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Publication - Independent report

Scenario mapping for offshore renewable energy development economic benefits: case studies

Published
3 November 2022
From
Director-General Net Zero, +2 more … Director of Energy and Climate Change, Director of Marine
Directorate
Marine Directorate, +1 more … Energy and Climate Change Directorate
Part of
Building, planning and design, Business, industry and innovation, Communities and third sector, +5 more … Economy, Energy, Environment and climate change, Marine and fisheries, Work and skills
ISBN
9781804357491

Report to identify, measure and value the delivered and potential economic impact for Scotland from offshore wind and tidal energy projects.

View supporting documents Supporting documents

6. What-if analysis

For the what-if analysis we modelled what could have been delivered in terms of economic impacts in Scotland from similar projects to the case study projects delivered on the same timescale, if they had used the maximum realistic content from Scottish supply chain. We used the supply chain assessment in section 4 to consider whether the Scottish supply chain had the potential to secure a greater proportion of business from the wind farms, therefore establishing the maximum realistic content.

6.1. Beatrice Offshore Wind Farm

The key differences between the as-is analysis and the what-if analysis includes:

  • An increased use of Scottish suppliers for the development and project management phase
  • Part of the tower order placed in Scotland, and
  • A higher Scottish content in OMS.

Scottish content

We concluded that Beatrice could have achieved 39.2% Scottish content and 12.3% local content (see Table 9 and Figure 54). This compares with 29.6% and 11.7% respectively for the as-is analysis.

The areas with highest percentage Scottish content would be project development and management, where 86.5% of the could come from Scotland. This area is closely followed by OMS which has could have an average Scottish content of 56%, due to its utilisation of Scottish based technicians and operational staff.

Figure 54. ‘What-if’ Scottish and local content in Beatrice Offshore Wind Farm by supply chain category.
Figure 54. A pie chart showing a ‘what if’ analysis of Scottish and local content in Beatrice Offshore Wind Farm by supply chain category. The pie chart shows that the overall Scottish content for the project was 39.2% and that 12.3% was local content with the remainder being non-Scottish.
Table 9 ‘What-if’ Scottish and local content in Beatrice Offshore Wind Farm by supply chain category.
Level 1 category % of total Territory % of category % of total Territory % of category % of total
Development and project management 6.4% Scotland 86.5% 5.5% Local 1.2% 0.1%
Non-Scotland 13.5% 0.9% Rest of Scotland 85.3% 5.5%
Turbine supply 16.8% Scotland 3.5% 0.6% Local 0% 0%
Non-Scotland 96.6% 16.2% Rest of Scotland 3.5% 0.6%
Balance of plant 14.6% Scotland 13.8% 2% Local 4.4% 0.6%
Non-Scotland 86.2% 12.5% Rest of Scotland 9.3% 1.4%
Installation and commissioning 13.4% Scotland 26.2% 3.5% Local 12.7% 1.7%
Non-Scotland 73.8% 9.9% Rest of Scotland 13.4% 1.8%
Operation, maintenance and service 45.5% Scotland 56% 25.5% Local 21% 9.5%
Non-Scotland 44% 20% Rest of Scotland 35% 15.9%
Decommissioning 3.4% Scotland 60% 2.1% Local 10% 0.3%
Non-Scotland 40% 1.4% Rest of Scotland 50% 1.7%
Total 100.0% Scotland 39.2% 39.2% Local 12.3% 12.3%
Non-Scotland 60.8% 60.8% Rest of Scotland 26.8% 26.8%

GVA, earnings and employment

Table 10 summarises the economic impacts that could have been created by Beatrice Offshore Wind Farm.

Gross value-added

Beatrice could have generated £1,716 million direct, indirect and induced GVA in Scotland over the lifetime of the wind farm (£416 million more than as-is analysis), of which £465 million could have been generated locally (£21 million more than as-is analysis). GVA would peak during the construction and installation phase at around £217 million (£42 million more than as-is analysis) in 2018 (see Figure 55).

Over the lifetime OMS could generate the greatest amount of GVA at £1,100 million (£250 million more than as-is analysis), comprising 22% direct, 61% indirect and 17% induced GVA (see Figure 56). OMS could create £360 million locally.

