FERGUS EWING: Norway could be your way too with renewables fund
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As I write this column a report from the finance committee of the Scottish Parliament has just criticised the Scottish Government for short-term thinking and a lack of planning for the future.
Let me put forward one suggestion to respond to this criticism.
We are about to see a massive expansion in renewables and the Highlands will be at the very centre. Indeed, we should gain here in terms of jobs and opportunities though it may take several years for these to be created at scale.
But where do the main financial returns go? To the investors. A nd the taxation will go to the Exchequer. Is it not the duty of governments to make sure the people benefit from any economic bonanza?
Of course, we’ve been here before. Over the past half century, oil and gas revenues have gone to the company investors and the UK Treasury on a massive scale. Over the same time span, our neighbours in Norway have benefitted on a similar scale but they astutely chose to invest part of the tax proceeds from their oil and gas developments in a Sovereign Wealth Fund.
I remember the day that I visited Norway as Scottish energy minister when. by sheer chance, each Norwegian citizen became a Kroner millionaire. Their fund now provides financial security for Norway on an enormous scale. It is said to own about one per cent of the shares in companies in the whole world.
Now we are on the cusp of a second energy opportunity, this time from renewables. It is surely essential that a fund be set up and that part of the proceeds are invested for the future in it.
There could be separate funds for Scotland and the UK – England has many wind farms too.
At the same time, I have on the Holyrood Petitions Committee urged the Scottish Government to enable community ownership of at least part of new wind farms approved.
This was happening on a small scale when I was minister but came to an abrupt halt when the UK government axed support for renewables by scrapping the ROC (renewable obligations contracts) system.
The beauty of the scheme was that the revenues from the sale of electricity generated from the farms was used to finance the initial capital costs of purchase and construction.
For, provided there is a relatively modest investment from the state of, say, 10 per cent of the cost of two turbines, perhaps from the Scottish National Investment Bank, this will lever commercial funds from bankers.
It did before and would do so again. If two turbines are funded by the community, in addition to those planned by the developer, the developer loses nothing: they will likely gain much more solid community support because the community will own a stake in the future success of the farm, not just receive community benefit paid (where it is paid at all) at £5,000 per megawatt.
The combination of a new Sovereign Wind Wealth Fund and community ownership would surely be a means of better securing our financial future for our children and grandchildren.
It’s not that hard to do.
I have already set out this argument on the Holyrood Petitions committee and am due to do so again this coming week in Holyrood, in a Members Debate on the role that landed estates play in rural Scotland.
Next week I am honoured to deliver the Memorial Lecture to Donald Dewar, at Glasgow Academy, the school he attended.
This will be the second in the lecture series; the first given by Brian Wilson, former MP and UK Business Trade and Energy Minister .
Brian gave a sympathetic and personal account of the life and works of the man who was the very first First Minister, replete with anecdotes about Donald Dewar's wit and wisdom.
I served in the First Parliament which he dominated, until his untimely death.
I hope I can do him justice.
