As damning indictments go, the government-supported, Fife-based BiFab withdrawing its bid to build jackets for the government-licensed NnG wind farm project off the coast of Fife is right up there. If there is a more obvious example of a failing industrial policy, I can’t think of one.
Let’s remind ourselves of the back-story. In December 2017 BiFab workers staged site occupations and a mass protest at the Scottish Parliament in defence of jobs. The Scottish Government responded by providing a loan to the company and helping secure a contract to build jackets for wind turbines in the Moray Firth. In 2018 a Canadian firm, DF Barnes, bought the company, with the Scottish Government converting its loan into a 32.4 per cent equity stake. The survival of the firm was predicated on securing new contracts to build jackets for wind farms. When EDF Energy was procured through a competitive tendering process to takeover the development of a huge offshore wind farm, Neart naGoaithe (NnG), just next door to Bifab’s yards, it seemed like a perfect fit. A local supplier producing for a nearby wind farm – how hard can it be?
Too hard, is the answer. The Scottish Government did not place any requirements on EDF Energy to source parts of the supply chain for NnG in Scotland. So when the French energy giant started planning where they wanted to get jackets for the turbines from, they looked at who the cheapest suppliers are worldwide. A trade-union led campaign to pressure the company to supply from Bifab saw it commit to getting eight out of 53 sleeves from the Fife yards, and the rest from Indonesia, a carbon emissions impact in shipping alone which the STUC estimated to be the equivalent of 35,000 new cars on the road.
The eight sleeves could support 200 jobs at Bifab, but if they had got the whole contract it would have been 1,000 jobs, nearly the whole workforce. Despite having an equity stake in the firm, the Scottish Government said EU state aid rules meant it could not compel EDF Energy to source the sleeves in Scotland.Meanwhile, other possible contracts came and went. The Seagreen wind farm off the coast of Fife supplied their jackets from China and United Arab Emirates instead of the Fife yards. Still, they had the eight sleeves lined-up at NnG – didn’t they?
DF Barnes issued a statement yesterday: “BiFab can confirm that following a decision by the Scottish Government that it can no longer provide assurances for the NnG jacket fabrication contract”. The Scottish Government say that as a minority shareholder they can’t legally continue to plough money in if the majority shareholder is not funding the company, citing State Aid rules again. Bifab now appears to be on the verge of liquidation.
The unions are angry, with Unite Scotland’s General Secretary Pat Rafferty accusing the Scottish Government of “walking away”.
“Two projects worth a total of £5 billion, requiring 168 turbine jackets to power our future, and not even one will be built in Scotland – everyone needs to let that sink in,” Rafferty added.
Roz Foyer, STUC General Secretary, questioned the Scottish Government pointing to EU State Aid rules, saying “few observers of industry will doubt that governments and competitor companies in Europe would be standing up for their own supply chain and their own workers.”
Indeed, the EU Commission suspended key parts of its State Aid rules when the pandemic hit in March, and just announced an extension to the “temporary framework” last week until 30 June next year. Countries all over Europe are investing huge sums in projects which firms directly benefit from. But even if the old State Aid rules must still be adhered to, why then did the Scottish Government go down the route of becoming a minority shareholder in Bifab, if that sort of investment was going to limit what it could do in terms of supporting the company to bid for contracts? Why didn’t it simply just nationalise the firm? And what about writing in to the licensing of wind farm projects the need for ecological sustainability considerations in the supply chain? Whichever way you look at this, big mistakes must have been made by the Scottish Government at some point in this process to end up in the situation Bifab is in now.
The crisis in Scotland’s green energy manufacturing sector goes well beyond Bifab, but the plight of the workers at the Fife fabrication yards is emblematic of the problem. They have the skills to do work that is essential to Scotland’s zero-carbon transition, but they can’t put those skills to good use because of a broken system of rules which only favours multi-national companies like EDF Energy. Something has to change.
Source Direct is a free morning newsletter providing you with all the latest Scottish news in your inbox each morning, including:
- Analysis of the key stories
- A summary of what’s in the Scottish papers
- The latest on Source
- Interesting opinion pieces from around Scottish media
To sign-up for Source Direct, click here.