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Energy / Developers respond to Ofgem power link approval

Viking Energy must firm up its wind farm intentions first

Wind farm in ShetlandWind turbines. Photo: Shetland News

PLANS for large wind farms in Shetland have received a massive boost after energy regulator Ofgem announced that it has approved the proposed subsea transmission link between the isles and the Scottish mainland.

Ofgem’s approval is subject to evidence that the Viking Energy project – which has been dependent on the cable getting the green light – will go ahead.

The 600MW link would allow new wind farms in Shetland to export renewable electricity to the rest of Great Britain and help ensure supply of electricity on the islands through the import of power if needed.

The cable will also allow for electricity to be imported to Shetland and as such will give the isles energy security once the power station in Lerwick has been switched off in 2025.

In its consultation document on the final needs case, Ofgem states: “On balance, we consider that, subject to our conditions being satisfied, construction of the proposed link is likely to represent an economic and efficient outcome (in terms of long-term value for money) for GB consumers.”

Viking Energy welcomed Ofgem’s approval, saying in a statement that it was “fully committed” to the “the anchor project” underpinning the electricity transmission link which will connect Shetland to the wider British grid for the first time.

The statement continued: “This decision is now subject to a consultation and is another positive step after the contribution by Scottish Hydro Electric Power Distribution towards the capital cost of the new link was endorsed by Ofgem in December.”

It described Viking Wind Farm as a “consented and shovel-ready project” and the developers now awaited a timely final decision by Ofgem following the consultation.

It adds: “VEWF remains fully committed to building the Viking Wind Farm and intends to take its final investment decision as soon as possible. Early enabling work on the project had already begun but is currently paused due to the impact of Covid-19.”

Work is presently stalled owing to Covid-19.

As well as the Viking Energy wind farm, approved Peel Energy wind farms at Beaw Field in Yell and Mossy Hill, near Lerwick, as well as the planned Energy Isles wind farm in Yell, hinge on provision of an interconnector.

Smaller turbines have also been hindered from operating at full potential by the lack of a larger grid to feed into.

Energy Isles Shetland project director Charlotte Healey said: “Statkraft (Energy Isles’ Norwegian development partner) welcomes Ofgem’s position as we continue to work behind the scenes in the lead up to submitting further supplementary environmental information.

“The Energy Isles wind farm further adds to the overwhelming case for an interconnector between Shetland and Scotland, whilst also bringing significant economic and community benefits to the north isles and Shetland as a whole.”

One of the company’s directors, Derek Jamieson, added: “Onshore wind power has a crucial role to play in helping to tackle climate change in the years to come and this decision gives Shetland the opportunity to continue exporting energy to the wider world, diversifying our economy and creating opportunities for future generations.”

Rob Tate, development director at Peel L&P Energy, said: “A new undersea cable from the Shetland Islands to the mainland creates a real opportunity to unlock Shetland’s huge potential for green energy and will contribute significantly to Scotland’s goal of achieving net zero carbon by 2045.

“We welcome Ofgem’s minded to decision to support the cable’s construction as it’s a positive step forward for jobs and the economy and provides more certainty for our own wind farm projects on the Shetland Islands.

“We’ll now be reviewing the consultation documents to submit our response in the coming weeks.”

Energy Isles director Derek Jamieson. Photo: Ben Mullay

Ofgem last year asked Scottish and Southern Electricity Networks (SSEN) for revised plans for the cable after Viking Energy failed to secure government subsidy.

SSEN also welcomed the report and in a statement said that the link would “unlock Shetland’s renewable potential”.

It added: “The link would help address Shetland’s security of supply needs as well as offering Shetland’s oil and gas sector a unique opportunity to decarbonise its operational electricity requirements, delivering a whole system approach to support the transition to net zero emissions.”

Ofgem’s approval is subject to receiving sufficient evidence by the end of 2020 that the 457MW Viking Energy project is likely to go ahead.

Chief executive of Ofgem Jonathan Brearley said: “Ofgem’s immediate focus is to support the energy industry so it can respond effectively to the Covid-19 pandemic and ensure consumers, especially the vulnerable, are protected.

“Today’s announcement will help stimulate economic growth as the economy recovers from Covid-19, as well as unlocking Shetland’s potential to supply low cost renewable electricity for consumers across Great Britain.”

Frank Hay, the chairman campaign group Sustainable Shetland, welcomed the consultation but described the Viking wind farm project as a “huge gamble”.

A statement from Hay said that Ofgem were “quite capable of changing their mind.”

It added: “The consultation document states that approval is conditional on a decision on Viking being made by the end of 2020 and any possible subsidy for the project will still be uncertain as the next CfD (Contracts for Difference) auction is not scheduled until 2021. Once again, the project looks like a huge gamble.

“The current coronavirus crisis also adds more uncertainty as to the future for energy projects. Renewable projects come at a very high cost to consumers and will the country be able to afford such a remote and highly costly project like Viking?

“We welcome the fact that there is a consultation on this where we can, once again, highlight the many drawbacks about this project. We would hope that anyone who has concerns will respond to the consultation which is open until 18 June.”