Why supply chain investment is key for energy transition

Scotland is already set up for a strong future as an energy transition leader. Here are some key figures:

• Scotland’s pipeline of offshore wind projects exceeds 40GW
• Scotland is working towards targets of 5GW of hydrogen production capacity by 2030 and 25GW by 2045
• Scotland is leading the way with a range of innovations and initiatives to provide green heat for homes and businesses

Learn about Scotland's innovative green heat projects on the Investment Monitor Websiteopens in a new window 

Scotland is one of the top ten offshore wind markets worldwide, with significant opportunities for supply chain companies.

There are further growth opportunities in hydrogen, clean heat and other cleantech sectors (including energy efficiency, waste reduction and improved efficiency and pollution reduction).

Developing the capacity and capability in the Scottish supply chain to take advantage of these new opportunities, and preparing those companies to seek out opportunities internationally, will be central to Scotland achieving its potential in the new net zero economy.

A strong Scottish energy transition supply chain, serving Scotland and global markets, can support our energy security, bring new company growth and employment, and support a just transition to net zero for all the people of Scotland.

Learn about opportunities for manufacturers in Scotland's energy transition supply chain 

Why investment in innovation is essential 

This is where Scottish Enterprise’s focus on entrepreneurship and investment plays a key role. It stimulates innovation and supports the growing pipeline of companies able to contribute to the energy transition supply chain.

Our investment activity, alongside a diverse mix of private sector investors, is supporting the growth in Scotland’s equity investment market. This increases the risk capital available to companies and spin-outs at the (critical early stages) that have the potential to go on and scale and strengthen our energy supply chain.

While we work to increase access to growth capital, our support is also focused on increasing innovation, strengthening management teams, and helping our companies navigate the unique challenges they face as they successfully commercialise new products and enter new markets.

Supply chain companies we've supported 

We have a 20-year track record co-investing in Scotland’s early-stage market and are regularly cited on the top 10 most active investors in the UK.

Our investment portfolio is varied and demonstrates some of Scotland’s most ground-breaking technology:

• Verlume is a leader in underwater intelligent energy management and storage technologies for a range of power delivery and stabilisation applications offshore. It’s an innovative and internationally ambitious company that’s taking advantage of today’s global energy transition opportunities, and it’s exactly the type of company we want to focus our support on.
• Trojan Energyopens in a new window is a provider of electric vehicle charging infrastructure for local authorities and EV owners, and targets those that do not have access to off-street parking.
• Smart Green Shipping is leading the global shipping industry’s green transition through a unique industry collaboration. It aims to reduce greenhouse gas emissions and fuel costs through deploying high-tech wings, known as FastRigs, on existing vessels and new builds.
• Celtic Renewablesopens in a new window, is a leader in green chemicals. It produces and researches technology that converts low-value byproducts, residues and waste into ‘bio-chemicals’. These can displace chemicals made from oil and gas when manufacturing products like fuel, medicines and cosmetics.
• MeyGenopens in a new window, located in the Pentland Firth, is the world’s largest planned tidal stream energy project (up to 398MW, with 86MW agreed upon). The initial installation of 6MW in the first phase demonstrated the technical and commercial feasibility of a MW-scale tidal energy array.
• Orbital Marine Poweropens in a new window delivers clean, predictable power for homes and businesses with its floating tidal technology. This pioneering technology harnesses flowing currents in a cost-effective way.

Why innovating a whole supply chain is no small task

Our ecosystem is well established. But there are still challenges to securing all the investment needed for net zero. Often, early-stage investors look to invest in companies in more developed markets where the technology is less capital intensive and/or well developed.

This is particularly true for new renewable energy technologies and other cleantech technologies. These have the potential for global applications and high returns on investment – but initial product development is high risk and often requires expensive prototypes with technology development risk.

Capital requirements and time-to-market can also create unique funding challenges.

Finding solutions together

Does your company have the potential to scale? If so, we can help you unlock private sector investment in challenging sectors by providing early-stage risk capital and tailored, specialist advice.

We have substantial experience working with private sector investors and early-stage companies critical to the energy transition supply chain.

As well as working with domestic investors, we have a long history of working with international and specialist investors who can see the potential and who are able to add value to these companies in a way that helps them to progress to later and larger investment rounds.

We're committed to applying our investment experience to secure new funding into these more challenging parts of the energy transition supply chain. We have ambitions to design new interventions and create even more impactful collaborations with other providers of growth capital and industry.

Our goal is to create a strong and viable pipeline of attractive companies and projects that will attract private investment from around the world.