Scoop - Christmas Hampers and Gift Boxes
Ocean KineticsOcean KineticsOcean KineticsOcean KineticsOcean Kinetics

Energy / Yell wind farm team remain upbeat despite recent Viking setback

The 29-turbine Energy Isles wind farm, which could cost around £160 million, has the backing of Norwegian energy giant Statkraft

The Energy Isles team. From left to right: Derek Jamieson (director, Energy Isles Limited), Guy Nicholson (Europe grid manager, Statkraft), Richard Mardon, (head of onshore wind, Statkraft UK), David Flood, (managing director, Statkraft UK), Olav Hetland (senior vice president, Statkraft), Charlotte Healey (project manager, Energy Isles Shetland Limited). Photo: Ben Mullay

PLANS for a 29-turbine wind farm in Yell remain on track despite other renewable developments in Shetland like Viking Energy failing to win government support last month, according to its developer.

Statkraft UK managing director David Flood said during a visit to Shetland on Thursday that it is hoped the Energy Isles project will bid for future Contracts for Difference (CfD) subsidy auctions.

It comes after the 103-turbine, 457MW Viking Energy wind farm and smaller Peel Energy projects in Yell and outside Lerwick failed to secure vital support in the CfD process, which is the government’s main mechanism for supporting new low carbon electricity generation.

At the moment a proposed 600MW, HVDC interconnector linking Shetland to the national grid via Caithness – which is necessary for any large wind farm to go ahead – hinges on the Viking project getting the go-ahead.

Energy Isles board members, Statkraft representatives and some of the wind farm’s shareholders in Yell on Wednesday. Photo: Ben Mullay

The up to 200MW Energy Isles project – which recently saw Norwegian energy giant Statkraft sign on as a development partner – has yet to receive consent from the Scottish Government and as such it was not eligible for the last CfD round.

The next auction is set to take place in 2021 and Flood confirmed that Energy Isles is hoping to take part.

“Hopefully we’ll be eligible for either the next one or the one after,” he said.

“At the moment, our focus is on designing the right project that fits with the community and maximises the benefit to the community. We’ll think about those things a little bit further down the road hopefully.”

Referring to the chances of Energy Isles securing subsidy after Viking and Peel failed to do so, Flood said that Shetland projects should be more appealing to the government if a grid connection is in place.

“Shetland and Yell particularly is an excellent site for renewable energy,” he said.

“The wind resource is excellent. Once we have the grid connection sorted we do believe that projects will be very strong and very viable and able to deliver a lot of benefits to the community.”

Statkraft’s Europe grid manager Guy Nicholson reiterated the company’s view that Shetland is best served with an interconnector with a capacity greater than 600MW, taking into account the potential output of the projects already consented on the isles.

These are Viking Energy (457MW), Beaw Field in Yell (72MW) and Mossy Hill near Lerwick (50MW).

The area in the north of Yell earmarked for the Energy Isles development. Image taken from the Energy Isles environmental impact assessment report.

The Energy Isles team have pressed energy regulator Ofgem – which is yet to make a final decision on Shetland’s future energy needs – to consider a cable with a capacity of 800MW or even 1,000MW.

“We are pushing for a larger link to the built, simply because that is cost effective in terms of pounds per megawatt,” he said.

In an Energy Isles submission to an Ofgem consultation earlier this year on Shetland’s energy needs, the company also claimed a second 600MW cable linking the isles with the Scottish mainland has been proposed.

In the National Grid’s latest transmission works register report, published on 4 October, there is mention of a second HVDC link between the planned station at Kergord and Rothienorman in the North East of Scotland.

National Grid is considering this possibility because of the first one being potentially oversubscribed.

“There is already a second cable on that register which is linked to wind farms here,” Nicholson confirmed.

“That’s been proposed [by Scottish Hydro Electric Transmission], but who knows what that means at the moment. There’s a lot of works that get put on the register which change over time.”

Flood, meanwhile, confirmed that the total capital expenditure of the Energy Isles project would be around £160 million.

“Statkraft finances our projects from our balance sheet – we don’t borrow money from banks,” he said.

“We use our own capital in order to build our projects, which allows us to be very flexible and very quick in moving towards investment decisions on projects, so that would be our approach to this project as well.”

He confirmed that Energy Isles Ltd – a company made up of 54 largely Shetland based businesses acting as shareholders – will remain the same despite the deal for Statkraft to become a development partner.

The Energy Isles board and Statkraft were in negotiations for the “best part of a year” before the contract was signed.

Flood said the shareholders of Energy Isles Ltd – which include companies like Delta Marine, L&M Engineering, NB Communication and Nordri – “continue to be fully involved in the project”.

“Statkraft has bought the project from Energy Isles and will be taking the project forward in partnership with Energy Isles Ltd,” he said.

The proposed wind farm, meanwhile, has so far received objections from a number of sources, from Yell Community Council to Shetland Amenity Trust and Scottish Natural Heritage.

Energy Isles Shetland Ltd project manager Charlotte Healey, from Statkraft, said the development would continue to liaise with consultees as the plans develop.

“We’ve tried to maintain a very close relationship with statutory consultees and local people to try to design a scheme that best fits that area, and we continue to do as a team going forward, to take on those concerns and build those into the project,” she said.

“We started with a very large wind farm in the beginning and through our consultation with SNH and SEPA and different statutory consultees and Shetland Amenity Trust, we’ve really tried to take those on board and we have a much reduced scheme now.

“The environmental statement contains all the work we’ve done to date to address those concerns – all the studies we’ve done, and everything like that, which provides information on those concerns. We’ll continue to do so and work with those consultees to address those concerns.”

She added that the team hope to receive a decision from Shetland Islands Council planners in early to mid 2020, with the matter then progressing to the Scottish Government’s Energy Consents Unit.

Energy Isles director Derek Jamieson, meanwhile, pointed to the job hours which could be created if the wind farm goes ahead, as well as the community benefit money of up to £1 million which could come to Yell, Unst and Fetlar each year.

“What we’re looking to do is create a wind farm to generate carbon free energy with an associated community benefit fund, and also the other income for Shetland, so that’s the kind of things I think is very important to get across,” he said.

General Election - 12 December 2019