Scottish Enterprise reports ‘little prospect’ of major investment in Scottish wave power sector after Pelamis sinks with loss of £16m in taxpayer funds

Scottish Enterprise has had to write off a taxpayer-funded investment of £16.3 million to a Scottish renewables company – its biggest ever such annual write-off.

Pelamis Wave Power Ltd sank into administration last year with the loss of some 50 jobs – resulting in the biggest single annual Scottish Enterprise write-off according to its newly published annual accounts for 2014-2015.

The collapse of Pelamis and the downsizing of Aquamarine Power had a near terminal effect on Scotland’s marine power sector, with the effect that Scottish Energy Minister Fergus Ewing stepped into to set up a separate wave energy quango, Wave Energy Scotland, managed by Highlands Enterprise.

Paul Lewis, Managing Director, Scottish Enterprise, commented: “This was an exceptional year given the £16 million write off in Pelamis Wave Power, that went into administration late last year. It’s important to recognise that this investment spanned over a decade and also secured more than £70 million funding from the private sector.

“Since 2003, our investment activities have secured more than £500 million private investment in Scottish early stage firms and supported thousands of jobs. We’ve also generated £38 million in income over the last three years through this work.”

Meanwhile Scottish Enterprise reported that while it had achieved seven out of eight of its ‘business plan milestones’ last year, the one milestone that it failed to achieved was in the offshore renewable energy sector.

SE admitted that it had failed to ‘secure commitments to major infrastructure, demonstration projects and supply chain developments that help realise Scotland’s competitive advantage in Offshore Renewables’ and  added:

“<While> Commitment to the first tidal array, Meygen, has been secured, after the difficulties experienced by some leading companies there is little prospect of a major new commercial investment in wave sector and there have been delays to supply-chain investment in offshore wind in current market conditions.”

One notable difference between domestic developers and overseas developers in Scottish marine/ tidal power is that the foreign-based companies are focussing on sub-surface turbines – where the marine conditions are much less hostile.