Scottish energy firms to gain from £3 billion plans
Spanish energy giant Iberdrola, the parent company of ScottishPower, is planning a massive £3 billion investment in renewable energy projects in Scotland over the next two years, it has been revealed.
Iberdrola chairman Ignacio Galan, First Minister Alex Salmond and British Ambassador to Madrid Giles Paxman are greeted by a Basque dancer.
- By Stefan Morkis
- Published in the Courier : 14.09.10
- Published online : 14.09.10 @ 08.34am
First Minister Alex Salmond visited the firm's new headquarters, under construction in the Basque city of Bilbao, for the announcement.
Describing it as a "wonderful investment," Mr Salmond said 1800 Scottish companies will directly benefit as a result.
"Scotland is hugely significant within Iberdrola's plans for the future and the commitment the company has shown to our country is immensely important," he said.
"As well as the significant contribution to the economy through contracts, the wider Iberdrola Group has recently located the UK arm of its engineering and construction business in Lanarkshire, creating 150 jobs, and taken the decision to locate the base for the global offshore renewable business in Glasgow."
He added that if connection charges were equal throughout the UK then Scotland could expect to see even greater levels of investment.
Electricity suppliers pay more for connection to the grid the further they are from the main centres of demand.
This means that Scottish generators pay 40% of the UK's total transmission costs, despite supplying just 12% of the total energy.
Scale of investment
"If we can secure that priority then the scale of investment will exceed even what we have seen today," he said.
Iberdrola chairman Ignacio Galan said his company intends to make a total investment in the UK worth £4 billion — two thirds of which is earmarked for Scotland and will be used to develop wind farms, smart grids and carbon capture programmes.
Iberdrola is the world's fourth largest energy company and employs more than 32,000 people across 40 countries.
Mr Galan said the investment would also open up trade opportunities for Scottish and Basque firms worth an estimated g5.4 billion and will "reinforce his strong commitment to Scotland."
"In this way, Iberdrola will continue to act as a driving force behind development in Scotland and the Basque country, two significant regions that are very important to our company and where we have significant plans for the future," he said.
He added that he hoped other Basque firms will follow Iberdrola's lead in establishing business links with Scotland.
ScottishPower and Iberdrola merged three years ago and £2.7 billion has been invested by the company in Scotland since then.
The firm's renewable energy division, ScottishPower Renewables, is now the country's leading wind power developer and generator while its global offshore energy division will have its headquarters in Glasgow.
The Whitelee wind farm, just south of Glasgow, is already the largest wind farm in Europe and its capacity will increase from 217MW to 539MW by 2012.
Prototype
Iberdrola has also won through to the British Government's public tender process to develop commercially a carbon capture and storage (CCS) programme at Longannet in Fife, where they are operating a CCS prototype.
Tayside and Fife are both hoping to cash in on the renewable energy boom, which could bring tens of thousands of jobs to the country in the turbine manufacturing and maintenance sectors.
Fife company Burntisland Fabrications (BiFab) has already won a £2 million contract from Norwegian tidal power developer Hammerfest Storm to construct the first of their advanced HS1000 tidal turbines in Scotland.
Mr Galan said that although investment in wave and tidal power is relatively small, the industry is in its infancy-as wind power was 15 years ago-and will grow over the coming years.
Six Scottish firms are already planning to visit Bilbao next month to take part in the third International Conference on Ocean Energy, which attracts firms operating in the wave and tidal energy fields as well as those involved in the offshore wind sector.
Interim chief executive of Scottish Development International Anne MacColl added, "Exceptional energy innovation and a supportive business environment combined with unrivalled human and natural resources in offshore, wind and tidal energy makes Scotland a world-leading location for companies operating in the renewable sector."
Mr Salmond was met by traditional Basque dancers on his arrival at Iberdrola's headquarters.
He said Scotland could learn from the area's recent economic successes, which have seen it out-perform the rest of Spain.
On his visit to Bilbao, Mr Salmond also had meetings with Spanish banks Santander and BBVA to discuss the potential for their investment in Scotland.
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