Long-term support for island wind projects

WIND FARM projects in Shetland, Orkney and the Western Isles will be able to compete for subsidy well into the 2020s, the UK government confirmed on Monday.

During a visit to the Offshore Renewables Catapult in Newcastle, energy and clean growth minister Claire Perry said that the government intends to run the Contract for Difference (CfD) auction every two years after 2019.

And she confirmed that the next round CfD competition would open in May next year.

Shetland based Viking Energy as well as Peel Energy are both working toward participating in that round after the CfD process became available for island wind projects in December last year.

The minister said: “We plan to set out the parameters of the next auction later this year.

“But we understand that to make meaningful long-term investments, industry needs clarity over years, not months.

“That is why we are also announcing the intention to run subsequent auctions around every two years after that, using the £557 million that we have already announced.”

The second CfD auction in 2017 saw the clearing price for offshore wind halving to £57.50/MWh in just two years.

Scottish energy minister Paul Wheelhouse welcomed the announcement, which he described as overdue.

“Today’s announcement is overdue, but belatedly provides these groups with a long term commitment – something we have long called for from UK ministers,” he said.

“Both will now be able to plan investment into the next decade with confidence, and benefit the Scottish supply chain, and we therefore welcome that progress from Claire Perry, today.

“However, much more still needs to be done. As I have said to both Ms Perry and secretary of state, Greg Clark, onshore wind remains one of the most significant, efficient and cheapest providers of renewable energy, and must be given its own route to market opportunity, to overcome investor uncertainty created by UK Ministers since 2015.”