When ScotWind developers get back to their desks after the summer, one thing on their to-do list will be their updated Supply Chain Development Statement (SCDS). These are due three years after their initial updated SCDS. For most, this means by April 2026.
SCDSs contain ‘Commitments’ and ‘Ambitions’ for expenditure in Scotland and the rest of the UK. Developers knew that SCDSs submitted as part of their ScotWind bids in 2022 could be updated. This meant they could err on the optimistic side at the time. So, will they now take the chance to amend their commitments and ambitions?
It is likely to be floating project developers that feel the greatest need to update their commitments. Back in 2022, there was widespread hope by developers that the world’s leading floating market could be a catalyst for major manufacturing investment and that floating substructure fabrication would take place in Scotland.
The global offshore wind industry has been facing significant challenges with rising CAPEX and financing costs. Floating wind has been harder hit with a risk profile that is uncomfortable for many investors, developers and suppliers. This has impacted potential investments in Scotland. The result is that many developers’ original SCDS Commitments are now challenging to deliver and Ambitions need to be adjusted to fit with the reality of what is possible.
The implications of this require careful consideration. Crown Estate Scotland clearly wanted high ambitions to aim at and will likely accept that industry can only deliver against what is realistic and achievable. The greater risk is political – leaders in Scotland have staked a lot on offshore wind, pushing the sector to be a key component in the ‘Just Transition’. Industry needs to work to manage expectations and aligned what is possible with the goals of Government. With the timetable for some floating projects slipping significantly, Government and industry need to continue an honest dialogue, otherwise floating wind’s political capital is at risk.
There are of course positive developments around the Scottish offshore wind supply chain that provide comfort that investments are coming through. Sumitomo is building its new cable factory at Nigg and significant investment is going into ports, for example at Ardersier and Kishorn. A successful AR7 auction could trigger further new investments. What we need for the updated SCDSs is an open and honest assessment of what is possible, while stressing the positive stories that are out there.
