Scotland’s offshore-wind sector holds immense promise. Robust wind resources, deep technical expertise from the oil and gas industry and its attractiveness for international capital underpins industry ambition. 

To deliver these ambitions requires laying the groundwork across the supply chain, de-risking business cases and obtaining clear government direction and financial support. That was the message from a recent panel discussion hosted by ICAEW, with experts including Claire Mack, Chief Executive Officer of Scottish Renewables, and Susie Lind, Managing Director of the Bluefloat-Nadara Partnership.

A legacy of delivery meets global ambition

Scotland’s targets for offshore wind (OSW) are among the most ambitious worldwide. Currently, nine operational sites generate around 4GW Gigawatts (GW) of clean energy – a strong foundation built on decades of experience in the North Sea. But the real transformation lies ahead: more than 30GW of new projects were granted seabed leases in the 2022 ScotWind leasing round, part of a wider 40GW pipeline across Scottish waters.

This pipeline has attracted global investment interest, despite the complex nature of delivering OSW projects. As Lind said: “What we are seeing globally is a narrative about the complexity of delivering OSW, but we excel at delivering infrastructure projects in Scotland due to our experience in the North Sea.”

That confidence is well placed – but ambition alone won’t build wind farms. Turning paper projects into operational assets requires securing permits, negotiating grid connections and financing billions in construction costs. That’s where the pressure now lies.

Bridging the financial gap

Securing investment is one of the most critical – and challenging – steps for any OSW project. Financial close marks the moment when contracts are signed, capital is committed and construction can begin. It is also where many promising projects risk stalling.

Panellists were open about the pressures facing developers. Recent years have seen rising inflation push up capital expenditure, interest rate hikes increase financing costs and regulatory uncertainty – including ongoing electricity market reform – undermine investor confidence.

Yet these macroeconomic conditions have also sharpened the UK’s appeal. As Riaz Karim, Senior Investment Associate at Aukera Energy, noted: “Recent macroeconomic events overseas have opened up an opportunity for the UK to cement its position as a stable, attractive destination for OSW and broader renewable energy investments.”

Institutional capital is available, particularly from long-term investors such as pension funds. But those investors need certainty – and this is where the UK’s Contract for Difference (CfD) scheme plays a pivotal role. CfDs offer fixed-price revenue across a 15-year period, giving projects the financial stability needed to secure backing.

However, the current structure may need refinement to match the evolving scale of OSW projects. Panellists highlighted the potential for improvements – such as lengthening CfD terms to align more closely with the 60-year lifespan of seabed leases.

Unlocking the supply chain

Alongside financial support, supply chains must also be ready to deliver at scale. Yet this raises a familiar dilemma: manufacturers need firm orders to invest, while developers need an established supply chain to place those orders.

One current example is the development of floating platforms, which have emerged as the technically feasible solution for sites in deeper waters further from shore. Close to two-thirds of the 2022 ScotWind leasing round was allocated to floating OSW projects. However, the commercialisation of floating OSW is still evolving. Developers face the dual challenge of working with technology innovation, while simultaneously investing in physical infrastructure to deliver projects.

Scottish Renewables’ Mack underlined the importance of proactive policy support: “The UK and Scottish governments are working tirelessly with industry to build a strategic foothold in the global OSW market.”

This effort is already bearing fruit. Recent co-investments by the National Wealth Fund and the Scottish National Investment Bank have helped unlock projects such as the redevelopment of the Port of Ardersier and XLCC’s new subsea cable factory in Ayrshire – key components of a future-proof OSW supply chain.

A live poll conducted during the ICAEW event reinforced this view. When asked what would most help accelerate OSW growth, 45% of attendees pointed to the need for clear and sustained government support to underpin private sector confidence.

The road ahead

The opportunity for the Scottish offshore-wind sector is clear: to lead in a global race for clean, secure and investable energy. The challenges – from financing to infrastructure – are real, but not insurmountable. With continued collaboration between government, investors, and industry, Scotland is well placed to turn its offshore wind potential into a cornerstone of national prosperity.