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Viking approval secures £580m green recovery investment

June 17th 2020

SSE Renewables has taken a final investment decision to proceed with the Viking Wind Farm in a step which will drive forward economic growth and a green economic recovery in Shetland.

The 103-turbine, 443MW wind farm will harness Shetland’s excellent wind conditions to produce enough energy to power almost half a million homes. When complete, it will be the UK’s largest onshore wind farm in terms of annual electricity output, playing a crucial role in contributing towards the UK and Scotland’s net zero targets.

The project will support the supply chains in Shetland and the wider UK during delivery, creating around 400 jobs at peak construction with a further 35 full-time local operation and maintenance jobs throughout its life.

It also commercially underpins the proposed 600MW transmission link connecting Shetland to the GB electricity grid for the first time in its history, subject to a final decision by Ofgem.

Jim Smith, Managing Director of SSE Renewables said: “Viking Wind Farm will help kickstart the green economic recovery, bringing much needed low carbon investment to Shetland.

“This project will bring benefits threefold for the island; harnessing its renewable potential, securing its electricity supplies for the long term, and helping decarbonise electricity.

“After more than a decade working closely with the community we are delighted to reach this stage and be playing our part in Shetland’s net zero future.”

Scottish Government Energy Minister, Paul Wheelhouse, said: “This is excellent news for Shetland, and for Scotland’s renewable energy and climate change ambitions. The Viking wind farm project is also a great symbol for the green recovery that the Scottish Government is determined to foster and encourage, as we move through and beyond the current Coronavirus pandemic.

“This decision is of sufficient scale to act as the trigger to unlock the much anticipated major investment in a high voltage connection from Shetland to mainland Scotland, subject to a final decision by Ofgem which we expect shortly. It is essential that the community of Shetland benefits from this project and we look forward to further news of contracts being awarded to local businesses, as well as Scotland as a whole, during the construction phase.

“I am determined that this excellent outcome should be a starting point for similar investments and connections to unlock equivalent potential and benefits on the Western Isles and in Orkney.”

The wind farm project is wholly owned by SSE Renewables and is being developed with community partnership Viking Energy Shetland under the joint venture Viking Energy Wind Farm LLP (VEWF). An estimated £580 million will now be invested by SSE Renewables in the construction and delivery of the wind farm and associated infrastructure. Construction will start late summer and is expected to be completed in early 2024.

The decision to green-light the Viking project will unlock investment in low-carbon infrastructure, delivering a vital economic and jobs boost to the islands. Viking Wind Farm is the anchor project for the transmission connection from Shetland to the GB mainland, which will play a critical role in Shetland’s security of supply needs as well as giving scope for future renewable development.

VEWF and SSE Renewables now await the outcome of the consultation on Ofgem’s minded-to position to approve the transmission link, expected in July 2020. Final approval from Ofgem was conditional on Viking Wind Farm reaching a positive final investment decision which today’s announcement confirms. The transmission connection is critical for Viking wind farm to proceed.

SSE Renewables’ decision is conditional on the outcome of several industry code modifications which are currently in progress. These include the code changes which facilitate the contribution from the Distribution Network Operator, SHEPD, to the cost of the transmission link. Ofgem is expected to publish a decision on these ahead of the decision on the Needs Case.