Samsung abandons £100m wind turbine factory investment in Fife

Letters to EditorThe Editor

The Scottish Energy News     

 5 July 2015



 “Job Losses Blamed on Westminster” headlined Nicola Sturgeon’s response to the news that Samsung was abandoning its offshore wind project in Methil.

When the First Minister accused the Westminster Government of a lack of support, presumably she did not mean the Renewable Obligation subsidy scheme.

Available since 2002 this scheme offers offshore wind farms a guaranteed 25-year bonus payment of 200% and onshore wind farms a guaranteed 25-year bonus of 100% on any electricity they produce. Only 15 months ago the Westminster Government agreed to raise the subsidy rate for Samsung’s turbine to 250%.

The Renewable Obligation (RO)​ subsidy scheme is open to all UK wind projects, and far from being discriminated against, Scotland has been the recipient of the lions’ share of onshore wind subsidy. This has not only supported the SNP’s much more ambitious target for renewable energy. It has also bankrolled Scottish Ministers in their argument that investment and expansion of onshore wind was an essential precondition for development in offshore wind.

Nor can the First Minister have meant the Contracts for Difference (CfD)​ subsidy scheme, introduced l​ast year ​as part of the UK’s electricity market reform to promote competition and hence lower electricity costs among renewable energy providers. The first auction earlier this year ​awarded c​ontract​s to 10 Scottish onshore wind farms and only 5 in the rest of the UK​, and to one offshore project in Scotland and the rest of the UK respectively.​

Nor presumably did the First Minister mean the Renewable Energy Investment Fund. The Scottish Government ​​launched it in 2012 with £103 million,​ all of which came from Westminster​ as a one-off grant from the UK Fossil Fuel Levy for the purpose of supporting greater investment in Scotland’s renewable sector.

So what did the First Minister mean by lack of support for Scotland’s offshore wind ambitions? Perhaps she misunderstood the Conservative’s recently announced “cut” to onshore wind subsidy​.

This merely closes the RO scheme one year early in favour of CfDs and is the result of the UK, and Scotland, meeting their targets for renewable energy ahead of schedule. It does not discriminate against Scotland and no offshore projects are affected.

If the First Minister really wants to understand why Samsung is pulling out of Methil and Scotland’s offshore wind industry still hasn’t got off the ground, she ​needs to let go of her kneejerk responses that Westminster is to blame and that more public money is the answer. ​

The Scottish Government has already funnelled over £5 million of Scottish taxpayers’ money into the Methil turbine.

“White elephant” doesn’t begin to describe something that has barely turned since its erection, and that is in a location on the Methil beach which cannot begin to replicate the technological challenges of being 10 miles out in the North Sea.​ Samsung is walking away from something it got for free.

The on-going discussions between Samsung, Scottish Enterprise and Offshore Renewable Energy Catapult (OREC) have been welcomed by Fife Council’s Lesley Laird because, quoting the OREC spin, “it would provide UK industry and academia with unrivalled opportunity to develop a deeper understanding of operations and maintenance of offshore wind turbines and thus drive down the cost of delivering clean energy from offshore wind”.

Few politicians can resist, at least in the short term, running with industry spin promising thousands of jobs and billions of investment. But they would do a better job for deprived communities if they got off the merry-go-round of pumping ever more public money into lost causes, whether the money comes from Westminster or Holyrood.


Graham Lang


Scotland Against Spin

(Email address and tel no. supplied)

Pixie Energy

Pixie logo Pixie Energy is an incubator and a facilitator of strategic research and project work, focusing on energy regulation, policy and markets at the local and national level. Find out more about Pixie Energy here.

Local Energy Matters: Scotland

Local Energy Matters: Scotland is a free-to-download brochure with a focus on energy tariffs in the two Scottish electricity distribution regions, as well news on local energy and low-carbon schemes.

Previous editions can be download here.

Scottish energy market overview

You can read an overview of the Scottish energy market here.

Scottish Government energy feed