Building the foundations for the revolution

When you have worked in economic development as long as I have, you tend to
recognise the life cycle of big projects – the initial planning, the discussions, the
negotiations, the moment of financial closure, and the buzz when construction starts
and people are employed.

Yet, when you are helping build the framework for a whole new industry, the
development cycle is there, but it’s more subtle, comprising the background noise of
individual projects progressing towards a common goal. And just like that moment in
a crowded room, when lots of conversations pause, providing a moment of quiet, I’m
sensing a bit of calm before the storm.

It’s just a brief pause before a Scottish-wide storm of opportunity, as we ride the
wave that the burgeoning offshore renewables sector offers us in a once-in-ageneration
opportunity to revolutionise our economy. A big part of our job, as the
Scottish Government’s economic and community development agency for the North
and West of Scotland, is to maximise the impacts of this golden moment – creating
sustainable quality jobs, attracting inward investment and strengthening communities
right around the edge of our region.

To highlight what I mean I would draw your attention to a few examples –
Machrihanish, near Campbeltown, Arnish, near Stornway and Nigg on the Cromarty
Firth.

Significant investment has been made in developing the Machrihanish site as a wind
tower manufacturing plant – the only one in Scotland. This has brought sustainable
employment to one of the country’s most fragile rural economies, with 134 currently
employed by Wind Towers (Scotland) Ltd – a business now 80.1% owned and
operated by SSE with 19.9% investment from HIE.

Campbeltown is one of few lee ports on the west coast offering a sheltered harbour
with 9m dredged depth and easy access to Machrihanish where extensive areas of
secure hardstanding are available beside the turbine tower factory. As such it is
ideally placed to support the offshore renewables market given its proximity to two of
Scotland’s seven proposed offshore wind farm sites and five tidal and wave energy
sites.

In the Western Isles, the Arnish Business Park is one of the Renewable Energy
Enterprise Areas in the North. Arnish plays an important role within the energy supply
chain. Investment is ongoing at the site to increase laydown space and improve
access. HIE leases the site from the Stornoway Trust continues to promote it as a
multi-user site, with one principal energy tenant, BiFab – occupying the fabrication
facilities and undertaking work for the offshore energy markets.

It’s important to remember that both Machrihanish and Arnish are building on
infrastructure developed for other purposes – the former a relict of the cold war and
the latter originally developed for the 70s oil and gas market.

Another remarkable resurrection is the Nigg Yard in Easter Ross, built on the back of
Global Energy Group’s (GEG) long-awaited purchase of the Nigg Yard back in
October 2011. The developments since then have been rapid. The Nigg Energy
Park, as it is now known, is totally revamped, employing 1000 people and buzzing
with activity – oil and gas, specialist fabrication for the nuclear decommissioning
industry, and with strong interest from the renewables sector.

Having been a regular visitor to the site over the past 10 years, it is fantastic to see
the renaissance of this site, and it once again becoming a major employer. The
transformation of the yard, with dereliction cleared, new roads built, the fabrication
sheds cleaned and painted, all full of work, whilst oil rigs are re-furbished in the dry
dock.

Right at the heart of its regeneration is the Nigg Skills Academy, set up last year with
funding from Skills Development Scotland, the Scottish Funding Council and HIE.
The project aims to create 310 newly-skilled employees in its first year and 3000 by
2015.

Ports and harbours are critical in moving the industry forward, and a key part of our
region’s energy proposition. Significant activity and investment is also underway
across other parts of the region, including sites in Caithness, Orkney, Wester Ross,
Inner Moray Firth and Moray all gearing up to service the renewables sector. Indeed
in the past 24-36 months we have seen over £80m of investment either underway or
committed in ports around the Highlands and Islands. But that £80m is just the start,
as to compete in the European and global market places, substantial investment is
required in these sites.

Kishorn Port Ltd is being supported by HIE to work with The Highland Council in a
masterplanning process, leading to a formal planning application for full-scale
manufacture of concrete structures alongside other mixed uses for the offshore
energy markets, including wind, wave and tidal. The plan allows for up to 2,500 jobs
on site, accommodation for 1,500 staff, related storage, warehousing, berthing and
workshops and includes reclamation of the foreshore to create additional lay down
areas.

