Scotland has secured two offshore wind projects in the latest UK Government Contracts for Difference auction, but ministers, industry and unions have warned that structural barriers continue to limit the full economic potential for the Highlands and Scotland’s wider offshore wind pipeline.
The UK Government’s Allocation Round 7, billed as the largest offshore wind auction ever held in Europe, secured 8.4 gigawatts of new offshore wind capacity across the UK, enough to power the equivalent of more than 12 million homes and unlock around £22 billion in private investment.
Within that round, two Scottish projects secured support: Berwick Bank Phase B in the North Sea and the Pentland floating offshore wind project, located off the north coast and closely linked to Highland waters and infrastructure.
While welcoming those awards, the Scottish Government said the outcome also highlighted long-standing disadvantages facing Scottish projects, particularly around transmission charging and auction design.
Energy Secretary Gillian Martin said the results were “welcome” but represented a missed opportunity for Scotland at a critical moment.
“Whilst it is welcome that two Scottish offshore wind projects have secured a Contracts for Difference award in Allocation Round 7, much more could have been achieved at this pivotal moment,” she said.
“These projects are important for unlocking economic benefits and driving innovation in the sector, and will play a key role in delivering Scotland’s and the UK’s energy security.
“Unfortunately though, once again, this also represents a missed opportunity.
“We have repeatedly warned that a limited AR7 budget and unfair transmission charges would put Scottish projects at a competitive disadvantage, despite holding more than a third of the total UK offshore wind pipeline.”
She said the outcome demonstrated the impact of UK Government decisions not to address transmission charging, calling for fundamental reform ahead of the next auction round.
“This must be fundamentally changed ahead of Allocation Round 8.
“We call on the UK Government to act urgently to support the deployment of our strong project pipeline.”
The Scottish Government said it would continue investing strategically to support offshore wind delivery, including anchoring supply chains and developing port infrastructure, much of which is based in or directly affects Highland communities.
UK Energy Minister Michael Shanks struck a more celebratory tone, describing the auction as a major step forward for Scotland and the UK’s clean power ambitions.
“This is a monumental result that sees the first Scottish offshore wind project in three years securing support from our flagship renewables auction, putting us firmly on track to meet our clean power mission and supporting thousands of jobs in the region,” he said.
“It also shows the kind of energy system we want to build for Scotland.
“By agreeing a price for offshore wind that is far lower than the cost of building new gas, clean power is the right choice to get bills down for good.”
Across the UK, the auction secured 12 offshore wind projects, including fixed-bottom developments and two floating wind projects.
Floating wind, seen as critical for deeper waters off the north and west of Scotland, remains a key opportunity for Highland ports, fabrication yards and engineering skills.
The UK Government said the average strike price for fixed offshore wind was significantly lower than the cost of building and operating new gas power stations, framing offshore wind as both cheaper and more secure in the long term.
Energy Secretary Ed Miliband described the auction as a turning point for energy sovereignty.
“With these results, Britain is taking back control of our energy sovereignty,” he said.
“This is a historic win for those who want Britain to stand on our own two feet, controlling our own energy rather than depending on markets controlled by petrostates and dictators.”
Industry body Offshore Energies UK welcomed the scale of the auction but echoed Scottish Government concerns around competitiveness and transmission costs, warning that grid charges remain a serious issue for Scottish projects.
OEUK Energy Policy Director Enrique Cornejo said the awards were an important step but stressed that delivery would require joined-up planning and a focus on domestic supply chains.
“It’s positive to see projects approved in this round across the UK, including in Scotland and Wales, but transmission charges remain a significant issue directly affecting competitiveness and investment decisions,” he said.
“Putting the integrated UK supply chain at the heart of delivery, supported by mechanisms such as the Clean Industry Bonus, is critical for investment and building a homegrown energy future.”
OEUK also warned that thousands of jobs have already been lost across the offshore energy supply chain due to uncertainty and policy pressures, calling for a balanced approach that recognises the ongoing role of oil and gas alongside renewables.
Trade union GMB welcomed the scale of investment but said delivery must translate into real, long-term employment, particularly in regions like the Highlands that have repeatedly been promised economic benefits.
Andy Prendergast, GMB National Secretary, said:
“This is obviously good news; securing significant investment in clean power is what we need to hit net zero.
“But the real litmus test will be if it delivers the jobs so often promised and so often fail to materialise.
“This is a golden opportunity to on-shore supply chains and create genuine employment opportunities across the UK.
“It’s imperative that we take it.”
With around 38.4GW of offshore wind now in the approved UK project pipeline and a target of up to 50GW by 2030, Scotland remains central to meeting national energy goals.
For Highland communities, the stakes are high.
Ports, fabrication facilities, grid infrastructure and skills development could anchor long-term economic benefit, but ministers, industry and unions agree that unless transmission charging, auction design and supply-chain commitments are addressed, Scotland risks once again generating power without capturing its full value.
As Allocation Round 8 approaches, the pressure is mounting for reforms that allow Scotland, and particularly the Highlands, to convert world-class renewable resources into lasting jobs, infrastructure and energy security at home.
