Floating wind turbine tech manufacturing base set for Scotland as deal signed with South Korea's HD Hyundai

The company sees Scotland as an ideal place for the hub

Scotland has been chosen as the location for a new European manufacturing base for floating offshore wind energy technology in a move hailed as a “vote of confidence” for the country’s burgeoning renewables sector.

The announcement comes after South Korea’s HD Hyundai Heavy Industries, the world’s biggest shipbuilder and a major player in offshore energy tech, signed a memorandum of understanding (MoU) with Scottish Government bodies at a special meeting in Edinburgh on Tuesday.

The company sees Scotland as an ideal place for the hub, due to the high anticipated demand for parts when offshore schemes commissioned under the ScotWind round of leases begin construction.

The MoU with HD Hyundai comes just days after it was revealed that China’s largest maker of wind turbines – Mingyang Smart Energy Group – is planning to set up its first European manufacturing beachhead in Scotland, in a bid to supply equipment to wind farms in the North Sea.

“Scotland is at the centre of floating offshore wind, with the world’s top floating projects,” said Hannae Choi, senior vice-president of HD Hyundai’s corporate planning division and wind energy business, who flew in to formalise the agreement. “It is also the country with the greatest growth potential, with plans to expand offshore wind capacity to 50 gigawatts by 2030.”

Once established, HD Hyundai’s Scottish base could potentially also supply projects across the UK and further afield. Deputy First Minister Shona Robison, who witnessed the MoU signing with Scottish Enterprise and Highlands & Islands Enterprise, has welcomed the plans.

She said the move would “unlock expertise” in the design and manufacture of floating offshore wind substructures, boost the economy and help Scotland achieve its climate targets.

An agreement by Hyundai to pursue opportunities for floating offshore wind power projects has been hailed as a "vote of confidence in Scotland" Photo: Ben Birchall/PA Wire

“This partnership agreement is a vote of confidence in Scotland and our offshore wind industry, demonstrating our ability to develop the international relationships upon which investment that will help us reach our climate targets is founded,” she said.

“Scotland’s offshore wind sector is key to our transition to net zero and this partnership is the next step forward in realising the economic opportunities from our floating offshore wind potential.”

Ministers have previously been criticised for selling the seabed leases “on the cheap”, despite bringing in a £700m windfall from the auction.

Ms Robison defended the ScotWind programme, insisting it had “put Scotland on the global map” and brought “a huge opportunity” for the country. She said each of the 20 successful projects is expected to bring £1.5 billion of investment and thousands of jobs.

South Korea’s HD Hyundai Heavy Industries has signed a memorandum of understanding with Scottish Government bodies that will see the international conglomerate building a new manufacturing base for floating offshore wind technology in Scotland

The HD Hyundai vice-president said it was too early to estimate how many jobs could be created through the new manufacturing facility or the overall scale of investment as plans were still in their early stages.

"We are currently exploring ways to collaborate with various partners to develop the offshore wind market, including establishing a manufacturing supply infrastructure,” Mr Choi said. “We plan to expand the market by leveraging our world-class know-how in designing and manufacturing floating structures.”

The exact timescale for the development is also uncertain, but will depend on the speed of progress of the ScotWind projects and the wider offshore wind manufacturing industry. However, the company is already in discussions with other players in the sector with regard to future partnerships

Mr Choi said: “We are working with several local partners and partnerships in Scotland, but can’t reveal any further details at this time.”

There are eight offshore wind farms operating in Scottish waters, including the world’s first floating scheme Hywind, with two more under construction and five consented. Another 20 will come online as part of the ScotWind leasing scheme, including 13 floating arrays.

Ossian, a joint venture between SSE Renewables, CIP and Marubeni, which is planned for deep waters off the Angus coast, will be the one of the largest in the world when built, with a capacity of 3.6GW. Scottish Government targets aim for 11GW of offshore wind to be installed by 2030 – enough to power more than eight million homes.

Combined, the ScotWind projects are expected to bring almost 50GW of renewable electricity to the grid in future years.

Industry leaders have also welcomed the agreement. Ossian senior project manager David Willson said: “Large-scale floating offshore wind technology will be a game-changer in the UK renewable energy sector, and a critical driving force behind the journey to net zero.

“The opportunities Ossian and other projects offer for the supply chain are immense, supporting multi-billion-pounds of investment and many thousands of jobs. It is encouraging to see yet more positive developments in the renewables supply chain and the shared optimism around the potential of Scotland’s floating wind industry.”

Emma Harrick, head of energy transition and supply chain at Scottish Renewables, said: “Scotland has a proud reputation as a global leader in clean power and this agreement is yet another example of the intense interest in this country as a renewable energy powerhouse.

“With the world’s largest floating offshore wind pipeline it is no surprise that a globally renowned business is looking to invest in our industry and establish a manufacturing base to supply foundations for wind turbines that will be deployed not just in Scotland but across the world.”

The MoU is the latest in a series of developments in Scotland’s offshore renewables sector, coming following the First Minister’s pledge to spend up to £500 million over the next five years to unlock private investment in ports, manufacturing and assembly work to anchor the country’s offshore wind supply chain.

Other recent announcements of international investment in the renewable supply chain, including the £350m Sumitomo cable factory planned for Nigg, in the Inverness and Cromarty Firth Green Freeport area.