Appendix 12 Offshore Socio-Economics – Baseline Environment

Appendix 12
Offshore Socio-Economics – Baseline Environment

12.1.   Desktop Study

12.1.1 Socio-Economics Baseline

  1. The socio-economic baseline assessment will consider relevant economic indicators, such as population, economic activity and industrial structure, for the local socio-economic study area(s), which are expected to consist of a number of local authorities, as well as Scotland and the UK. As the epicentres of impact (i.e. ports used in construction and operation) are not known at this time, no local socio-economic study area(s) have been identified and therefore no baseline assessment of the local area has been carried out at this stage. The socio-economic baseline therefore focuses on the Scottish and UK economies. The local study area(s) socio-economic baseline will be undertaken based on the same indicators as has been used for the Scottish and UK economies.
  2. The following data sources have been considered as part of the socio-economic baseline:
  • Mid-2020 Population Estimates Scotland (National Records of Scotland, 2021a);
  • 2020-based Principal Population Projections (National Records of Scotland, 2021b);
  • Principal Population Projections 2020-based (ONS, 2022b);
  • Mid-Year Population Estimates UK 2020 (ONS, 2022a);
  • Business Register and Employment Survey (ONS, 2022c);
  • Government Expenditure and Revenue Scotland (GERS) 2021/22 (Scottish Government, 2022j);
  • People Skills Survey 2021-2026 (Offshore Wind Industry Council, 2021); and
  • Offshore Wind O&M a £9 billion per year opportunity by 2030 for the UK to seize (Offshore Renewable Energy Catapult, 2020).

12.1.2 Strategic Baseline

  1. The strategic socio-economic baseline, which considers a number of government policies and how they relate to the Array, will be augmented with local strategies when the local socio-economic area(s) have been identified. Socio-economic strategic policy documents considered include:
  • The Offshore Wind Sector Deal (UK Government, 2020);
  • National Performance Framework (Scottish Government, 2018b);
  • National Strategy for Economic Transformation (Scottish Government, 2022k); and
  • Offshore Wind Policy Statement (Scottish Government, 2020).

12.2.   Site-specific Survey Data

  1. No site-specific survey has been undertaken to inform this EIA Scoping Report for socio-economics nor will a site-specific survey be undertaken to support the development of the Array EIA Report, as sufficient desktop data is available to inform the baseline from which the potential impacts can be assessed.

 

12.3.   Baseline Characterisation

12.3.1 Socio-Economic Baseline

Population

  1. In 2020, Scotland had a population of almost 5.5 million ( Apx Table 12.1   Open ▸ ), around 8.1% of the UK population of 67.1 million. The share of the working age population (16 to 64) was higher in Scotland at 63.9%, compared to the UK (62.4%). Compared with the UK, Scotland has a lower proportion of younger people (0 to 15) as a share of the population and a higher proportion of older people (65+).

 

Apx Table 12.1:
Population by Age Group, 2020

Apx Table 12.1   Open ▸ : Population by Age Group, 2020

 Source: National Records of Scotland (2021a), Mid-2020 Population Estimates Scotland and ONS (2022a), Mid-Year Population Estimates UK 2020.

 

  1. Between 2020 and 2045, the population of Scotland is projected to decrease by 1.5% ( Apx Table 12.2   Open ▸ ), while the population of the UK is expected to grow by 5.8%. The working age Scottish population (16 to 64) is projected to fall by over 190,000 (-5%), while in the UK it is expected to increase by almost 600,000 (+1%).

 

Apx Table 12.2:
Population Projections, 2020-2045

Apx Table 12.2   Open ▸ : Population Projections, 2020-2045

 Source: National Records of Scotland (2021b), 2020-based Principal Population Projections and (ONS, 2021), Principal Population Projections 2020-based.

 

Employment

  1. In 2020, there were 2.5 million jobs in the Scottish economy ( Apx Table 12.3   Open ▸ ), representing around 8.3% of employment in the UK economy (30.5 million jobs).
  2. During the development stage, which includes project management, project design and environmental impact assessment, there will be opportunities for the professional, scientific and technical activities sectors, which employ 178,500 people in Scotland (6.7% of UK employment in these sectors). Employment in electricity, gas, steam and air conditioning supply sectors in Scotland (20,500) is 15.1% of UK employment, reflecting the proportionately larger renewable energy sector in Scotland. This may also indicate that the Scottish professional services sector has experience in supporting the renewable energy sector.
  3. The sectors most relevant to the construction phase of the Array include manufacturing sectors, which have total employment in Scotland of 177,500 (7.6% of UK manufacturing employment) and construction (130,000, 8.7% of UK construction employment). Scotland’s high share employment in mining and quarrying sectors, which employ 28,000 people (56.6% of UK employment), reflects strengths in offshore oil and gas (which are included in this category in the data), relevant for the development and construction phases. Scottish employment in transportation and storage of 110,500 (7.2% of UK employment), will also be relevant since the Array will require port infrastructure during the construction and operation and maintenance phases.

 

Apx Table 12.3:
Employment in Selected Industries, 2020

Apx Table 12.3   Open ▸ : Employment in Selected Industries, 2020

Source: ONS (2022b), Business Register and Employment Survey 2020. Note, totals do not sum as only selected industries shown.

 

Economy

  1. The Array will contribute to the Scottish and UK economies during all phases, and its contribution will be benchmarked against Gross Domestic Product (GDP) in order to assess the magnitude of impact. Total GDP in the fiscal year 2021/22 (Scottish Government, 2022j) was:  
  • Scotland: £176 billion; and
  • UK: £2,376 billion.