Kishorn has a long and proud history in energy manufacturing and the advent of the
renewables age looks likely to give the site a whole new lease of life. Trident Energy
is leasing part of the site for sea trials of a prototype electricity generator using wave
power.

Buckie is already playing a role in the offshore wind market, supporting operations of
the Beatrice Offshore Wind Demonstrator Project. The local authority-owned port
could continue to host Windcat-type vessels for crew transfer for operations and
maintenance for future developments in the Moray Firth.

Wick Harbour Authority (WHA) is also progressing plans to allow it to play an active
role in supporting the operations and maintenance (O&M) of the offshore wind farm
developments in the Moray Firth. As the port closest to these developments, there
are clear opportunities, and HIE and its public partners are working closely with WHA
to transform this port into an O&M base for offshore wind farms.

Scrabster has been identified as a key site for marine energy developments in the
Pentland Firth and Orkney Waters (PFOW) – the location of the world’s first
commercial-scale leasing round. A major £20m development in new quayside and a
heavy lift pad is almost complete, opening the door for global tidal energy leaders,
such as Meygen and Atlantis, who will be looking to deploy their tidal arrays during
2014-15.

Orkney continues to be at the heart of the global marine energy industry and HIE and
Orkney Islands Council (OIC) are focused on ensuring that the appropriate
infrastructure is in place to meet the needs of the wave and tidal sector. OIC, as the
owners and operators of Hatston, Lyness and Stromness, have a port strategy and
investment plan in place.

On my most recent trip to Orkney I had the good fortune of seeing Hatston brimming
with tidal energy devices belonging to TGL, Scotrenewables and Nautricity. Another
trip to the refurbished harbour facility at Lyness gave me the opportunity to see Wello
Oy’s Penguin wave decive and a brace of Pelamis’ P2 wave energy device.

Our region’s infrastructure offering was further strengthened last year when the
Scottish Government announced five of our sites (Nigg, Arnish, Scrabster, Lyness
and Hatston) will benefit from Enterprise Area (EA) status. The sites will form the
Renewable Energy Enterprise North Zone, and will offer business rates reductions or
in the case of Nigg enhanced capital allowances for plant and machinery.

EA status for each site is about making things happen faster, where each site has
land available that can be quickly developed to attract renewables activity, create
new jobs and stimulate economic growth across the region. Of course, other ports
and harbours in the region will also benefit from the wider supply chain opportunities
stimulated by the new Enterprise Areas.

As part of HIE’s commitment to maximising the economic and community benefits
that the offshore renewables sector presents, we continue to work with port owners,
local authorities and industry to ensure our sites are investor-ready. In January, the
First Minister announced HIE’s joint working agreements with four of our key ports to
help them attract a potential £100m of investment to the region.

The Memorandum of Understandings (MoUs) with Global Energy Nigg, Port of
Ardersier, Kishorn Port Limited and Cromarty Firth Port Authority will support owners
and operators to secure consents, market opportunities, attract investments and
enable further development.

The Cromarty Firth Port Authority’s Invergordon site is well suited and located for
offshore wind developments in the Moray Firth, and as such is developing plans to
service the offshore wind farm sector during construction and for ongoing operations
and maintenance. The Port of Ardersier is receiving significant interest from potential
inward investors as its hundreds of acres of development land make it an attractive
location for all parts of the offshore wind supply chain.

HIE is fully committed to working with ports across the region to ensure they are
ready to support manufacture, fabrication, assembly, deployment and operational
support for the Scottish, UK and European renewable energy market.

This is just the beginning of a long journey between now and 2020 and beyond. The
offshore wind, wave and tidal sector is growing rapidly, but whilst nobody knows
exactly what infrastructure is required, we do know our sites are located closest to
the majority of Scotland’s offshore renewables projects, and are ideally positioned to
become key hubs for industry.

It is clear that this is an opportunity for the whole of Scotland, the UK and Ireland, but
one where the Highlands and Islands can punch well above its weight.

This article originally appeared in Holyrood Magazine.

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