SCOTLAND’S islands are poised to share in a renewable energy boom which experts say could transform local communities.
Ministers have announced that wind power projects on some of Scotland’s furthest-flung outposts could soon be able to apply for subsidies which would remove the element of financial risk that comes with building away from the mainland.
It has been proposed that island schemes become eligible for a “Contract for Difference” (CfD) with the UK Government, which covers the shortfall between the cost of investing in infrastructure in remote locations and the average market price for electricity in the UK market.
This ensures electricity generators have stable revenues while customers are insulated against rising bills. Many Scottish islands are ideal locations for the development of wind power given their naturally stormy environments.
One scheme which could see a huge benefit from securing a CfD is the proposed Viking windfarm on Shetland, a 103 turbine windfarm being built by the community in partnership with power company SSE. Claire Mack, Chief Executive of Scottish Renewables, said: “The economic impact of deploying large-scale onshore wind on the remote islands may be transformational, with estimates that projects could be worth up to £725 million across the Shetland Islands, Orkney Islands and Western Isles.
“Seeing our island communities benefit from their substantial natural resource will also prove positive for many businesses across Scotland as these projects build their supply chains and create new jobs.”
A consultation on the proposal has now been opened, running until the 8th of March next year.
If island communities are allowed to apply for a CfD, they would share in a 557m pot, with the first projects going ahead in 2019. Western Isles MP, Angus MacNeil welcomed the announcement from the Department for Business, Energy & Industrial Strategy He said: “It is good that the CfD consultation is underway, it is something we have been looking at for a while. Minister for Energy and Industry Richard Harrington MP has kept his word since I spoke to him in July, progress is being made as planned and we are looking forward to this leading to the auction round in spring 2019.
“At a meeting last week with the Department for Business, Energy & Industrial Strategy I was assured that all islands had a big part to play in that.”
UK Energy Minister Richard Harrington said: “We’ve placed clean growth at the heart of our new Industrial Strategy. We are cutting emissions while keeping costs down for consumers, creating high value jobs and growing the economy.
“We are delivering on our commitment to support remote island wind projects, which have the potential to benefit local communities.”
UK Government Minister for Scotland Lord Duncan added: “Wind projects in the remote islands of Scotland have the potential to generate substantial amounts of electricity and cut emissions, supporting economic growth and delivering lasting benefits for communities.
“Enabling these projects to compete in future auctions will reinforce the UK’s position as a world leader in renewable generation, as well as providing Scottish jobs in any projects supported.
“I urge local communities, developers and other stakeholders to work together to ensure that such projects deliver lasting benefits to the islands.”
Analysiis: Announcement is a real vote of confidence for island renewables
By Drew Ratter
HAVING spent about 14 years involved in trying to get the Viking Energy project to fruition, this latest announcement from the UK government on arrangements for CfDs looks like a real vote of confidence for us, and for island wind in general.
I understand that the consultation is a technical matter, in order to amend some of the supporting legislation.
I chair the Investment Committee at Shetland Charitable Trust, where we control a 50 per cent interest in Viking Energy, in partnership with SSE. This may well be the biggest community-corporate energy partnership anywhere.
It means the Shetland community will own some 200 megawatts of generation, which will be fed into the UK national grid through a sub-sea cable.
A win for us, and a win for UK policy on green energy and climate change. Shetland’s wind resource is already known to be world-class, so we welcome the opportunity to bid into this CfD round.
Shetland, unlike everywhere else in Britain, has no existing connection to the wider GB electricity network.
The strictures resulting from managing an isolated island electricity network mean Shetland has only been able to develop 10MW of constrained renewable power and largely relies on burning expensive, heavily subsidised and polluting diesel fuel to meet its electricity needs.
The proposed link that Viking will enable will create opportunities for a real renewable industry to come into being in Shetland. Ofgem recently decided not to pursue an option to replace the aged diesel power station in Lerwick with a small, 60MW import only cable from Caithness.
This limited cable would have cost UK electricity customers £800m over 20 years in subsidies. The Government’s decision to include island projects in the next CfD auction means that, should the Viking wind farm secure a contract, a 600MW cable with an ability to export electricity from Shetland (as well as import it) will be built. Add to this the Shetland Charitable Trust will be able to extend its capacity to support the community, through care for the elderly, sport, the arts, amenity, and all the other things it does already, but more so. Good news indeed.
Drew Ratter is chairman of the Investment Committee of the Shetland Charitable Trust.
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