Scotland is set for a multi-million pound renewable energy boom which experts say will transform local communities.

UK Ministers yesterday announced that wind power projects on some of Scotland's furthest-flung outposts will be able to apply for subsidies which would remove the element of financial risk that comes with building away from the mainland.

The amount of offshore wind around the UK is also set to double in the next decade after the Government confirmed support for the industry.

A new auction for companies to bid for subsidies for offshore wind farms will take place in May next year, with auctions every two years, providing up to £557 million in support.

Island schemes will 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.

Now ministers have announced that for the first time, onshore wind farms on remote islands such as Shetland and Orkney will also be able to compete in the auctions.

The move could deliver up to an additional two gigawatts (GW) of offshore wind per year in the 2020s, to bring total capacity up to 30GW by 2030 from current levels of 7GW in operation, and 7GW in construction or with contracts.

That will be enough to meet more than a third of the UK's power needs, boosting jobs and cutting costs for consumers, industry bosses said

Industry body RenewableUK's chief executive Hugh McNeal said: "Boosting our ambitions for offshore wind is win-win for consumers, as the industry's success at cutting costs mean that offshore wind is now one of the cheapest options for new power in the UK.

"Today's announcement confirming the budget and timing of new auctions, sets us on the path to deliver the tens of billions of pounds of investment that will be needed to meet our ambition of at least 30 gigawatts by 2030.

"This is good news for domestic supply chain which can look forward to a pipeline of new offshore wind projects that will support tens of thousands of jobs across the UK."

The auction system has seen the price for electricity from offshore wind more than halve in just a few years to as low as £57.50 per megawatt hour of power.

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.

Shetland’s vast oil fund which was set up in the late 1970’s has a half stake in a planned 103 turbine wind farm on the islands which would raise around £10 million a year for the local community.

UK Government Minister for Scotland Lord Duncan said: "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."

Energy and Clean Growth Minister Claire Perry said: "The UK renewables sector is thriving, with more offshore wind capacity here than anywhere else in the world and 50% of electricity coming from low-carbon sources last year in what was our greenest year ever.

"For the last decade the Offshore wind industry has been a great British success story: increasing productivity, raising earnings and improving lives in communities across the UK; and today the sector gets the certainty it needs to build on this success through the next 10 years."

Sir John Armitt, the chairman of the Government's independent advisory National Infrastructure Commission, welcomed the announcement of a long-term pipeline of support for offshore wind, which he said would help give investors confidence in the market and maintain the UK's leading position in the sector.

But he urged: "But if renewables are to make up at least 50% of our energy mix by 2030, I would urge ministers to go even further and extend this support to other technologies including onshore wind and solar power."