Table 10 Summary of ‘what-if’ direct, Indirect and induced economic impact generated by Beatrice Offshore Wind Farm.
Scotland Local
Impact Direct Indirect Induced Total Direct Indirect Induced Total
Value-added (millions) £546 £861 £309 £1,716 £309 £133 £23 £465
Earnings (millions) £333 £242 £92 £667 £190 £37 £7 £243
FTE years 6,260 7,130 2,420 15,810 3,970 1,090 230 5,290
Figure 55. ‘What-if’ gross-value added generated in Scotland by Beatrice Offshore Wind Farm by supply chain category.
Figure 55. A graph showing the ‘what if’ gross-value added generated in Scotland by Beatrice Offshore wind farm split by supply chain area from 2013 to 2045 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from £0 to £250m. As described in table 10.
Figure 56. ‘What-if’ gross-value added generated in Scotland by Beatrice Offshore Wind Farm by direct, indirect and induced impact.
Figure 56. A graph showing the ‘what if’ gross-value added generated in Scotland by Beatrice Offshore wind farm split by direct, indirect and induced from 2013 to 2045 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from £0 to £250m. As described in table 10.

Employment

Over the lifetime of the project 15,810 FTEs, could have been created (4,190 more than the as-is analysis), of which 5,290 locally. The number of FTEs created each year between 2013 and 2043, broken down by supply chain, is shown in Figure 57.

FTEs peak in the construction and installation phase in 2017, when 2,270 FTEs could be created (470 more than the as-is analysis). This comprises 57% direct, 25% indirect and 18% induced FTEs (see Figure 58). OMS could create 10,000 FTEs over the lifetime of project (2,600 more than the as-is analysis), and this includes the permanent local work force, developer back office functions and periodic work on the project. 4,090 of these OMS jobs would be local (20 more than the as-is analysis).

Indirect FTE years, FTEs created below tier 1 contracting level, would make the largest contribution to the total.

Figure 57. ‘What-if’ employment created in Scotland by Beatrice Offshore Wind Farm by supply chain category.
Figure 57. A graph showing the ‘what if’ full-time equivalent years employment created in Scotland by Beatrice Offshore Wind Farm by supply chain area from 2013 to 2044 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from 0 to 1500 FTEs. As described in table 10.
Figure 58. ‘What-if’ employment created in Scotland by Beatrice Offshore Wind Farm by direct, indirect and induced impact.
Figure 58. A graph showing the ‘what if’ full-time equivalent years employment created in Scotland by Beatrice Offshore Wind Farm by direct, indirect and induced impact from 2013 to 2044 showing a rise in gross value increasing in 2017 to 2019 and then falling in 2020. The values range from 0 to 1500 FTEs. As described in table 10.

6.2 Neart Na Gaoithe Offshore Wind farm

The key differences between the as-is analysis and the what-if analysis includes:

  • An increased use of Scottish suppliers for the development and project management phase
  • Part of the tower work pack being contracted in Scotland
  • A small portion of the offshore substation work using Scottish suppliers, and
  • A higher Scottish content in OMS.

Scottish content

NNG could have achieved 38.2% Scottish content and 11.9% local content (see Figure 59 and Table 11). This compares with 29.3% and 11.9% respectively for the as-is analysis.

The areas with highest percentage Scottish content would be project development and management with 66.4%. This area would be closely followed by OMS which would have a Scottish content of 54%, due to its use of Scottish based technicians and operational staff. OMS also provide the highest local content, at 21%.

