I thank Liam McArthur for bringing the matter to the chamber for debate. I genuinely welcome the fact that we can have a proper debate here. We rightly had fairly detailed parliamentary consideration of the matter when I brought it to Parliament at the earliest opportunity during topical questions on 25 November, but that is no substitute for a debate. Today, we have had that debate and I thank all members who have participated in it.
There has been welcome consensus on the support that exists for the principle of wave energy and its potential for Scotland, and the on desire that we should continue to play a leading role in developing wave energy here and for the world. We all agree about that. I have endeavoured to provide the face-to-face briefings for members to which Liam McArthur alluded. I also met Malcolm Chisholm in November and Alison Johnstone on 15 January, and my door is open for further meetings.
Many members have alluded to the success that Pelamis achieved because of the skills, expertise, determination and commitment of its employees, to whom I pay tribute. Reference has been made to the sadness, anger, bitterness and disappointment that many must have felt in the circumstances of the termination of the company’s existence. I understand that and I share those people’s concerns, as does Scottish Renewables in its briefing for the debate. Many members have spoken eloquently on the subject. There is no easy part of being made redundant; sadly, many people in Scotland face that situation across a range of businesses. Given my responsibility as minister for business, I am acutely aware of that.
The two Pelamis P2 devices that were deployed at EMEC together had more than 11,800 total hours of grid-connected operation. It is important that I say that to inform people who read the Official Report of the debate not only that there is cross-party consensus about the principle but that, in practice, Pelamis delivered a substantial amount of electricity to the grid. I am told that the longest continuous period for which the devices generated electricity was 19.5 days.
The challenges of operating in the marine environment are known to all members. I am no expert, but I understand that the main challenges that face the developers of devices are reliability, survivability and installability, and I have spent a lot of time discussing issues such as power take-off with industry experts not just from Pelamis, but from Aquamarine Power, Albatern, AWS Ocean Energy and other companies. Prior to deciding WES’s shape, form, objectives, funding and the roles that it should fulfil, I have made it my business to have detailed discussions with many of the industry’s leading players. Indeed, Alison Johnstone alluded to the lengthy meeting that we had at St Andrew’s house, which was followed by a dinner with many of the leading players.
The purpose of that engagement and the more substantial work that Highlands and Islands Enterprise is taking forward is to ensure that WES is set up in the right way. Many members have asked for specific details of WES, so I look forward to giving Parliament details of its budget, business plan and programme of activity on Wednesday 25 February via an appropriate parliamentary channel. I will ensure that all members are appropriately informed. I am not saying that there will be a parliamentary statement; however, I think that members want details, so I will provide them. Whether I do so through a question or otherwise has yet to be determined, but I want to tell members that we are nearly in a position to give them the information that they have quite fairly and reasonably asked for. I will follow that with an address to the wider investment community at the RenewableUK wave and tidal conference, which is taking place in Edinburgh on the same day, but I make it clear that Parliament will be informed first.
Questions about funding have quite rightly been raised. I am advised that Pelamis received about £95 million, £70 million of which was contributed by the private sector. The positive point that is to be made is that private sector investment was attracted; there were a number of private sector investors, and they contributed most of the money. There are detractors of wave energy—their voices have not been heard in this debate, but they are out there—and in response to them, I point out that private sector investors put £70 million into the technology and that through the skills of the individuals involved electricity was successfully generated. I have a breakdown of the funding with me, and I can tell members that the public funding came to about £25 million.
The difficulty that arose is well known. Sadly, there was no prospect of further commercial investment. I assure all members that the Scottish Government and the enterprise network spent a considerable amount of time and effort on potential options, but the stark reality was that once the last private sector investment had been withdrawn it did not seem possible for the Scottish Government to shoulder the total burden of the funding that would, according to experts, have been required to take Pelamis forward. There is no easy way to say that, but that is the truth of the matter. It is important that I am as candid and as straightforward as I generally try to be in my dealings, and that was the situation.
