In an interview for Bloomberg, Scotland’s Energy Minister Fergus Ewing announced intention of reducing corporate tax levied by the UK with an aim of bringing more investors in the oil and gas industry and laying foundations for fast-tracked development of offshore wind power.
“The budget was difficult for us. Oil and gas producers want stability and we’re giving it to them. The tax-equity grab is not what people expected from the U.K.,” Ewing told Bloomberg.
The decision comes amid motion for referendum on Scotland’s independence and an effort at fortifying its economic status, including that in the renewable energy sector. Namely, Scottish Government plans to switch completely to renewable energy sources by 2020 and export energy surplus to its neighbours, Norway and Ireland.
Therefore, Ewing is undertaking activities on attracting new investors to boost development of off-shore wind farms and plants that generate electricity from tides and ocean currents. The ultimate goal is to make Scotland a hub of offshore wind industry and avail of its renewable energy resources to the fullest.
The potential of Scottish coast line has been recognized so far by numerous investors including Japanese giant Mitsubishi Power Systems Europe Ltd (MPSE) which confirmed investment of up to £100 million in establishment of Edinburgh based Centre for Advanced Technology, which could pave the way for creation of a major offshore wind turbine manufacturing site in Scotland. The wind power development is seen as a way of transforming Scottish economy, having in mind that it could bring around 28,000 jobs and generate over £7 billion by 2020.
Last month the UK Government enhanced taxes on oil producers working in the North Sea, amounting to a total of 1.14 billion pounds ($1.8 billion) for the upcoming period of 6 years.
The sector is extremely profitable having in mind that only in the past fiscal year the oil and gas production in the North Sea totalled to 8.8 billion pounds of revenue, collected by the British Treasury, which constitutes 1.6 % of the 550.8 billion pounds of overall receipts.
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Offshore WIND staff, April 16, 2012; Image: vattenfall