Figure 59. ‘What-if’ Scottish and local content in Neart Na Gaoithe Offshore Wind Farm by supply chain category.
Figure 59. A pie chart showing the ‘what if’ analysis of Scottish and local content in Neart Na Gaoithe Offshore Wind Farm by supply chain category. The pie chart shows that the overall Scottish content for the project was 38.2% and that 11.9% was local content with the remainder being non-Scottish.
Table 11 ‘What-if’ Scottish content in Neart Na Gaoithe Offshore Wind Farm by supply chain category.
Level 1 category % of total Territory % of category % of total Territory % of category % of total
Development and project management 6.3% Scotland 66.4% 4.2% Local 0.2% 0%
Non-Scotland 33.6% 2.1% Rest of Scotland 66.2% 4.2%
Turbine supply 12.3% Scotland 3.5% 0.4% Local 0% 0%
Non-Scotland 96.6% 11.9% Rest of Scotland 3.5% 0.4%
Balance of plant 14.6% Scotland 13.8% 2% Local 1.6% 0.2%
Non-Scotland 86.2% 12.5% Rest of Scotland 12.1% 1.8%
Installation and commissioning 13.4% Scotland 26.2% 3.5% Local 12.7% 1.7%
Non-Scotland 73.8% 9.9% Rest of Scotland 13.4% 1.8%
Operation, maintenance and service 45.5% Scotland 54% 24.6% Local 21% 9.5%
Non-Scotland 46% 20.9% Rest of Scotland 33.0% 15%
Decommissioning 3.4% Scotland 60% 2.1% Local 10% 0.3%
Non-Scotland 40% 1.4% Rest of Scotland 50% 1.7%
Total 100.0% Scotland 38.2% 38.2% Local 11.9% 11.9%
Non-Scotland 61.8% 61.8% Rest of Scotland 26.4% 26.4%

GVA, earnings and employment

Table 12 summarises the economic impacts that could have been created by NNG.

Gross value-added

NNG could have generated £1,277 million direct, indirect and induced GVA in Scotland over the lifetime of the wind farm (£297 million more than as-is analysis), of which £342 million would be local. GVA would peak during the construction and installation phase at around £165 million (£45 million more than as-is analysis) in 2021 (see Figure 60).

Over the lifetime OMS could generate the greatest amount of GVA at £810 million (£140 million more than as-is analysis), comprising 22% direct, 61% indirect and 17% induced GVA (see Figure 61). OMS could create £275 million locally.

Table 12 Summary of ‘what-if’ direct, Indirect and induced economic impact generated by Neart Na Gaoithe Offshore Wind Farm.
Scotland Local
Impact Direct Indirect Induced Total Direct Indirect Induced Total
Value-added (millions) £407 £640 £230 £1,277 £236 £89 £17 £342
Earnings (millions) £248 £180 £69 £497 £145 £24 £5 £174
FTE years 4,660 5,305 1,805 11,770 3,030 710 170 3,910
Figure 60. ‘What-if’ gross-value added generated in Scotland by Neart Na Gaoithe Offshore Wind Farm by supply chain category.
Figure 60. A graph showing the ‘what if’ gross-value added generated in Scotland Neart Na Gaoithe Offshore Wind Farm split by supply chain area from 2013 to 2048 showing a rise in gross value increasing in 2020 to 2022 and then falling in 2023. The values range from £0 to £200m. As described in table 11.
Figure 61. ‘What-if’ gross-value added generated in Scotland by Neart Na Gaoithe Offshore Wind Farm by direct, indirect and induced impact.
Figure 61. A graph showing the ‘what if’ gross-value added generated in Scotland by Neart Na Gaoithe Offshore Wind Farm split by direct, indirect and induced from 2013 to 2048 showing a rise in gross value increasing in 2020 to 2022 and then falling in 2023. The values range from £0 to £200m. As described in table 11.

Employment

Over the lifetime of the project 11,770 FTEs could have been created (2,730 more than the as-is analysis) of which 3,910 would be local. The number of FTEs created each year between 2016 and 2048, broken down by supply chain, is shown in Figure 62.

FTEs peak in the construction and installation phase in 2021, when 1,730 FTEs could be created (460 more than the as-is analysis). This comprises 57% direct, 25% indirect and 18% induced FTEs (see Figure 63).

OMS could create 7,350 FTEs over the lifetime of project (1,250 more than the as-is analysis), of which 3,110 would be local. This includes the permanent local work force, developer back office functions and periodic work on the project.

