The boss of the Scottish National Investment Bank is concerned that there is a lack of commercial funding for marine energy in Scotland – because the technology isn’t quite ready. This suggests rather alarmingly that he doesn’t know what his bank is for. But it would be wrong to suggest this is only his fault.
His argument is that there are gaps in the technologies and in particular in the technologies of delivering tidal energy at scale, suggesting the existing technologies are only small-scale pilots. That is true – but then that is why Common Weal created the idea of a Scottish National Investment Bank in the first place.
This points to two more important questions. First, if Scotland is really the European nation with by far the biggest stakes in marine energy, what will it take to get Scotland serious about actually overcoming and demonstrating the missing technologies?
And second – does anyone really care? If the Scottish Government doesn’t seem to get far past lip service when it comes to marine energy, the UK Government seems positively disinterested.
Let’s start with SNIB. All of the talk in and around SNIB these days is about how ‘commercial’ it is – commercial loans given on a commercial basis. When Common Weal designed SNIB as a policy we were always clear that the bank must operate commercially in that it must generate sufficient returns on its investment to be sustainable.
But that was not meant to mean ‘look at what all the other commercial lenders were doing and do the same’. We had a vision for the Bank which would have seen it making substantial investments in public rental housing, established energy technology roll-out and public infrastructure programmes.
Not only would these create reliable, guaranteed returns in line with the mission, they would then ‘prop up’ the inevitably riskier investment in industry. As things stand all but one of the loans given out so far appear to have little about them to suggest the borrowers couldn’t just have gone to their own banks. Identifying a ‘mission’ from the mission-driven bank is not easy.
SNIB should be investing over the long term to help to bridge the technology gap in the roll-out period. It is seeing what should be its purpose as a barrier to its purpose.
You are watching now as the catastrophic failure of Scotland’s relationship with wind energy replays itself in front of your eyes
But let’s not kid on we can blame this on SNIB. Since the 1990s there has been enough talk about Scotland’s marine energy potential to heat half of Scotland’s homes. Soberingly, that’s 30 years. Stop and think about the technological advances in other areas that have taken place in that time. You can’t blame SNIB for this slow progress.
What you can certainly blame is a fundamental, systemic failure to produce an industrial strategy for Scotland since devolution. Jack McConnell talked about the ‘knowledge economy’, Alex Salmond about ‘the Saudi Arabia of the north’ and Nicola Sturgeon about being ‘world leader in, well, take your pick…
Some money has been thrown around in each case, but seemingly at random (or for PR purposes). A project is funded but then seems to exist without a wider strategy. Nothing is scaled up, supply chains and the wider ecosystem aren’t developed, no-one seems to have responsibility.
For at least the last decade economic development (building up and supporting industry) has been treated as a minor subset of Finance (managing the accounting practices of government and allocating a block grant). This is policy illiteracy on the part of those involved. Nothing grows in a barren environment and Scotland’s industrial policy is a barren environment.
As for the UK – well, as George Kerevan explains, it is swept up in a dash for nuclear and that is so expensive it detracts from simple and sensible measures like making it much easier for off-shore energy to link to the grid. But it’s the UK Government; what does anyone expect?
Common Weal’s solution was to develop off-shore tidal and hydrogen fuel development in parallel – you don’t need a grid connection or UK Government support to use the electricity from tidal power locally.
Drop the subsea turbines, locate an oil-rig-style electrolysis plant on top (you can even use an old oil rig), convert the electricity intro hydrogen, load it in hydrogen tankers (you could always build them at Ferguson Marine) and start actively developing Scotland’s position as a hydrogen exporter (you could even use Scottish Enterprise to do that if you wanted). All this was what Common Weal wanted a National Energy Company for.
Scottish Government is perpetually on the look-out for any corporation which will promise to fix its problems in exchange for whatever the corporation wants
Instead the Scottish Government and its agents binned the National Energy Company, is stumped by marine energy other than some modest grants here and there, is working with the oil industry to subvert the developing Green Hydrogen industry, is throwing money in a strategically inept way at Fergusons for the purpose of managing political embarrassment and is happy to let Scottish Enterprise get on with doing whatever the hell it is Scottish Enterprise always does.
What is so painful about all of this is that you are watching now as the catastrophic failure (the only possible way to describe it) of Scotland’s relationship with wind energy replays itself in front of your eyes. Our wind energy is badly maintained, almost all foreign-owned and has generated a risible number of jobs. We’re about to cause precisely the same outcome with marine energy.
Why? Why is all this happening? The answer is as simple as it could possibly be – it’s pure ideology. As Lesley Riddoch makes abundantly clear here, the UK’s obsession with corporations and privatisation drives everything. It is an ideology so deeply ingrained in public thinking it has become utterly invisible to its adherents.
What the head of SNIB is really saying is ‘if an existing mega-corporation would turn up with completed technologies and take all this damned marine energy off our hands we’d pay them handsomely to do it – but we can’t find one so that’s that’.
That’s what this statement means and the Scottish Government concurs completely because the Scottish Government is perpetually on the look-out for any corporation which will promise to fix its problems in exchange for whatever the corporation wants. Care homes, nursery provision, energy, infrastructure investment, IT systems, decarbonisation – take your pick, every fantasy can be yours with a PLC on board.
And yet the truth is that with something like marine energy or hydrogen fuel production you learn a lot about how to do it while you’re actually doing it – a process of engineering producing real-world data which helps refine and improve your engineering. That is how technologies progress.
Scotland’s history in engineering excellence should make us ideally placed to get on and do it, but we don’t do things in Scotland, we send out press releases about doing things. That is the true legacy of a nation whose public policy is now built on big finance, outsourcing and bullshitting.