The Scottish Low Carbon Investment Conference

Euan McVicar is a partner and head of energy projects at McGrigors. He will lead a session looking at the significance of the supply chain in large offshore projects

Q: What will your session concentrate on?

A: It is about mobilising the supply chain effectively for low carbon offshore initiatives – not just wind but also wave and tidal as well as Carbon Capture and Storage (CCS)

Q: What comes first – the supply chain or the projects?

A: That’s the big challenge – it’s a real chicken and egg situation. How can the supply chain be marshalled to allow projects to be delivered and how can offshore projects create the demand to allow the supply chain to flourish? Both need each other to develop further. McGrigors is carrying out a survey on the attitudes of developers and supply chain companies to each other and will feed them into the session.

Q: Are we sometimes in danger of getting our priorities wrong?

A: Yes. There is a lot of focus on getting a turbine manufacturer to locate in Scotland but many people feel that’s the wrong place to start. Further down the supply chain, we can add value and create more jobs and if we give support to these areas, we will in the end attract a turbine manufacturer – and will have created lots of other jobs too.

Q: What sort of areas are we talking about?

A: Everything from jackets for offshore wind turbines – BiFab has been phenomenally successful in this area – to vessel hire and manufacture. Some engineering companies are looking at building vessels which would be necessary for transportation in the offshore wind industry. It’s also about turning prototype wind and tidal devices into commercial scale products and trying to keep that development in this country. We’re ahead of the pack in wave and tidal and need to ensure that the right parts of the supply chain are there to allow those industries to develop.

Q: What sort of potential is there in harnessing the oil and gas supply chain expertise for the renewable and low carbon economy?

A: It’s enormous – there are so many opportunities for transferrable skills from the oil industry to renewables. We have world-leading technology in CCS and that is very much tied into the expertise of the oil and gas industry. We need to do all we can to attract North Sea oil services players to look at renewables and low carbon opportunities. They are telling us they want to be involved but they need that pipeline of work to start coming through. That needs more openness and more collaboration from developers. At the moment the oil price is nice and stable and oil services companies will concentrate on their core business. They need an attractive, long-term investment opportunity to bring them into the renewables space – they need to know it can provide a good hedge.

Q: What is the biggest opportunity for Scotland in this area?

A: We built a world-leading oil services industry from Aberdeen and exported high-value parts of it around the world. There is no reason why Scotland cannot become a similar centre for expertise in renewables services and have a lasting industry here. Developing these skills within Scotland and exporting them around the world – that’s the real renewables opportunity for Scotland plc.

Q: What is the biggest challenge?

A: Without doubt, the speed of development offshore is the biggest problem – and that is linked to the difficult economic climate. We really need to know what’s happening with tings like CCS in the Strategic Spending Review – and areas like wave and tidal really need further support. The challenge is to create that support when government, industry and domestic consumers are all under financial pressure. It’s a brave decision to make that investment for future growth when money is in short supply.

Q: What are the challenges from abroad?

A: We face strong competition from continental Europe, especially Scandinavia and Germany. They are ahead of the game and more willing to bend the rules. In Germany, they decided that Bremerhaven was going to be Germany’s international renewables hub and put government money into it – they didn’t go through a massive consultation exercise like we do. We are losing out to others who have moved more quickly but we need to work with these countries and organisations to make things happen here.

Q: What do you hope the conference can achieve?

A: I think it will be an excellent forum to try to find solutions and bring people with a range of business and investment experiences together. What’s critical is that momentum continues to gather after the event. We have to keep pushing on the agenda.