UK Government must overhaul windfarm deals after BiFab collapse, say MSPs
An inquiry into the demise of BiFab (Burntisland Fabrications Limited) has also criticised the Scottish Government and the Canadian owners of the firm over a lack of transparency about investment decisions.
Holyrood’s economy, energy and fair work committee described the failure of the company as a “huge blow” to workers and local communities in a report out on Friday and a “concerning reflection” of the ability of Scottish businesses to benefit from the growing offshore wind industry.
BiFab, which makes structures for the oil and gas and renewable energy industries, went into administration in December after failing to win contracts to build wind turbine jackets for developments off the coast of Angus and Fife.
The Scottish Government announced it could not provide further financial support to the company, citing EU state aid rules.
MSPs were told the current contract for difference (CFD), which governs UK onshore and offshore windfarm schemes, encourages power firms like SSE renewables and EDF to strike the cheapest possible deals on producing electricity.
It means Scots firms like BiFab seeking to build the turbines lose out to low wage economies in the far east – or European competitors which have state-aid support.
Today's report states that "all reasonable steps" should now be taken to support robust and competitive local supply chains for offshore wind.
"The committee urges the UK Government to fully consider all options available to it to balance investment in offshore wind, energy prices and local supply chain benefits,” the report states.
"This should include, but not be exclusive to, the consideration of increased contractual requirements to demonstrate that consideration has been given to local supply chains, requirements on fair work policies and pay, and wider environmental factors."
The report adds: "The committee urges the UK Government to design and implement changes to the CfD process with urgency."
The committee also raises concerns over the lack of transparency in decision making by both the yard owners DF Barnes and the Scottish Government, which had invested almost £40 million of public money in BiFab.
Ministers also provided a separate loan facility of £15 million to support working capital and allow the company to tender for contracts.
But neither the Scottish Government nor DF Barnes shared the pre-acquisition business plan.
Committee convener Gordon Lindhurst said: “The failure of BiFab is a huge blow for workers and communities in Burntisland, Methil and Arnish. It is also a concerning reflection of the ability of the Scottish supply chain to benefit from the growth of offshore wind. It is now vital that the administrators find a buyer to secure the future of the company.
“The committee is extremely concerned by the lack of transparency on the part of both DF Barnes and the Scottish Government over their decision making and use of public funds. Both cited the pre-acquisition business plan as corroboration of their position, but despite repeated requests neither shared this business plan with the inquiry."