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UK government proposes extra incentive to bring Scottish island renewables onstream

Published on May 16th 2014

The UK government is proposing a further incentive for Scottish island wind power projects like the Viking Wind Farm because their success could cut costs for the renewables industry and help it diversify.

In a consultation launched this week the Department of Energy & Climate Change (DECC) says “considerable longer term benefits” could flow to the renewable energy sector from “new and innovative technologies” delivered by projects in Shetland, Orkney and the Western Isles.

Specific benefits pinpointed include:

• Knowledge gained from use of large-scale turbines onshore for the first time to generate maximum electricity from windy locations; [1]

• Expertise developed from using multi-terminal undersea high-voltage direct current cabling (HVDC) could cut costs for future electricity interconnectors, including links from offshore wind farms and across the EU;

• Infrastructure put in place to support future wave and tidal stream projects in the islands.

DECC says island wind projects combine factors which make them “unique within the UK” with expected high transmission costs, high load factors from the abundant wind and the potential for large projects to “make a major contribution to the UK’s renewable generation targets in the immediate and the longer term”.[2]

The consultation document Electricity Market Reform: Allocation of Contracts for Difference states: “We propose to continue to treat wind generation on the Scottish islands as a new and innovative technology, distinct from onshore wind located elsewhere in the UK.”

To help ensure projects like Viking Wind Farm go ahead, DECC proposes shielding island wind developers from direct competition for government support under the Contracts for Difference (CfD) regime, which will apply to new renewables projects coming onstream from 2017.

More “established” technologies, like mainland-based wind farms and solar photovoltaic installations, will compete with each other for generation incentives. But DECC proposes that island developers sit in a separate technology grouping of their own or with “less established technologies”, such as offshore wind, wave and tidal stream power.

The UK and Scottish governments have already agreed to tackle the extra costs and challenges of developing wind power in the Scottish islands by backing an enhanced island “strike price”. This would guarantee a payment of £115 per megawatt-hour (MWh) under the CfD regime.

Commenting on DECC’s new consultation, Viking Energy development manager Aaron Priest said:

“We are encouraged by the launch of this consultation which is extremely welcome for Viking Energy and other island renewable developers. It is increasingly clear that both the UK and Scottish governments are fully committed to getting the islands connected, paving the way for Shetland to reap the benefits that the Viking project will bring.

“Another valuable part of that process took place in Shetland this week with a two-day visit from National Grid which had constructive talks with Viking Energy on the interconnector link to the Scottish mainland and visited the proposed wind farm site.”



[1] Viking Energy’s planning application was based on 3.6MW turbines, which would be amongst the largest turbines deployed onshore in the UK, although that size may not be ultimately chosen for the project.

[2] All DECC quotes from Electricity Market Reform: Allocation of Contracts for Difference, pages 10 and 11.

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