ONSHORE wind farms in Shetland and other Scottish islands have been given permission by the European Commission to compete in future Contracts for Difference (CfD) auctions.
Last year the UK government signalled its intention to allow island projects to bid for the subsidies in the next auction in spring 2019.
It needed state aid approval from the EU – something which has now been granted.
It is another boost for potential large-scale wind projects in Shetland such as the 103-turbine Viking Energy farm, which hinges on an interconnector cable being laid to the mainland to allow it to export energy.
The CfD auction would allow remote island wind projects to win a minimum price guarantee for electricity generated, meaning they would be more financially viable.
Head of development at Viking Energy, Aaron Priest, welcomed the news and said discussions are ongoing with the UK Government about the details of the CfD auction.
The decision, which the department for business, energy and industrial strategy said was "crucial to the future of clean growth" in the UK, was announced on Friday.
"It remains vital for Shetland's economic future that we're allowed the chance to diversify and develop a renewable energy industry," Priest said.
"We have an endless resource of wind, wave and tide and the Shetland community should get to use it to generate new jobs and income.
"The UK government's decision to allow island projects to participate in the next CfD round was pivotal and engagement with government on the detail is ongoing."
The Viking project already has the required consent from the Scottish Government, as does a 17-turbine wind farm in Yell proposed by Peel Energy.
A 63-turbine development in the north of Yell is currently in the pre-application phase as it seeks scoping opinion from ministers.
A UK government consultation on giving a proposed definition to remote islands wind projects and allowing them to compete against "less established" technologies in CfD auctions is ongoing until 9 March.