Hundreds of millions of pounds of investment poured into the development of three proposed Scottish offshore wind farms over the last decade is at risk because of continuing delays in securing vital government subsidies.

Years of planning has so far gone into five massive multi-billion pound wind farms planned for Scotland's east coast.

But only two of the windfarms – the 664MW Beatrice project and the 448MW Neart Na Gaoithe project – have so far been successful in bidding for valuable government subsidies, which make projects commercially viable by guaranteeing the price at which electricity is sold for a 15-year period.

In the last Contracts for Difference (CfD) bidding auction held in 2014 the three other windfarms (Seagreen, Inch Cape and Moray Offshore) were unsuccessful and, since the Conservatives returned to power last May, no further auctions have been held.

Michael Brown, chief accountant of the 1116MW Moray Offshore project, told the Sunday Herald that £90 million has so far been spent by Portuguese developer EDP Renewables on project development costs and that at least one potential investor had withdrawn because of the extended funding uncertainty.

Since failing to obtain a subsidy contract in 2014, Brown said, the company has had to maintain an Edinburgh office employing 40 people “who are doing pretty much zero at the moment as the project is on hold”. “We are having to spend several million pounds a year just to stand still,” he said.

Brown said it was frustrating that, although the UK government in November said it would hold a further bidding auction, no budget or date have so far been set, which makes it impossible for the company to plan ahead.

“We invested heavily in the initial stages of our project to be as competitive as quickly as possible but there has been no reward for our early enthusiasm. We narrowly missed a CfD in the first auction and we have been waiting ever since,” he said.

While industry insiders are speculating that another auction could be held towards the end of this year, the result is unlikely to be announced until 2017.

As consent to build the Moray project will expire if construction has not started by March 2019, the worry is that the company will not have enough time to secure investors and make a final investment decision if the next auction is not held before the end of this year.

Lindsay Roberts, Senior Policy Manager at Scottish Renewables, said that there was disappointment within the industry that only two of the five offshore wind farm project have been able to secure contracts to allow them to go to construction.

“Clearly there is frustration for the remaining projects,” she said. “Well over a year after being granted planning they are still are waiting for their opportunity to compete for contracts through allocation rounds for which no firm dates have been set.

“It is now imperative that the UK Government commit as soon as possible to a detailed timescale for the next round, and let developers know how much money will be available in it.”

The UK has more installed offshore wind turbines than any other country in the world with around 20 wind farms dotted around the English and Welsh coasts totalling 5GW of installed capacity. This is expected to rise to 11GW by 2020, at which point it is expected to account for around 36 per cent of global offshore generation capacity.

However, with the exception of a small number of test turbines on the east coast there is currently only one commercial-scale offshore wind farm partially in Scottish waters, the 180MW 60-turbine Robin Rigg farm in the Solway Firth which is connected to the National Grid in England.

Two of the five proposed Scottish offshore windfarms are in the Outer Moray Firth (the Beatrice and Moray Offshore wind farms) and three east of the Firth of Forth and the Firth of Tay (Inch Cape, Neart Na Gaoithe and Seagreen). If all five are built they would have a combined capacity of 4062MW.

The neighbouring Beatrice and Moray Offshore wind farms off the Caithness coast would involve a total of 326 turbines which, taken together, would be the world's third largest offshore wind farm: far larger than the 175-turbine London Array, which is currently the largest UK wind farm.

Last week the £2 billion Neart na Gaoithe development took a step forward with the announcement that an equity consortium is now in place.

Global wind and solar company Mainstream Renewable Power said it was in exclusive discussions with the equity consortium which is led by power company InterGen, whose European headquarters are in Edinburgh.

The consortium – which includes Siemens Project Ventures, The Marguerite Fund and Infrared Capital – would take the proposed wind farm off the coast of Fife to financial close and to construction.

The Neart na Gaoithe project secured a CfD from the UK’s National Grid last year which will assure an inflation-linked strike price for electricity produced for 15 years.

The project is expected to be fully commissioned and generating electricity by 2020, subject to the outcome of a judicial review lodged by the RSBP, which is currently under consideration by the Scottish courts.

Speaking on Tuesday at the Scottish Renewables Offshore Wind Conference in Glasgow, Mainstream’s Chief Operating Officer Andy Kinsella said that the wind farm would create over 500 jobs during construction and over 100 permanent jobs during its 25-year operational phase.

Small-scale green energy schemes take a hit from tariff cuts

New figures released to the Sunday Herald show that the electricity generation subsidies paid to small to medium sized green energy schemes will fall an overall 64 per cent when they are introduced next week.

David McGuire, a Glasgow-based solicitor with Scottish law firm MacRoberts, is warning that new Feed-in-Tariff subsidies which were slashed by the UK Government last month will mean that many small-scale wind developments in the planning pipeline will no longer be viable.

McGuire believes that, while there will be a small number of winners (such as the tariff for large-scale hydro developments which will rise 82 per cent) most of the tariffs paid to the owners of solar, wind, hydro and anaerobic digestion installations will be cut.

“Community schemes in particular will be hardest hit, as they are most likely to fall foul of the strict new caps,” McGuire said. “Opportunities remain, but largely for small-scale developments in the windiest places with an easy connection to the national grid.”

“These are aggressive, ambush changes to the tariffs which will have a significant impact on the renewable sector, jobs and investment but a negligible impact on consumer bills.”

McGuire said that, before the changes, the tariffs paid for roof-top solar installations would pay for themselves in eight to 10 years, but under the new tariff it would take around 14 years.