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SCOTLAND is at a critical juncture when it comes to the nation’s renewable energy sector.
The next big project is Neart na Goaithe (NnG), an offshore wind farm worth £2 billion. It will be located less than 10 miles from the coast of Fife and will generate enough electricity to power a city the size of Edinburgh.
The project should be a fantastic opportunity to get the BiFab yards at Methil and Burntisland in Fife back to work.
The yards have been lying empty for almost one year. But there is a huge problem: EDF, the French state-owned energy company.
EDF is one of the world’s largest producers of electricity and in 2018 its revenues were around £60bn.
During a Scottish Parliament debate initiated by Scottish Labour on May 29, it was reported that EDF is on the brink of awarding the contract for constructing the jackets to the Italian industrial giant Saipem.
It is “rumoured” that the jackets, which support and anchor the offshore wind turbines to the sea bed, would be manufactured in the company’s Indonesian yards.
Interestingly, Saipem’s shares have lost more than 80 per cent since the $100-a-barrel era ended in 2014, leaving it with a market capitalisation of around £3.7bn.
This potential scandal overseen by EDF on the NnG project follows the announcement in March by the Belgian procurement firm GeoSea DEM on the Moray East project to award contracts for 100 turbine jackets to the United Arab Emirates fabricators Lamprell, and Belgian steel constructors Smulders.
It’s our understanding that Smulders will further subcontract their work to yards in Belgium, Spain and the north-east of England. The BiFab yards in Fife bid unsuccessfully for a proportion of the work.
In Kincardine, despite the best efforts of BiFab once again, the fabrication work for five platforms supporting the project was awarded by procurement firm Cobra Wind International to the Spanish state shipbuilders Navantia.
Last year, Navantia was €390 million (£348m) in the red. Both the Moray East and Kincardine offshore wind farm projects have a total value of around £2.8bn.
The reality is, the owners of BiFab — DF Barnes — cannot realistically compete for major contracts on the basis of cost against European and international competitors who are heavily backed by state subsidies and sovereign wealth funds.
We also have no clear understanding of the yards in Indonesia but must assume they do not also uphold the same work, health and safety and environmental regulations as the BiFab Fife yards.
But EDF doesn’t seem to know or care about this. So, it begs the question: why does EDF seem intent on subcontracting the majority of the manufacturing work to a yard half way around the world in Indonesia?
We have a better plan for EDF: build these turbine jackets in Fife. The BiFab yards are waiting to get started on work that could create jobs for over 1,000 people.
It would also mean less shipping and significantly less carbon emissions over the lifespan of the NnG project.
EDF has the opportunity to do what’s right and with public and political pressure we can make sure they do it.
Yet, what’s also clear is that the NnG project is potentially just the latest scandal in Scotland’s renewables sector.
Unless the Scottish and UK government intervene to ensure major proportions of future contracts are awarded to Scottish and UK firms, through specific contractual clauses, then this scandal will just roll-on to the next one but not without a fight from the trade union movement.
Pat Rafferty is Unite’s Scottish secretary.
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