Scotland’s net zero economy – investment readiness

The Scottish Government has committed to a just transition to net zero by 2045. However, the cost of this transition cannot be met by public sector funding alone, so sectors must attract private capital investment to fill investment gaps.

This study aims to develop a robust and repeatable methodology to investigate the investment readiness of net zero sectors in Scotland, and to test this methodology by applying it to onshore wind, offshore wind and hydrogen as a proof of concept. The report also includes key interdependencies, barriers and opportunities for priority action by the Scottish Government or its partners.

Findings

The report defines investment readiness as: “a position where investors can understand the investment opportunity and develop projects with sound understanding of financial fundamentals and risks based on reasonable projections.”

The researchers developed a bespoke investment assessment methodology that uses a scorecard approach. The methodology has been developed based on the well known Porter’s Five Forces model, in order to score sectors against the following criteria:

• market growth potential
• profitability
• policy support
• market accessibility
• supporting infrastructure
• demand

Summary findings

The summary key findings identified from the individual sector assessments are that the onshore and offshore wind sectors are more established and mature markets, and therefore both sectors score higher than the hydrogen sector, which is a more nascent sector.

The Scottish Government is rolling out the methodology across some of Scotland’s other key net zero sectors.

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