Scotland already has a genuine global lead in marine and offshore energy technologies, underlined by multi-million-pound inward investments by companies such as Gamesa, ABB, Mitsubishi Power Systems and Samsung Heavy Industries.
Over the past 18 months, these multinationals have staked hundreds of millions of pounds on building exciting new technologies with the power to harness Scotland’s extraordinary wind, wave and tidal resource. They clearly have faith not just in the resource, but in Scotland’s skills, infrastructure and political will to make a green future a reality.
This future has the potential to create thousands of new jobs. The European Union recently produced a paper on wave and tidal energy, which underlined the potential of these new sectors to provide 26,000 direct EU jobs by 2020 and 314,000 by 2050.
The missing piece of the jigsaw is finance. Offshore wind, wave and tidal energy are all highly capital-intensive and billions of pounds of investment will be required to enable planned multi-GW energy projects to go ahead.The challenge for all of us is attracting bank finance at a reasonable rate – taking into account we are talking early-stage technologies without proven track records.
This is where the Green Investment Bank (GIB) comes in. It has already been pump-primed with £103 million from Scotland’s fossil fuel levy and will have the capability to de-risk some of this early stage investment – thereby enabling new industries to leverage the considerable millions of investment their projects will attract. By having an HQ in Scotland, the GIB will gain an early understanding of this burgeoning sector’s needs.
The shame, from my perspective, is that the bank will not be open for business for the wave and tidal sectors until after 2015. At Aquamarine Power, we plan to be installing our first small wave farm by then, and we will need access to debt finance well in advance of that. I don’t want the GIB to adhere to the banker’s adage “let me be first in line to fund your second project”. I see Scotland’s wave and tidal projects as an opportunity for the GIB to dip its toe into the marine energy sector and get its feet wet.
With an Edinburgh HQ, we all have a tremendous opportunity to work closely with the new bank to help shape an exciting green energy future.
• Martin McAdam is chief executive of Aquamarine Power.