With the collapse of the Scottish National Party (SNP)/Green coalition in April 2024, the new Scottish leadership has signalled that the country may take a fresh approach to the energy transition.

The 1,075MW Seagreen project, located off the Scottish coast, came online in October 2023

Source: Seagreen Wind Energy

The 1,075 MW Seagreen project, located off the Scottish coast, came online in October 2023

A reorientation of priorities regarding energy policy is unfolding at the heart of Scottish politics. In recent weeks, new first minister John Swinney has suggested he might shift away from his predecessor’s stringent opposition to offshore oil and gas exploration. 

In a bid to shore up the ruling SNP’s faltering support, Swinney told the Mail on Sunday last week that he would review the government’s opposition to new oil and gas licenses in the North Sea. 

Telling journalists that an “exploration” of the policy is under way, the move signals a drastic shift from the direction taken supported by his predecessors Humza Yousaf and Nicola Sturgeon

“We need the oil and gas sector to contribute to the transition to net zero, so it has to be strong enough and robust enough to do that,” Swinney said. “In addition to that, I want to make sure that the sector is able to contribute to the objectives of energy security that we’ve set out in our policy programme.” 

A new direction

The change in approach from the SNP comes after the collapse of the ruling party’s coalition with the Greens. The dissolution of the governing agreement and the subsequent resignation of Mr Yousaf came after his government failed to consent on SSE Renewables’ 4.1 GW Berwick Bank offshore wind farm, off eastern Scotland, in time to enter this year’s Allocation Round 6.   The project missed out on applying for a contract for difference (CfD) while ministers were still considering the details, failing to meet the April 19, 2024, deadline. 

Berwick Bank will need to wait until the next CfD bidding round (AR7), poised for 2025. The project was expected to be operational between 2026 and 2027, a target that is now fanciful at best. 

Swinney has also criticised pledges made by the Labour Party to honour existing oil and gas contracts but not back new licenses. The SNP leader claims this could cost tens of thousands of jobs in the oil and gas sector.

Labour, which is widely expected to form the next Westminster government and is threatening SNP seats, also supports increasing the windfall tax on energy giant profits from 75 percent to 78 percent. 

Fossil fuels here to stay

While the SNP maintains that it wants to achieve net-zero carbon emissions by 2045, Swinney’s change in tone could be indicative of an acceptance in Holyrood that oil and gas output in the North Sea will need to play a key role in the decarbonisation journey.

“We’ve got a commitment to manage to transition to net zero and that’s what the SNP will work with the oil and gas sector to deliver because we’ll need the oil and gas sector to contribute to our economy,” Swinney said.

“We will also ensure that there is the support that that sector can give, to enable the transition to renewables to be undertaken”.

Further indication of the SNP’s shift is the scrapping of its flagship energy aim in April this year. Scottish energy secretary Mairi McAllan told the Scottish Parliament that the government’s 2030 climate change target is now “out of reach” and that their yearly and interim targets would be replaced with a system measuring emissions every five years.

Reality meets expectation

Economic realities are increasingly coming to loggerheads with the ambitious claims of lawmakers. In the instance of oil and gas, the discussion is over job security. However, pressure is a constant throughout the UK’s construction industry. According to the Federation of Master Builders (FMB), nearly half of the country’s construction firms face financial struggles.

In the association’s latest State of Trade Survey for Q1 2024, 44 percent of respondents said their business is on track to make a loss or fall below expected margins, based on the first three months of 2024.

The Scottish government has long lauded itself as an environmental leader in UK politics. However, as the ruling party appears to dampen its aims when it comes to decarbonisation, this demonstrates broader issues regarding the political complexity of the climate transition.