Crown vs. Cabinet: Scots fight for marine rights

28 March 2012 (Last Updated June 23rd, 2020 15:39)

A new report by Scottish MPs has called for the Crown's control over Scotland's seabed to be devolved to local communities. Sarah Blackman explores the reasoning behind this campaign and finds out if renewable energy companies will benefit from a government-controlled ocean-floor.

Crown vs. Cabinet: Scots fight for marine rights

The latest report in a long list of parliamentary inquiries is calling for the Crown Estate Commission’s control of 50% of Scotland’s coast and almost all the seabed to be devolved to local authorities, a move which could feed money back into renewable energy projects around the country.

Scotland Secretary Michael Moore has so-far ruled out the devolution of the body, despite a number of high-profile reports criticising the management of the Crown Estate in Scotland.

But, this time, cross-party support for the proposal could leave Moore with no other choice but to act on their demands.

Role of the Crown Estate

“Some renewable energy companies have shown little or no concern over the Crown’s involvement in their projects, with some firms expressing support for the body.”

The Crown Estate aims to support the development of wave and tidal developments by leasing project sites in UK waters. To date, the body has leased 33 sites for projects, from engineering test and demonstration facilities for prototypes through to commercial project sites with several hundred megawatts of capacity.

At present, Crown Estate assets in Scotland account for less than five percent of the organisation, as a greater part of its revenue comes from commercial property in England. However, the group’s offshore assets are growing in significance and energy revenue from Scotland is forecast to be up to £48m a year by 2020.

This revenue is likely to come from the ten-turbine array currently being installed by ScottishPower Renewables in the Sound of Islay, E.ON’s wave farms, under construction in Orkney Waters, and MeyGen’s Pentland Firth Inner Sound tidal power site, among other hydro projects.

Under current practices, however, the Crown Estate Commission (CEC) is able to pass the profit from seabed leases directly from Scotland to HM Treasury in England, a rule which has angered the Scottish Parliament, the Scottish Government and the Scottish people for several years.

But, a new report could put an end to these activities.

Scottish Affairs Committee 2012 report

In March, Westminster’s Scottish Affairs Committee published a report which identified major issues with the CEC’s management of its responsibilities, particularly in relation to the seabed and the foreshore.

Evidence taken from communities in Orkney, Shetland, Caithness, Argyll and the Western Isles showed the body’s management of the marine environment lacked accountability and transparency.

The report also explained that Scotland sees little benefit from the CEC’s involvement in projects related to fish farms, harbours and renewable energy on and off the coast.

The CEC’s UK income from marine renewable energy was £3.5m in 2010-11 (of which 14% was raised in Scotland). This revenue is expected to rise significantly over the next few years, but little of this money is expected to be invested back into Scotland.

Members of the Scottish Parliament, including those from the Scottish National Party, Scottish Labour and Scottish Liberal Democrats, have expressed frustration over cash leaking from local communities and sectors in which the CEC invests, explaining that at best, the CEC has “little regard” for those needs and interests and at worst, it behaves as an “absentee landlord or tax collector”.

Committee chairman Ian Davidson said assets must be conserved in order to maximise benefits to the island and coastal communities most closely involved in them.

“We are convinced the only way this can be done is by devolving as much of the responsibility – and benefit – down to the level of those local communities as possible,” Davidson added.

Devolved seabed rights: a political issue

The fact that rent is being paid to the Crown Estate for tidal power leases also means there is some value leaking away from developers, which ultimately translates into higher energy bills for consumers.

“The CEC’s UK income from marine renewable energy was £3.5m in 2010-11 (of which 14% was raised in Scotland). This revenue is expected to rise significantly over the next few years.”

John Finnie, Scottish National Party MSP for Highlands and Islands, believes that Scottish Government control over the seabed will allow ministers to more easily support the development of offshore renewables.

“It would allow those who control the seabed to work more closely with economic development bodies and tidal and wave turbine developers for the benefit of all involved,” said Finnie.

“It would also simplify the planning for developments as presently the Crown Estate Commissioners have a role in granting a lease to developers for use of the seabed and the Scottish Government issues licenses for development. This duplication adds to the administration required to get an offshore project up and running.

“The Scottish Government believes that in order to reap the full benefits of the offshore renewables industry, the functions of the CEC must be devolved to Scotland. The maritime economy offers some of Scotland’s best opportunities for growth, but we cannot make the best of these in the current set-up.”

Responding to the Scottish Affairs Committee and MSPs who support the proposed devolution, however, the Crown Estate’s Scottish Commissioner Gareth Baird said this organisation’s commitment to Scotland and the economy remains “full and whole-hearted.”

“We’ll be studying the report’s recommendations closely – looking at how we can build on the work of our world-class renewable energy team in supporting the offshore ambitions of the Scottish Government and local communities,” Baird said in a statement.

The industry’s verdict

Some renewable energy companies have shown little or no concern over the Crown’s involvement in their projects, with some firms expressing support for the body.

Renewables Energy Association head of marine renewables Dr Stephanie Merry insisted she has seen little to suggest that abolition of Crown rights on ownership of the Scottish seabed is something that is likely to happen.

“We appreciate the support of the Crown Estate and the Scottish Government in their collaborative work, such as the Saltire Prize [a £10m award for a team that can demonstrate in Scottish waters, a commercially viable wave or tidal stream energy technology].

“The Crown Estate is also planning to invest £5.7m to accelerate and de-risk projects in Pentland Firth and Orkney,” added Merry.

Bob Smith, Pulse Tidal CEO, said: “While there is clearly a role for individual development companies in that process, it makes sense for there to be an overall strategic view of tidal power development. The Crown Estate does this well, and is increasingly developing its role as a facilitator for the tidal power sector.

“They have made some mistakes in the past, but are now listening and working with developers to make sure that they are not erecting unnecessary barriers.”

Debatable future

“The Crown Estate aims to support the development of wave and tidal developments by leasing project sites in UK waters.”

It seems Members of Scottish Parliament have a case for taking away the Crown’s responsibilities for the Scottish seabed – the proposal would ensure that income invested in offshore projects in Scotland would stay in Scotland.

True, a number of high-profile and authoritative reports published in recent years have already criticised CEC’s management of the Crown Estate in Scotland – and support for the body from Secretary of state for Scotland Michael More means changes have yet to be made.

The 2012 report, however, may have left Moore isolated in his views as the rest of parliament backs him into a corner, according to Scottish National Party MSP Rob Gibson.

“The two-stage model of devolution proposed by the Scottish Affairs Committee has already been backed by the Scottish Parliament and is the best way to get money invested back into local communities – including those in my own constituency. There is now overwhelming support for this too,” Gibson said.

In spite of this support, it is debatable whether a non-profit or government-run organisation would do a better job of managing offshore assets when renewable energy businesses, who have worked in Scottish waters, are praising the Crown Estate for its efforts in creating new and exciting opportunities for development.