Figure 62. ‘What-if’ employment created in Scotland by Neart Na Gaoithe Offshore Wind Farm by supply chain category.
Figure 62. A graph showing the ‘what if’ full-time equivalent years employment created in Scotland by Neart Na Gaoithe Offshore Wind Farm by supply chain area showing a rise in gross value increasing in 2020 to 2022 and then falling in 2023. The values range from 0 to 2000 FTE. As described in table 11.
Figure 63. ‘What-if’ employment created in Scotland by Neart Na Gaoithe Offshore Wind Farm by direct, indirect and induced impact.
Figure 63. A graph showing the ‘what if’ gross-value added generated in Scotland by Neart Na Gaoithe Offshore Wind Farm split by direct, indirect and induced from 2013 to 2048 showing a rise in gross value increasing in 2020 to 2022 and then falling in 2023. The values range from 0 to 2000 FTE. As described in table 11.

6.3. Hywind Scotland

The key differences between the as-is analysis and the what-if analysis includes:

  • A higher Scottish content in the development and project management phase
  • Part of the tower order being placed in Scotland
  • Using Scottish supply chain for the installation of foundations and turbines, and
  • A higher Scottish content in OMS.

Scottish content

We conclude that Hywind Scotland could have achieved 44.4% Scottish content and 17.3% local content (see Figure 64 and Table 13). This compares with 19.9% and 9% respectively for the as-is analysis.

The areas with highest percentage Scottish content are development and project management with 77.5%.

This area is closely followed by installation and commissioning with 60.5%, due to its utilisation of Scottish based technicians and operational staff.

Figure 64. ‘What-if’ Scottish and local content in Hywind Scotland by supply chain category.
Figure 64. A pie chart showing the ‘what if’ analysis of Scottish and local content in Hywind Scotland Offshore Wind Farm by supply chain category. The pie chart shows that the overall Scottish content for the project was 44.4% and that 17.3% was local content with the remainder being non-Scottish.
Table 13 ‘What-if’ Scottish content in Hywind Scotland by supply chain category.
Level 1 category % of total Territory % of category % of total Territory % of category % of total
Development and project management 11.1% Scotland 77.5% 8.6% Local 0% 0%
Non-Scotland 22.5% 2.5% Rest of Scotland 77.5% 8.6%
Turbine supply 15% Scotland 6.5% 1% Local 0% 0%
Non-Scotland 93.5% 14% Rest of Scotland 6.5% 1%
Balance of plant 21% Scotland 18.3% 3.9% Local 0.9% 0.2%
Non-Scotland 81.7% 17.2% Rest of Scotland 17.4% 3.7%
Installation and commissioning 17.6% Scotland 60.5% 10.6% Local 59% 10.4%
Non-Scotland 39.5% 6.9% Rest of Scotland 1.4% 0.3%
Operation, maintenance and service 31% Scotland 57.1% 17.7% Local 20.2% 6.3%
Non-Scotland 42.9% 13.3% Rest of Scotland 36.9% 11.4%
Decommissioning 4.4% Scotland 60.0% 2.6% Local 10% 0.4%
Non-Scotland 40% 1.8% Rest of Scotland 50% 2.2%
Total 100% Scotland 44.4% 44.4% Local 17.3% 17.3%
Non-Scotland 55.6% 55.6% Rest of Scotland 27.1% 27.1%

GVA, earnings and employment

Table 14 summarises the economic impacts that could have been created by Hywind Scotland.

Gross value-added

Hywind Scotland could have generated £171 million direct, indirect and induced GVA in Scotland over the lifetime of the wind farm (£103 million more than as-is analysis), of which £59 million would be local. GVA would peak during the construction and installation phase at around £39 million (£26 million more than as-is analysis) (see Figure 65).

Over the lifetime OMS could generate the greatest amount of GVA at £69 million (£28 million more than as-is analysis), comprising 20% direct, 63% indirect and 17% induced GVA (see Figure 66). OMS could create £22 million locally (£5 million more than as-is analysis).

