Viking Energy is “very disappointed” but still “committed” to developing its proposed 103-turbine windfarm in the Central Mainland, after missing out on a contract to generate renewable energy.
Despite the setback windfarm partner Scottish and Southern Energy (SSE) insisted the project would “ultimately” provide clean energy security and bring economic benefits for the isles.
The latest round of allocations in the UK governments Contract for Difference (CfD) scheme was announced this morning. Twelve projects were awarded contracts including six in Scotland.
Viking has issued a statement in reaction to the news that it is not one of them.
“Viking Energy Shetland (VES) is very disappointed with the outcome of the CfD auction but it remains committed to the project and will continue to work with Viking Energy Wind Farm to explore all possible options to enable the windfarm to be built.”
VES spokesman Aaron Priest said: “Shetland needs to reap the benefits of its world-class renewable energy resources. Shetland’s economy is over-dependent on oil and gas and has a fundamental need to diversify.
“Future generations in Shetland deserve the chance to utilise our abundant clean energy resources to create a new industry, jobs and prosperity in this community. We want to build a Shetland economy that is truly sustainable”.
SSE also reacted to the development expressing its disappointment. SSE Renewables is the powerhouse behind the windfarm plans and after taking over Shetland Charitable trust’s share in the project will provide any future funding for the scheme.
“SSE Renewables is disappointed it has been unsuccessful in securing a Contract for Difference (CfD) for its Viking windfarm.
“The auction cleared at strike prices of £41.61/MWh and £39.65/MWh. In keeping with its principle of financial discipline, SSE Renewables’ bid for Viking windfarm in the CfD auction was carefully considered so as not to take on inappropriate risks or accept returns on investment that are financially unsustainable.
“Viking windfarm, located in Shetland, has been developed by a partnership between SSE Renewables and Viking Energy Shetland (VES). In May 2019, the partners agreed that SSE will provide all future financing required to deliver the windfarm, with VES benefiting from a preferred return on its investment if the windfarm is built.
“The 103-turbine project has a planned capacity of up to 457MW, which is enough to power around half a million homes and avoid over half a million tonnes of CO2 emissions per year.”
“Viking is an important project that will ultimately contribute to Scottish and UK zero-carbon goals and will also underpin a new transmission link to the remote islands, providing security of clean energy supply and transformative economic benefits to island communities.
“SSE Renewables is committed to delivering this project. Central to progressing this project is the result of Ofgem’s consultation on Scottish Hydro Electric Power Distribution’s proposed contribution towards the new transmission link for Shetland.”
Steven Coutts, Leader of Shetland Islands Council, said: “Shetland still has a pressing need to diversify its economy. The development of renewables and the related interconnector remain a vital opportunity for our community.”
Shetland Islands Council’s political leader, Steven Coutts, said: “The council understands that SSE and Viking Energy Shetland remain committed to the project and will continue to work together to explore all possible options to enable the wind farm to be built.
“We understand that this will be dependent on Ofgem providing clarity on the financial contribution it intends to approve towards the cost of the Shetland electricity transmission link, recognising that an interconnector will be key infrastructure in securing electricity supply in Shetland for decades to come.”