Alan Simpson
Scotland is set for a multi-million pound renewable energy boom which
experts say will transform local communities.
UK Ministers yesterday announced that wind power projects on some of
Scotland’s furthest-flung outposts will be able to apply for subsidies
which would remove the element of financial risk that comes with building
away from the mainland.
The amount of offshore wind around the UK is also set to double in the next
decade after the Government confirmed support for the industry.
A new auction for companies to bid for subsidies for offshore wind farms
will take place in May next year, with auctions every two years, providing
up to £557 million in support.
Island schemes will become eligible for a “Contract for Difference” (CfD)
with the UK Government, which covers the shortfall between the cost of
investing in infrastructure in remote locations and the average market
price for electricity in the UK market.
This ensures electricity generators have stable revenues while customers
are insulated against rising bills.
Many Scottish islands are ideal locations for the development of wind power
given their naturally stormy environments.
Now ministers have announced that for the first time, onshore wind farms on
remote islands such as Shetland and Orkney will also be able to compete in
the auctions.
The move could deliver up to an additional two gigawatts (GW) of offshore
wind per year in the 2020s, to bring total capacity up to 30GW by 2030 from
current levels of 7GW in operation, and 7GW in construction or with contracts.
That will be enough to meet more than a third of the UK’s power needs,
boosting jobs and cutting costs for consumers, industry bosses said
Industry body RenewableUK’s chief executive Hugh McNeal said: “Boosting our
ambitions for offshore wind is win-win for consumers, as the industry’s
success at cutting costs mean that offshore wind is now one of the cheapest
options for new power in the UK.
“Today’s announcement confirming the budget and timing of new auctions,
sets us on the path to deliver the tens of billions of pounds of investment
that will be needed to meet our ambition of at least 30 gigawatts by 2030.
“This is good news for domestic supply chain which can look forward to a
pipeline of new offshore wind projects that will support tens of thousands
of jobs across the UK.”
The auction system has seen the price for electricity from offshore wind
more than halve in just a few years to as low as £57.50 per megawatt hour
of power.
One scheme which could see a huge benefit from securing a CfD is the
proposed Viking windfarm on Shetland, a 103 turbine windfarm being built by
the community in partnership with power company SSE.
Shetland’s vast oil fund which was set up in the late 1970’s has a half
stake in a planned 103 turbine wind farm on the islands which would raise
around £10 million a year for the local community.
UK Government Minister for Scotland Lord Duncan said: “Wind projects in the
remote islands of Scotland have the potential to generate substantial
amounts of electricity and cut emissions, supporting economic growth and
delivering lasting benefits for communities.
“Enabling these projects to compete in future auctions will reinforce the
UK’s position as a world leader in renewable generation, as well as
providing Scottish jobs in any projects supported.
“I urge local communities, developers and other stakeholders to work
together to ensure that such projects deliver lasting benefits to the
islands.”
Energy and Clean Growth Minister Claire Perry said: “The UK renewables
sector is thriving, with more offshore wind capacity here than anywhere
else in the world and 50% of electricity coming from low-carbon sources
last year in what was our greenest year ever.
“For the last decade the Offshore wind industry has been a great British
success story: increasing productivity, raising earnings and improving
lives in communities across the UK; and today the sector gets the certainty
it needs to build on this success through the next 10 years.”
Sir John Armitt, the chairman of the Government’s independent advisory
National Infrastructure Commission, welcomed the announcement of a
long-term pipeline of support for offshore wind, which he said would help
give investors confidence in the market and maintain the UK’s leading
position in the sector.
But he urged: “But if renewables are to make up at least 50% of our energy
mix by 2030, I would urge ministers to go even further and extend this
support to other technologies including onshore wind and solar power.”
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