Table 14 Summary of ‘what-if’ direct, Indirect and induced economic impact generated by Hywind Scotland.
Scotland Local
Impact Direct Indirect Induced Total Direct Indirect Induced Total
Value-added (millions) £63 £76 £32 £171 £18 £38 £3 £59
Earnings (millions) £39 £22 £10 £71 £11 £12 £0.5 £23.5
FTE years 700 660 265 1,625 225 350 25 600
Figure 65. ‘What-if’ gross-value added generated in Scotland by Hywind Scotland by supply chain category.
Figure 65. A graph showing the ‘what if’ gross-value added generated in Hywind Scotland Offshore Wind Farm split by supply chain area from 2013 to 2038 showing a rise in gross value increasing in 2015 to 2017 and then falling in 2019. The values range from £0 to £50m. As described in table 13.
Figure 66. ‘What-if’ gross-value added generated in Scotland by Hywind Scotland by direct, indirect and induced impact.
Figure 66. A graph showing the ‘what if’ gross-value added generated by Hywind Scotland Offshore Wind Farm split by direct, indirect and induced from 2013 to 2038 showing a rise in gross value increasing in 2015 to 2017 and then falling in 2019. The values range from £0 to £50m. As described in table 13.

Employment

Over the lifetime of the project 1,625 FTEs, could have been created in Scotland (935 more than the as-is analysis), of which 600 locally (305 more than the as-is analysis). The number of FTEs created each year between 2013 and 2038, broken down by supply chain, is shown in Figure 67).

FTEs peak in the construction and installation phase in 2016, when 405 FTEs could be created (253 more than the as-is analysis). This comprises 57% direct, 25% indirect and 18% induced FTEs (see Figure 68).

OMS could create 620 FTEs over the lifetime of project (245 more than the as-is analysis), and this includes the permanent local work force, developer back office functions and periodic work on the project. Of these, 240 would be local.

Figure 67. ‘What-if’ employment created in Scotland by Hywind Scotland by supply chain category.
Figure 67. A graph showing the ‘what if’ full-time equivalent years employment created by Hywind Scotland Offshore Wind Farm by supply chain area from 2013 to 2038 showing a rise in gross value increasing in 2015 to 2017 and then falling in 2019. The values range from 0 to 500 FTEs. As described in table 13.
Figure 68. ‘What-if’ employment created in Scotland by Hywind Scotland by direct, indirect and induced impact.
Figure 68. A graph showing the ‘what if’ gross-value added generated by Hywind Scotland Offshore Wind Farm split by direct, indirect and induced from 2013 to 2038 showing a rise in gross value increasing in 2015 to 2017 and then falling in 2019. The values range from 0 to 500 FTEs. As described in table 13.

6.4. MeyGen Phase 1A

The key additional Scottish supply for the what-if analysis are:

  • Higher Scottish content in the development and project management phase
  • A small part of the turbine rotor and nacelle assembly work being contracted in Scotland, and
  • A higher Scottish content in OMS.

Scottish content

We conclude that MeyGen could have achieved 51.3% Scottish content and 15.1% local content (see Figure 69 and Table 15Table 13). This compares with 40% and 14.5% respectively for the as-is analysis.

The areas with highest percentage Scottish content are development and project management with 87.7%. This area is followed by installation and commissioning which has an average Scottish content of 60.7%, due to its utilisation of Scottish based technicians and operational staff.

Figure 69. ‘What-if’ Scottish and local content in Meygen Phase 1A by supply chain category.
Figure 69. A pie chart showing the ‘what if’ analysis of Scottish and local content in MeyGen Phase 1 by supply chain category. The pie chart shows that the overall Scottish content for the project was 51.3% and that 15.1% was local content with the remainder being non-Scottish. As described in table 3.
Table 15 ‘What-if’ Scottish content in Meygen Phase 1A by supply chain category.
Level 1 category % of total Territory % of category % of total Territory % of category % of total
Development and project management 5.7% Scotland 87.7% 5% Local 1.9% 0.1%
Non-Scotland 12.3% 0.7% Rest of Scotland 85.8% 4.9%
Turbine supply 21.1% Scotland 16.8% 3.5% Local 0% 0%
Non-Scotland 83.2% 17.6% Rest of Scotland 16.8% 3.5%
Balance of plant 11.2% Scotland 55.9% 6.3% Local 2.1% 0.2%
Non-Scotland 44.1% 4.9% Rest of Scotland 53.9% 6%
Installation and commissioning 20.8% Scotland 60.7% 12.6% Local 33.8% 7%
Non-Scotland 39.3% 8.2% Rest of Scotland 26.9% 5.6%
Operation, maintenance and service 27.7% Scotland 57.1% 15.8% Local 23% 6.4%
Non-Scotland 42.9% 11.9% Rest of Scotland 34.1% 9.4%
Decommissioning 13.5% Scotland 60% 8.1% Local 10% 1.4%
Non-Scotland 40% 5.4% Rest of Scotland 50% 6.8%
Total 100.0% Scotland 51.3% 51.3% Local 15.1% 15.1%
Non-Scotland 48.7% 48.7% Rest of Scotland 36.3% 36.3%

