Chamber and committees

The Scottish cluster has that work in hand. We have also done our own work, and I can pass on further information around the industrial emitters that we are aware of and the work that needs to be done in order to see that decarbonisation happen. I am happy to provide that to the committee.

I am happy to give a brief response to that. First of all, without referencing any particular project, the central importance that the traditional oil and gas companies will play in securing our energy transition is clear. I have already stated that we cannot make that just transition happen without private capital, and a large amount of that private capital will come from energy companies that have traditionally been involved in oil and gas. We are also going to need the skills and expertise of people who have been working in oil and gas—and that volume of people—in order to transition to renewable energy.

I absolutely welcome and value the work that those workers have contributed to date and I appreciate the on-going investment by traditional oil and gas companies in new energy technologies. I encourage them, as the First Minister and I did at an Offshore Energies UK round-table meeting last Monday, to move faster and to show where they are making those investments so that that is demonstrated.

There are various on-going projects by traditional energy companies, in oil and gas and in renewable energy, that demonstrate that the just transition is happening, and the movement of workers from the oil and gas industry into renewables demonstrates that, too. I am keen to see it happen quicker—as quickly as possible—and I will work with anybody who can help us realise that goal.

So, £42.5 million has been set aside for this financial year.

Yes. The first consideration of whether we can legally come forward with a direct award will be considered as part of the procurement process. On the second element of whether we can invest in making the yard more productive, those conversations are on-going with the yard, to ensure that its business plan passes the first hurdle of the legal test—the commercial operator test around whether we would pass subsidy control rules. Then, it is about whether it is the right investment to make and whether we would want to do that; if so, we would find the finance to come forward to do that.

I and the Government remain committed to Ferguson Marine and to delivering Glen Sannox and Glen Rosa in as speedy a time as possible, because we have island communities who are in desperate need of those vessels coming on stream.

We also remain committed to doing everything that we can to ensure the future of commercial shipbuilding on the Clyde, which Ferguson Marine will be central to.

Good morning, colleagues. As you will be aware, the Scottish Government is committed to a just transition by 2045. We are undertaking the necessary steps to reach that goal within the context of the recent budget, which, as the Deputy First Minister has said, is challenging in many respects. However, there are also many opportunities before us that we are looking to secure.

The projected economic benefits from Scotland’s offshore wind are substantial. The First Minister’s investor panel highlighted the sector as the single most important opportunity for attracting capital to Scotland and raising Scotland’s wider investment profile. It is possible that we could achieve the supply chain development statement’s forecast of £25 billion of investment across the Scottish supply chain through ScotWind projects alone. Our strategic investment in offshore wind will stimulate and support private investment in the infrastructure and manufacturing facilities that are critical to sectoral and wider economic growth. It will also support market certainty and help to create a highly productive and competitive economy, which will provide thousands of new jobs, embedding innovation and boosting skills.

Carbon capture and storage will play a critical role in supporting a just transition to net zero. Given our unrivalled access to vast storage potential in the North Sea and opportunities for us to repurpose existing oil and gas infrastructure and related skills and expertise, we have an economic opportunity to be at the centre of a European hub for carbon capture and storage technology.

Our “Hydrogen Action Plan” sets out our commitment to support Scotland to become a leading hydrogen nation. We continue to engage actively with the sector and supply chain companies, and we will work closely with the UK Government on the necessary policy and regulations. We will also continue to support hydrogen innovation through our hydrogen innovation scheme and the work on establishing the case for pipeline transportation of hydrogen from Scotland to Europe.

We have been consistently clear that securing a long-term, sustainable future for the Grangemouth industrial cluster is also of critical importance. We have committed to publishing a draft of the Grangemouth just transition plan this spring and have been working with the industry, the community and the public sector on that.

The energy transition fund supports the north-east of Scotland’s just transition away from reliance on oil and gas to renewables, and it supports four main projects: the energy transition zone, the Aberdeen hydrogen hub, net zero technology, the transition programme and the global underwater hub. The budget means that we will continue to support those projects.

Like the Deputy First Minister, I welcome the opportunity to meet the committee to discuss my area of responsibility within the budget before us in more detail.

Obviously, fields will move at different paces and will come into the process at different points. There are a number of projects in the leasing round. They have to go through the process of having their grid positions allocated and they must go through the consenting regime. It is therefore difficult to pinpoint an exact timescale, particularly given that each one will move at a different pace, not least because some will be floating and some will be fixed sea-bottom developments.

However, we are certainly hoping that projects will happen as quickly as possible. We are allocating funding for supply chain development so that we can see things moving. We see some of it happening: the progress that has been made with Sumitomo Electric Industries is a public example, but there are many other examples. There are discussions that are commercially confidential at this stage, but we hope that we will also be able to bring forward other projects in this year.

It would come from the Scottish budget somewhere, but we are dealing with hypotheticals based on a business plan coming forward and assessing whether that passes the subsidy control test and whether we think that that is prudent expenditure. We have to make sure that we get over those hurdles; at this stage, those are hypotheticals.

Yes—that is correct.

Absolutely.

Mr Macpherson has hit on a critical area of decision making that will come down the tracks this year. I am very pleased that the strike price that the UK Government has set answers the industry’s concerns. AR5 was a missed opportunity, particularly for offshore wind. We, along with the industry, impressed on the UK Government the need to ensure that it got the strike price right. I think that we have agreement that the UK Government has taken that issue very seriously and has responded accordingly, which I am very pleased about. I put on record once again that the UK Government has taken that approach.

The next challenge, as Mr Macpherson has set out, is the overall quantum that will be available in AR6. If we are to make up for what happened in AR5, it will be important for the quantum to be sufficient to allow progress to be made, particularly for ScotWind but also for some of the other technologies that we saw in AR5 as a result of offshore wind not being there. Those include marine energy projects, such as the wave and tidal energy projects that we will see coming through for the first time.

There is another element. There will be a difficult balancing act, because we must ensure that we are balancing the different interests fairly. We must ensure that we get a good price, while also encouraging the economic opportunity that comes from developing the supply chain, which means that non-price factors are part of the consideration of AR6. I hope to see continued engagement by UK ministers both with me and Gillian Martin, the energy minister, and at official level. We have a massive opportunity. From the perspective of the investor panel, ScotWind is the top opportunity for inward economic investment and investment of capital, but there are also other areas of marine energy. We must grasp the opportunities that are there, to ensure demonstrable benefits for our people.