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Continued uncertainty over strike price

THE UK Government has confirmed that it has not made up its mind yet on whether to allow a ‘remote islands strike price’ subsidy in the next auctioning round for large renewable energy projects, likely to be held in December.

The delay in getting EU state aid clearance for such a subsidy, designed to enable island based renewable energy project compete with UK mainland based developments, have left local projects in limbo.

Last week it emerged that despite pre-approval by the European Commission the UK government had yet to submit the formal application to Brussels.

Visiting Shetland on Monday, the UK secretary for energy and climate change, Amber Rudd, said the terms and conditions for the auction under the Contract for Difference process (CfD) would be announced soon.

Secretary of state for energy and climate Change, Amber Rudd, in Shetland on Monday - Photo: Mike Grundon/BBC

Pressed whether or not a strike price for remote island communities (Shetland, Orkney and the western isles) would be included in this, she said:

“We are still looking at how or whether it should be included in any auction going forward.”

She insisted that the UK government was fully committed to increase the renewables share in the energy mix while at the same time keeping prices low for consumers.

The energy secretary added that the government had confirmed to hold three more such auctions during the term of this parliament, and said the UK had already more offshore wind farms than the rest of the world.

She said she was aware of the 103-turbine Viking Energy project as she had had representation from local MP Alistair Carmichael, but she declined to comment further on individual projects.

While subsidies for smaller onshore wind farm project have been removed by the Tory government shortly after winning a majority at last May’s election, projects based on the Scottish islands are permitted to compete in the Contracts for Difference auction for large renewable projects.

Last week, a spokesman for Viking Energy said: “Viking, and other island projects, expect to compete in the next CfD auction which is to be held later in 2016.”