Socio-economic baseline summary

  1. The Scottish population is expected to decrease over time, particularly the working age population, and so requires new drivers of economic growth. The offshore renewables sector represents an opportunity of substantial scale for the Scottish economy, and the wider UK economy.
  2. Baseline characterisation of the local socio-economic study area(s) will be undertaken when the ports that will be used during the construction and operation are known.

12.3.2 Strategic Baseline

UK Offshore Wind Sector Deal

  1. The Offshore Wind Sector Deal (UK Government, 2020), sets out the UK Government’s aim to support the development of offshore wind energy generation in the UK, making the sector a significant part of a low-cost, low-carbon flexible grid system. The Deal also emphasises how UK companies can benefit from the opportunities presented by the expansion of the offshore wind sector, enhancing the competitiveness of UK firms internationally and sustaining the UK’s role as a global leader in offshore wind generation.
  2. The UK Government (2020) highlights that some estimates suggest that offshore wind capacity globally will grow by 17% annually from 22 GW to 154 GW in 2030, which could mean the UK contributing up to 40GW of generating capacity. The UK Government aims to reach this capacity in a sustainable, timely way, and commits to working with the offshore wind sector and wider stakeholders to deliver the expansion of the sector, addressing strategic deployment issues, transmission issues and environmental impacts. Reaching this level of capacity could support up to 27,000 jobs in the UK, while the sector will work with government, existing institutions, and universities to increase job mobility between energy sectors, increase apprenticeship opportunities and coordinate local efforts, further developing the benefits to the UK economy.
  3. The UK Government has also highlighted the role that offshore wind can play in the transition to a net zero economy by 2050 (UK Government, 2021). Based on existing technology, electrification remains the main route to reach carbon neutrality. To make this change possible, the supply of electricity will need to increase significantly to match demand and the Government aims to decarbonise the power by 2035. This also has the potential to create many new green jobs, as part of the UK Government’s Build Back Greener agenda.

National Performance Framework

  1. Scotland's National Performance Framework (NPF) (Scottish Government, 2018) sets out the ambitions of the Scottish Government across a range of economic, social and environmental factors. The Framework is designed to give a rounded view of economic performance and progress towards achieving sustainable and inclusive economic growth and wellbeing across Scotland.
  2. The aims for Scotland set out in the NPF are to:
  • Create a more successful country;
  • Give opportunities to all people living in Scotland;
  • Increase the wellbeing of people living in Scotland;
  • Create sustainable and inclusive growth; and
  • Reduce inequalities and give equal importance to economic, environmental and social progress.

National Strategy for Economic Transformation

  1. In March 2022, the Scottish Government published the National Strategy for Economic Transformation (Scottish Government, 2022k), which set out its ambition for Scotland's economy over the next 10 years. The Scottish Government's vision is to create a wellbeing economy where society thrives across economic, social and environment dimensions, which delivers prosperity for all Scotland's people and places. Of particular importance is the ambition to be greener, with a just transition to net zero, a nature-positive economy and a rebuilding of natural capital.
  2. A key longer-term challenge identified in the strategy is to address deep-seated regional inequality, which includes in rural and island areas that face problems such as a falling labour supply, poorer access to infrastructure and housing. The transition to net zero presents a further challenge of delivering positive employment, revenue and community benefits.
  3. To deliver its vision and address the economy's challenges, five programmes of action have been identified (with a sixth priority of creating a culture of delivery), including:
  • Establishing Scotland as a world-class entrepreneurial nation.
  • Strengthening Scotland's position in new markets and industries, generating new, well-paid jobs from a just transition to net zero.
  • Making Scotland's businesses, industries, regions, communities and public services more productive and innovative.
  • Ensuring that people have the skills they need to meet the demands of the economy, and that employers invest in their skilled employees.
  • Reorienting the economy towards wellbeing and fair work.
  1. The strategy notes that Scotland has substantial energy potential, with a quarter of Europe's wind potential, and that it has developed a growing green industrial base. This provides a strong foundation for securing new market opportunities arising from the transition to net zero. Renewable energy also has a role to play in supporting productive businesses and regions across Scotland.

Offshore Wind Policy Statement

  1. The Scottish Government's 2020 Offshore Wind Policy Statement (Scottish Government, 2020) highlights the substantial potential of Scotland's waters for offshore wind and the importance of the sector in the transition to net zero.
  2. When the policy statement was published in October 2020, the ScotWind leasing round was expected to lead to an additional 11 GW of offshore wind capacity by 2030, generating substantial economic impacts in Scotland's offshore wind supply chain. In contrast, the ScotWind leasing round is now expected to lead to an additional 25 GW of offshore wind capacity (Crown Estate Scotland, 2022c), with particular economic opportunities related to floating offshore.

Strategic baseline summary

  1. The UK Government aims to ensure that UK companies can benefit from the opportunities presented by the expansion of the offshore wind sector, enhancing the competitiveness of UK firms internationally and sustaining the UK’s role as a global leader in offshore wind generation. Offshore wind is also expected to play a significant role in the transition to net zero, creating green jobs as part of the Build Back Greener agenda.
  2. The Scottish Government, as outlined in its Offshore Wind Policy Statement, expects offshore wind projects to play an important role in transitioning to a net zero economy, while contributing to sustainable economic growth with new, well-paid jobs. In particular, there are expected to be opportunities in Scotland related to offshore wind projects with floating turbine foundations, like the Array.