Renewable subsidy change will not affect isles

A government decision to bring forward a change to the way wind farms are subsidised a year earlier than planned will have no impact on wind farm developments in Shetland, renewable energy developers have said.

Energy and Climate Change Secretary Amber Rudd announced yesterday that the Department of Energy and Climate Change (DECC) was ending its Renewables Obligation (RO) system for onshore windfarms next April. Affected companies will likely apply in future to the Contracts for Difference (CfD) scheme that is intended to increase competition.

However three major windfarms planned for Shetland – Viking, Energy Isles and Beaw Field – already plan to sell electricity under CfD and will be bidding in a separate “pot” of green energy suppliers including Scottish islands onshore windfarms and offshore windfarms. Mainland windfarms affected by the early closure of ROCs and who apply for CFD will be treated in a different band and may provide extra competition from existing onshore windfarms on the Mainland.

The developers are expecting more clarity over the next few months on exactly how CFD will operate in Scottish islands on the fate of the critical interconnector cable which is expected to be installed by 2020.

Aaron Priest head of development for Viking Energy Shetland said: “To be clear, this announcement has no effect on our plans to develop the Viking Energy Windfarm in Shetland.
“Viking is not an RO project and intends to submit a competitive bid for a “Contract for Difference” or CfD in the next CfD bidding round. As a remote island project, Viking is in a different CfD technology band from mainland located onshore wind and expects to compete on that basis.”

The Energy Isles consortium, which was formed to develop a large-scale wind farm in Yell and Unst, said the early ending of the renewables obligation mechanism would have no impact on its plans.

Energy Isles chairman Paul Riddell said: “Our project is dependent upon the interconnector that will come to connect the Viking Energy windfarm to the national grid, so it was always outwith the scope of the renewables obligation system which had been due to come to an end in 2017.
“We will work towards gaining planning consent and if we are successful will seek to bid in to the new auction process for a Contract for Difference. Both the UK and Scottish governments remain committed to renewables development in the Scottish islands.”

Development manager of Beaw Field Windfarms, which will be located near Burravoe, Bernadette Barry said: “Amber Rudd’s announcement has no bearing on the Beaw Field development as it is only relevant for those projects in a relatively advanced stage hoping to connect to the grid between now and April 2017.

“As Beaw Field is in the early stages of development (pre-planning) and is dependent on the construction of the interconnector it will not connect prior to 2020/ 2021, which is the current estimate for completion of interconnector, and so would not have been eligible under the RO scheme regardless of this announcement. We continue to await further announcements from the government on the interconnector and specific support for island renewables.”

Ms Rudd said that up to 5.2GW of onshore wind capacity could be eligible for “grace periods” which would be offered to projects that already have planning consent, a grid connection offer and acceptance, as well as evidence of land rights”.

The DECC will look at options to continue support for community energy projects, as part of the Feed-in Tariff Review later this year. It already announced measures in the Queen’s speech to change the law to give local communities the final say on onshore windfarm applications.
Scottish Energy Minister Fergus Ewing said the decision to axe Renewable Obligation Certificates a year early would have a “disproportionate impact on Scotland”.

Following reports in the media on this issue in recent weeks the Scottish government made representation to the UK government through letters and phone calls as well as raising it in the Scottish parliament. This included the request to ensure there was a sufficiently flexible grace period covering projects already in the planning system. This flexibility would ensure companies and communities were not penalised unfairly by the UK government policy change where they have already invested.

Mr Ewing said: “The decision by the UK government to end the Renewables Obligation next year is deeply regrettable and will have a disproportionate impact on Scotland as around 70 per cent of onshore wind projects in the UK planning system are here.

“This announcement goes further than what had been previously indicated. It is not the scrapping of a ‘new’ subsidy that was promised but a reduction of an existing regime – and one under which companies and communities have already planned investment.

“Onshore wind is already the lowest cost of all low carbon options, as well the vital contribution it makes towards tackling climate change, which means it should be the last one to be scrapped, curtailed or restricted.”