Former Treasury Minister Dr Alex Allinson told the public examination into Mooir Vannin that there is potential for other offshore windfarm projects around the Manx coast.

Tynwald members have been given legal advice not to comment on Ørsted’s windfarm proposal so as not to prejudice the application process.

But Dr Allinson, who has announced he is not seeking re-election in September, clearly felt he is now free from that restraint, telling a special issue hearing that he wanted to emphasis Mooir Vannin’s benefits to the public finances.

He told the hearing at the Comis Golf Club - the last to be held as part of the public examination - that the island has experienced real-term contraction in its economic output.

Inflation-adjusted GDP fell by 5% in 2022-23 and by an additional 2.5% in 2023-24, he said, and the level of government reserves has also decreased in real terms.

Dr Allinson said the government’s economic strategy included a commitment to generate an extra £200m in income to reinvest in public services - and it was clear the potential financial and economic benefits from offshore wind was an achievable way of meeting this target.

Ørsted’s project - the island’s first offshore windfarm if approved - will see 87 turbines constructed six to 12 miles of the east coast.

It says the project could cut electricity bills by up to 15% and generate around £2bn for the Manx exchequer in combined taxation and rent over its 35-year lifespan.

But Dr Allinson indicated that if Mooir Vannin is approved, other offshore windfarms could follow.

He said the Global Wind Energy Council had previously estimated that the Isle of Man has the technical potential to deliver nine gigawatts of offshore energy, with the 1.4GW Mooir Vannin proposal being the first to prove the concept of such developments in Manx territorial waters.

The option fee potential for the Isle of Man is ‘considerable and would significantly transform our economy and island finances’, he told the hearing.

Dr Allinson said Tynwald members have been given legal advice regarding commenting on Ørsted’s application.

‘I respect that,’ he said. ‘However, I would like to take the opportunity to emphasis the fiscal and economic importance of the Mooir Vannin project to the sustainable economic future of the island.’

He said it could encourage further projects around the island which he said will ‘transform our economy’.

And he warned: ‘Unless our island innovates, invests and diversifies its economy we will continue along the path of managed decline which will ultimately disadvantage all our community.’

Manaka Sahai, chairman of the independent panel tasked with making a recommendation to the Council of Ministers, said she would welcome Dr Allinson’s perspective into the examination.

But another speaker, David Owens, told the panel: ‘I think Dr Allinson, with respect, has just explained why he has resigned as MHK.’

Asked to clarify the position with option fees, Dr Allinson told IoM Today: ‘It is my understanding that option fees for offshore wind developments are typically payable annually in advance throughout the development phase, from the signing of an Agreement for Lease until the project reaches a Financial Investment Decision or secures a full seabed lease.

‘In 2015, the Isle of Man Government granted Danish energy giant Ørsted (formerly DONG Energy) a seabed lease to explore the viability of an offshore wind farm off the island's east coast.

‘The details of this are still viewed a being commercially sensitive and confidential but the lease was signed before there was any obvious access to the British market as energy generated outside the UK territorial waters is not eligible for Contracts for Difference (CfD) which guarantee a financial return on investment.

‘This preceded the ScotWind (2022) leasing round and Round 4 auction (2019-2020) which were managed by the Crown Estates and attracted significant interest and revenues.’