As for the UK Government, which Mr MacKenzie mentioned, I have sought to deal constructively with it; indeed, Greg Barker and I jointly opened the Pentland Firth and Orkney waters marine energy park some years ago. On 2 October, I met Amber Rudd at the margins of the Ocean Energy Europe conference in Paris, and she seemed very willing for her or her senior officials to meet Pelamis. That undertaking was not delivered, but I do not say that with any political intent. Frankly, by that stage, it was probably too late to turn the situation around.
I do not particularly want to blame the UK Government. In fact, although I have some sympathy with many of the points that Mr MacKenzie made, the opportunity that has emerged and the way in which we can deliver the aspirations that members have described in this debate lie partly in looking forward to the post-May scenario and seeing whether the UK Government can make more of a financial contribution to the wave sector in Scotland.
In particular, we can also work to ensure increasing support from the EU for the marine energy sector, which is now part of the EU strategic energy technology plan—the SET plan—which means that it is now eligible for funding. The work that Sian George of Ocean Energy Europe has done is very positive and brings with it the possibility that there could be realistic financial support from the EU. I mention that because I wish to be as positive as I can in this debate.
I do not want to pre-empt the announcements that will be made on 25 February. I wanted to make it clear today that the decision will be made, but I would like to say briefly why it has taken until 25 February in order to complete our plans. The reasons are broadly twofold. First, it was determined—as I made clear in my responses to the topical questions that I mentioned earlier—that we wished to secure for Scotland the intellectual property in the Pelamis devices and other apparatus and equipment. That proved to be a more protracted process than we had hoped, as is often the case when dealing with administrators, for various technical and unavoidable reasons.
We worked closely with KPMG and I kept in constant contact with Alex Paterson of HIE, who led the negotiations. We were closely involved at all points, and those negotiations were successfully concluded. Like most such negotiations, they were not particularly easy, but I can tell Mr Chisholm that there were ultimately no other bidders. I believe that that is an accurate description, although I have not seen confirmation of that in writing from KPMG. I was advised that, although there were interested parties, as so often happens that did not translate into actual bids of a realistic commercial value. That answers some of the questions that Mr Chisholm’s constituents have, and perhaps some of them are here in the public gallery this evening to hear the responses to perfectly straight, reasonable and fair questions.
The first thing that we had to do was therefore to secure that intellectual property, and that was done around 19 January, which is when I reported to Parliament. The second, and perhaps more important, reason for the timescale is that we need to get this right. We are setting up an extremely important new body. I wanted it to begin its life after we had worked with several of the industry leaders to ensure that it is set up on a proper footing, so that it does not become a body that purely carries out desk-based research or a body that spends too much of its budget on running itself, and so that as much of its funding as possible can be designed to take forward the various challenges with which Pelamis, Aquamarine, Albatern and others have been grappling.
Two constant themes arose from the meetings and discussions, both with me and with Alex Paterson and his colleagues at HIE. They were, first, that almost all the players in the sector felt that there could have been benefits from a more collaborative approach with regard to specific areas, such as power take-off, and, secondly, that when we make our announcement we must apply the principle that WES’s modus operandi will be carefully guided by people with experience of the sector, of business and of the technology. We want it to be guided in the work that it does and in the deployment of its funding by the people who know what they are talking about. I was determined that that should be the case and that that model should be applied when it is set up.
I am conscious that there were a lot of questions that I may not have answered. As I always say, my officials will look at the Official Report, and if there are any particular questions of fact that I have not answered, I will ensure that they are dealt with. If members wish to seek further information on any points that they feel I have not sufficiently answered in the debate, I will be happy to deal with all of them, especially as there is a confluence of objectives in this chamber.
I will conclude with the promise that this Government will do everything that it possibly can, in every practical way, to make the dream of wave energy—a dream that has been almost converted into a reality of a reliable, efficient and steady stream of electricity that can become commercially capable of being developed—into a reality.
Scotland has some of the best potential wave resource in the world. More importantly, we have EMEC in Orkney—Mr McArthur’s constituency—and, around our coasts, particularly in the Highlands and Islands, we have communities that are committed to the support of wave energy. We will do our utmost to ensure that Scotland realises these ambitions for wave energy and, within the next five to 10 years, converts them into a reality, in a world-leading role.
Meeting closed at 17:51.