GVA, earnings and employment

Table 16 summarises the economic impacts that could have been created by MeyGen.

Gross value-added

Meygen Phase 1A could have generated £54 million direct, indirect and induced GVA in Scotland over the lifetime of the project (£13 million more than as-is analysis) of which £13.5 million would be local. GVA would peak during the construction and installation phase in 2016, at around £14 million (£3 million more than as-is analysis) (see Figure 70).

Over the lifetime OMS could generate the greatest amount of GVA at £17 million (£4 million more than as-is analysis)., comprising 42% direct, 39% indirect and 19% induced GVA (see Figure 71). OMS could generate £6 million locally.

Table 16 Summary of ‘what-if’ direct, Indirect and induced economic impact generated by MeyGen Phase 1A.
Scotland Local
Impact Direct Indirect Induced Total Direct Indirect Induced Total
Value-added (millions) £22 £21 £11 £54 £6 £7 £0.5 £13.5
Earnings (millions) £19 £10 £5 £34 £4 £4 £0.5 £8.5
FTE years 505 295 170 970 140 110 10 260
Figure 70. ‘What-if’ gross-value added generated in Scotland by MeyGen Phase 1A by supply chain category.
Figure 70. A graph showing the ‘what if’ gross-value added generated in MeyGen Phase split by supply chain area from 2013 to 2043 showing a rise in gross value increasing in 2015 to 2017 and then falling in 2018. The values range from £0 to £15m. As described in table 16.
Figure 71. ‘What-if’ gross-value added generated in Scotland by MeyGen Phase 1A by direct, indirect and induced impact
Figure 71. A graph showing the ‘what if’ gross-value added generated by MeyGen Phase split by direct, indirect and induced from 2013 to 2043 showing a rise in gross value increasing in 2015 to 2017 and then falling in 2018. The values range from £0 to £15m. As described in table 16.

Employment

Over the lifetime of the project 970 FTEs, could have been created (450 more than the as-is analysis) in Scotland. Locally, 260 FTEs would be created (85 more than the as-is analysis). The number of FTEs created each year between 2013 and 2043, broken down by supply chain, is shown in Figure 72).

FTEs peak in the construction and installation phase in 2016, when 250 FTEs could be created (120 more than the as-is analysis). This comprises 50% direct, 32% indirect and 18% induced FTEs (see Figure 73).

OMS could create 320 FTEs over the lifetime of project (140 more than the as-is analysis), and this includes the permanent local work force, developer back office functions and periodic work on the project. 115 of those FTE years would be local.

Indirect FTE years, FTEs created below tier 1 contracting level, would make the largest contribution to the total.

Figure 72. ‘What-if’ employment created in Scotland by MeyGen Phase 1A by supply chain category.
Figure 72. A graph showing the ‘what if’ full-time equivalent years employment created by MeyGen Phase by supply chain area from 2013 to 2043 showing a rise in gross value increasing in 2016 to 2017 and then falling in 2018. The values range from 0 to 300 FTEs. As described in table 16.
Figure 73. ‘What-if’ employment created in Scotland by MeyGen Phase 1A by direct, indirect and induced impact.
Figure 73. A graph showing the ‘what if’ gross-value added generated by MeyGen Phase split by direct, indirect and induced from 2013 to 2043 showing a rise in gross value increasing in 2016 to 2017 and then falling in 2018. The values range from 0 to 300 FTEs. As described in table 16.

Contact

Email: ScotMER@gov.scot

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