Viking Energy is gearing up to compete for a contract for difference (CfD) in next spring’s UK Government auction after it was confirmed that island wind projects will be invited to participate.
In an announcement, the Department for Business, Energy and Industrial Strategy (BEIS) said the third CfD allocation round is planned to open by May 2019 with a draft budget of £60 million available over two delivery years to support the development of up to 6 gigawatts of new renewable electricity generation.
Remote island wind projects are included in the list of Pot 2 “less established technologies” which are eligible to bid. In what will be a very competitive auction round, large-scale offshore wind farm projects are expected to be the main bidders, but Viking Energy can see opportunities for competitive Scottish island wind projects to secure contracts depending on the level of offshore wind participation. The benefits of supporting island wind will continue to be highlighted to the UK Government in the months ahead.
Other eligible technologies include wave and tidal stream developments, geothermal and biomass.
BEIS has set draft administrative strike prices “to enable the cheapest 25 per cent of projects within each technology” to have a chance of winning a contract. Island wind projects can bid in at up to £82 per MWh of electricity generated for projects coming onstream in 2023/24 or 2024/25.
Offshore wind developers can bid up to £56 per MWh for projects coming onstream in 2023/24 and £53 per MWh for those operating from 2024/25.
Viking Energy looks forward to the publication of the allocation framework, expected in the coming months, which will set out the rules for the third allocation round. Further rounds are expected every two years.
In the meantime, work continues to ensure that the Shetland supply chain has every opportunity to maximise its involvement in the construction and operation of the Viking Wind Farm. A second supply chain event is currently planned for Lerwick in spring 2019 to consider how local suppliers can provide the range of services required.