Economic analysis of Scotland’s wind and hydrogen sectors

The Scottish and global net zero transition presents substantial economic opportunities for Scotland. For the Scottish Government to successfully design net zero and economic policy, it must clearly assess and understand relative economic strengths, weaknesses, opportunities and threats of Scotland’s net zero and climate adaptation economy.

However, the existing data have many gaps, and policymakers often lack the necessary frameworks to make analytically informed decisions on the priorities for economic intervention and just transition policy design.

This report provides baseline data and assessment of the economic potential of the onshore wind, offshore wind, and hydrogen sectors using a novel methodology. It breaks down and measures these sectors into distinct economic value chain activities such as project development, manufacturing, installation, operation and maintenance, specialised consultancy services and end-of-life. The methodology is applicable to other sectors.

Summary of findings

• The research identified that the onshore and offshore wind sectors share many strengths, weaknesses, opportunities and threats. For example, the vast majority of turnover in both sectors comes from installation, operation and maintenance activities.
• Differences in these value chain stages between the sectors arise largely due to differences in their maturity in Scotland – the higher levels of installed onshore wind capacity results in increased turnover from operation and maintenance, while for the rapidly growing offshore wind sector, installation represents the highest share of turnover.
• Manufacturing is another point of contrast between the sectors; potentially related to the wider array of components available for manufacture, offshore wind provides a much larger share of manufacturing turnover.
• The outlook for the hydrogen sector is relatively uncertain due its immature and unproven nature, and current debate regarding possible future uses.
• The outlook for the onshore and offshore wind sectors is more certain since they are already established and commercially viable global markets. These sectors have good prospects for strong growth in Scotland, with the biggest economic growth expected in offshore wind, driven by strong domestic and international demand and the need to increase installed capacity.

Further details on the findings can be found in the report attached.

If you require the report in an alternative format such as a Word document, please contact info@climatexchange.org.uk or 0131 651 4783.