A number of energy companies headed by SSE have written to the Secretary of State for Energy to put a case for island windfarm projects being allowed to participate in the Westminster government’s next renewable energy auction.
At stake is the future of Viking windfarm, which needs to be given the opportunity of bidding to supply power under a guaranteed-price contract for difference (CfD) before it can proceed and the vital interconnector linking the project to the national grid is installed.
The windfarm, according to joint-developer Viking Energy Shetland, will raise more money for the public purse in Shetland than the oil industry ever did. But its construction has been delayed by legal obstacles to the point that the government has changed its mind and now groups island windfarms the same as mainland projects.
The letter to Greg Clark, signed by Viking Energy among others, makes the case for island windfarms being treated separately from mainland wind power, which as a sector is not allowed to bid in the auction to provide part of the UK’s energy supply network.
Viking Energy Shetland’s head of development, Aaron Priest, said yesterday that the project’s secured future was vital for the long-term interests of Shetlanders.
Mr Priest said: “It’s crucial for Shetland’s wellbeing that we diversify our local economy. Part of that must be gaining a foothold in the renewable energy industry after effectively being denied the chance so far. The recent boom time was great for the local economy but we need to look at the long-term picture and right now Shetlanders are losing their jobs and expressing fears that there are few prospects on the horizon for them.
“In the background, our main industries face additional uncertainties with Brexit and the downturn in the oil sector. One constant is that Shetland has world-class renewable energy resources which have so much to offer this community for its future. Generations to come will rue the lost opportunity if we let this chance to create jobs and prosperity slip through our fingers.”
The letter is part of the consultation process launched by the government last year. Viking Energy will be among those making independent submissions to the government before the response deadline on Tuesday.
Opponents of the windfarm, including Sustainable Shetland, will be attempting to block Viking Windfarm by stating an opposite view.
Sustainable Shetland chairman Frank Hay declined to comment on the anti-windfarm group’s submission but said it would be fair to say it intended to block the massive 103 turbine development in central Shetland.
Yell Community Council and Peel Energy, which plans a 17 turbine farm at Beaw Field near Burravoe, also had nothing to say, although both will be among the groups responding before Tuesday.
After a period of turmoil following the resignation of Prime Minister David Cameron and the subsequent departmental shake up, the government reversed its position last year so that non-mainland onshore wind projects should not be classified as a separate technology nor allowed access to Pot 2, as the second tranche of low carbon auctions is known.
The letter highlights three main considerations about island wind projects and states: “We are calling on the UK government to classify non-mainland wind separately from mainland onshore wind and allow non-mainland wind to compete in the forthcoming Pot 2 auctions taking place during this parliament. This letter is intended to support the current consultation.”
It adds: “Firstly, non-mainland wind projects are significantly different to other onshore wind projects, across the key factors that determine how a technology should be classified for the Contracts for Difference (CfD) scheme. These differences mean that non-mainland onshore wind should be classified as a separate technology to onshore wind more generally. The charges for transmission connections are much higher for non-mainland wind projects, being around nine times that of mainland onshore wind and are comparable to the charges for offshore wind. The unique nature of these projects also include challenging development circumstances of remote island locations, with a subsequent higher cost base but also a greater wind resource, which is again more comparable to offshore wind. Taken together, these conditions mirror those encountered on offshore development sites, justifying the need for the islands projects to be classified as a ‘less established technology’, falling within Pot 2.
Secondly, they argue that island wind generation schemes could offer value for money energy generation schemes. Developers, the letter states, “have a more accurate view of costs and are now benefiting from lower cost of capital than was assumed when the remote island strike price was set at £115/MWh in 2014″.
“There is strong potential for non-mainland wind projects to be delivered at a lower cost than offshore wind projects in a future CfD auction, so non-mainland wind can substitute for a portion of offshore wind at lower cost, delivering a significant benefit to the consumer.”
A third benefit, the letter claims, is that non-mainland projects would boost the UK supply chain. And “crucially” would act as “an important bridge between onshore and offshore wind supply chains”.
It adds that Scotland has a “long tradition” of renewable energy development, with a world-leading skilled workforce capable of building projects at scale.
Remote island wind, it claims, is the next stage of the development of the industry and island sites are home to some of the best conditions in the world with high wind speeds and productivity capacity over 45 per cent “providing value for money to the consumer and enhanced decarbonisation benefits”.
“The resources on the islands are under-used and this is our opportunity to tap into them and bring jobs, low-carbon energy and a sustainable supply chain to remote parts of the UK,” it adds.