decision on the project in 2025.

The economic impact study also said that peak construction, and the majority of the jobs associated with the wind farm, would come in 2026.

This timeline was hit by Berwick Bank missing the deadline for Allocation Round 6 (AR6) and with it the opportunity to receive a contract for difference (CfD).

Berwick Bank will need to wait until AR7 to bid for a CfD, which is set to come in 2025, not long before the project’s expected commissioning date of between 2026 and 2027.

With a CfD, SSE Renewables will be unable to line up key contractors to build and support the wind farm.

While the Scottish government has vowed to work with SSE Renewables to progress the wind farm, the AGCC said that first minister John Swinney should intervene personally to speed up consent.

“Talk about ‘streamlining’ the process is all well and good, but if plans are left gathering dust on a civil servants’ desk for two years, then questions must be asked,” Borthwick added.

“As Scotland marks two years since the Section 36 application for Berwick Bank was submitted, the First Minister should roll up his sleeves and intervene – put the project to the top of his in-tray, grant consent and give Scotland’s clean energy sector an early Christmas present and some much-needed confidence.”

Energy Voice has approached Vestas, Forth Ports and Edinburgh City Council for comment.

© Jane Barlow/PA Wire

Deputy first minister Kate Forbes told Energy Voice: “On Berwick Bank, we will conclude that as quickly as possible. We have to weigh up the opportunities with Berwick Bank with protecting the marine environment, but Scottish ministers want to come to make a decision as quickly as possible.”

She added that the Scottish government will double the number of people that are in the consent unit by January in order to speed up the process of approving future projects.

“More generally, I’m very conscious that we need to de-risk support for the supply chain to the greatest extent possible,” she noted.

In addition, the UK government’s recent Clean Power 2030 Action Plan, laid out potential reforms to the upcoming Allocation Round 7 (AR7) that could help avoid other projects from suffering similar delays to Berwick Bank.

One change would allow fixed-bottom offshore wind projects to bid for a contract for difference (CfD) even if they have not yet obtained full planning consents.

According to the plan, this would allow developers to engage with the supply chain earlier in the development cycle.