SNP ministers have been accused of making a “calamitous error” by selling offshore windfarm licences around Scotland’s coast for a fraction of what comparable sites have been sold for.
Kenny MacAskill - a former SNP minister who is now an Alba MP - said the country “has been sold out on the cheap” after discovering that windfarms sites on the other side of the Atlantic are going for record sums.
Last year the Scottish Government and the Crown Estate - which owns the seabed - trumpeted the £700 million raised in an auction which saw 2,700 square miles off the coast of Scotland licensed for 17 giant windfarm projects.
Nicola Sturgeon welcomed the sale as a “truly historic” part of the country’s transition from North Sea oil and gas to renewable energy.
But MacAskill said in the weeks after Scotland’s £700 million auction New York put the New York Bight, an subsea area off Long Island, up for auction and received $4.37 billion US dollars for a quarter of the size Scotland released.
The MP said he was “absolutely astonished” to learn that the Scottish auction was capped at a maximum level after corresponding with Scottish Finance Secretary Kate Forbes on why the sum raised was comparatively small.
MacAskill said: “The reason it raised so little is that the auction was capped - there was a maximum price.”
“That is absolutely astonishing. Most auctions I know have a floor price but not a maximum.”
“But in this instance the Scottish Government said ‘that’s the most you need to bid’ and hence we couldn’t get more. The USA had no such absurd limit.”
MacAskill said the Scottish Government response to his inquiry was “full of excuses”.
He said: "It stated that the that Crown Estates had a statutory obligation to transact at 'market value'. Really? The New York sale dwarfs it and they don’t let the market regulate itself by capping it.”
MacAskill also highlighted how the government admitted the first auction round had to be withdrawn because the price set was “woefully low”.
After an expert review of the pricing structure in 2021 the Crown Estate and Ministers set a ten-fold increase in the level of the cap to reflect changes in the offshore wind market.
MacAskill said: “They had to withdraw the first auction having set it woefully low. So why didn’t they learn from that and ensure no maximum bid price? They increased the threshold by a factor of ten which is an indication they’d recognised they were making it too low before.”
In their response to MacAskill the Scottish Government said that a number of factors, including more challenging sea conditions, with deeper water, and higher grid connection charges had to be taken into account.
For many of the proposed floating wind farms a technology yet to be proven at scale but the letter added “nonetheless, the £700 million of option fees is a huge vote of confidence in Scotland’s offshore wind opportunities.”
MacAskill said: “The Finance Secretary’s letter stated they looked at international comparators. If that’s the case they should hang their head in shame.”
“The £700 million price isn’t ‘a huge vote of confidence’, as Ministers claimed, but an indication that we’ve been sold out on the cheap.”
A Scottish Government spokesperson said: “The ScotWind leasing round was designed and administered by Crown Estate Scotland and it was designed to focus on quality and deliverability of bids."
"Placing a cap on the amount bidders could offer per square kilometre ensured that bidders would have confidence to meet the further investment necessary to deliver on each project and realise the associated supply chain benefits."
A spokesperson for Crown Estate Scotland said: “Comparing ScotWind to processes in other countries is comparing apples and pears, as potential varies depending on the seabed, supply chain, grid, and other factors.
"The £700 million from initial fees is just one part of the picture.
"Current estimates state there could be £1.5 billion investment in the Scottish economy for each of the 17 projects, plus annual multi-million pound payments once projects are operating.”
To sign up to the Daily Record Politics newsletter, click here.
