This has been one of the most politically charged weeks for energy in some time.
Middle East tensions have pushed energy security and bills back to the top of the agenda, and in Scotland that debate was sharpened further by two developments landing side by side: Westminster blocking Ming Yang’s proposed factory at Ardersier, and Vestas setting out plans for a Scottish nacelle and hub facility.
If security services concluded that Ming Yang could not be allowed into critical infrastructure that judgement has to be respected. Though it should be noted that Chinese state oil firm CNOOC has been operating one of the largest oilfields in the UK North Sea - Buzzard - for 13 years, and Ming Yang’s European business and engineering centre is located in Hamburg serving as its primary hub for introducing its offshore wind products to the European market. For some, it might not be a question of whether Chinese wind turbines are used, but whether they are manufactured in Scotland or manufactured elsewhere.
But it does not automatically follow that the Vestas announcement fills the gap. Ming Yang’s proposal was for up to £1.5 billion of investment in Scotland, aimed at offshore and floating offshore wind, with up to 1,500 jobs in the initial phase. Vestas’s announcement is positive, but it remains a conditional plan rather than a delivered factory: the company says its final investment decision depends on securing sufficient UK-based orders in AR7 and AR8, as well as the planning process.
That distinction matters. Politically, there will be a temptation to present this as a neat swap: Chinese investment out, European manufacturing in. In reality, the picture is more complicated than that. A Vestas announcement is welcome, but it is not yet a confirmed site, not yet a final investment decision and not yet a like-for-like replacement for what Ardersier was expected to bring to the Highlands. Politicians have suggested Leith as the likely site, though that remains unconfirmed.
Vestas itself says the move follows the record AR7 auction results and growing UK demand. But when you look at Scotland’s AR7 outcome, the picture is still relatively narrow. The major Scottish award was Berwick Bank Phase B at 1.38GW, while the only Scottish floating award was the small-scale Pentland project. That is encouraging, but it is not yet a deep Scottish order book.
A bigger question for floating wind
That is why the Ming Yang decision matters beyond the immediate China argument. Its pitch was not simply about one factory or one headline number. The company’s own announcement explicitly tied the Scottish investment to offshore and floating offshore wind, and later phases were intended to expand the site for floating deployment. That matters because floating is where much of Scotland’s longer-term opportunity sits, particularly across ScotWind and INTOG.
With the loss of Ming Yang, there is a serious risk that floating projects are delayed and not built in Scotland. Ming Yang’s intent of supporting floating wind was explicit.
So, the underlying political question has not gone away. Can the UK and Scottish governments convert offshore wind ambition into local industrial value in Scotland, or will headline ambition continue to run ahead of what is actually bankable and buildable here? This week suggests the answer is still unsettled. Security constraints are real. But so too are the wider policy and market barriers that continue to sit between ambition and delivery.
That concern may become sharper, not weaker, as the next wave of opportunity develops. The Crown Estate has now signalled a new leasing round of around 6GW or more, focused largely on the north-east of England and on waters suited to fixed-bottom offshore wind. Meanwhile consenting timelines for Scottish projects continue to widen and delay. If Scotland cannot build a clearer path from project pipeline to manufacturing certainty, there is a risk more of the industrial opportunity follows that geography too.
There are other significant policy barriers in place to the delivery of Scottish wind at scale. Rapidly escalating transmission charges - the levy for build out and maintenance of the grid - continue to cost existing northern Scotland projects tens of millions of pounds per year, while southern generators next to major cities receive a payment. That puts existing projects at risk and stifles further investment. Directors of the fully-consented West of Orkney Wind Farm - the only ScotWind development to have reached that milestone - have indicated the project cannot proceed on current terms due to this issue, which the UK Government has said may not be reformed until as late as 2029.
That leaves ministers with a more difficult argument than the headlines suggest. They can, quite reasonably, say national security comes first. But they will still have to explain how Scotland turns offshore wind potential into jobs, supply chain depth and place-based economic value when one of the biggest proposed investments for the Highlands has been stopped, and the countervailing good news remains, for now, a plan rather than a factory.
The pragmatic case for the North Sea
Oil and gas was front-and-centre this week as Keir Starmer faced challenging questions from the Leader of the Opposition on the future of the Rosebank and Jackdaw projects.
The case for the North Sea is not simply about bills. It is about energy security, import dependence, jobs and industrial capability during a period when the UK still relies heavily on oil and gas. Fossil fuels still account for over 70% of UK primary energy consumption, and over 40% of the energy used in the UK is met by imports. While that remains the case, there is a pragmatic case for producing as much as we sensibly can at home: to reduce reliance on imports, retain jobs and preserve the supply chain capability that will also be needed for offshore wind, carbon capture and the wider transition.
The government itself has previously said oil and gas production in the North Sea will remain a key part of the UK energy landscape for decades as the transition unfolds.
Energy Minister Michael Shanks this week restated the decision of whether or not the windfall tax is removed before 2030 lies with the Chancellor, who confirmed her intent to do so during a No.11 meeting with industry leaders earlier this month.
The benefits of production should be viewed through the prism of economic value to the UK.The Rosebank oilfield is projected to support more than 1,600 direct jobs at the peak of construction and deliver £6.3 billion of investment across the UK economy, while Jackdaw is expected at peak to account for around 6.5% of UK Continental Shelf gas production -enough energy equivalent to heat more than 1.4 million homes.
That case also sits against an NSTA estimate of 2.9 billion boe (barrels of oil equivalent) of proven and probable reserves remaining in the UKCS at the end of 2024, with a further 6.2 billion boe in contingent resources - a reminder that the basin is mature, but not exhausted.
The long-term direction remains renewables, grid investment and electrification, but as this week has again shown, there are still major barriers to offshore wind delivery in practice.
That is also the context in which the Energy Profits Levy debate now sits - not just bills, but energy security, reducing our reliance on imports, and the jobs and supply chain capability needed to deliver the transition at scale. The North Sea still has an important economic and strategic role to play in the years ahead as evidenced by democracies like Denmark, Canada and New Zealand which has given oil and gas renewed focus - Norway, of course, our closest neighbour, has never wavered.