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Energy / Viking wind farm offered second government contract

A rural landscape featuring a house and several farm buildings in the foreground, with a large wind farm on the hills in the background under a cloudy sky.

THE VIKING Energy wind farm has been offered a second government subsidy award from a scheme which supports new renewable projects.

It was included in the UK Government’s latest auction results for its Contracts for Difference (CfD) scheme, announced today (Friday).

The latest Viking contract offer, for 15 years, covers 223.60MW.

The project, which is due to go live next year, was also successful in the price guarantee scheme in 2022 – for 220MW.

That means that the whole 443MW project is now covered.

Launched in 2014, the CfD scheme ensures projects receive a guaranteed price from the government for the electricity they will generate, giving certainty to developers.

The strike price listed for the new Viking award is £52.29/MWh, for the delivery year 2026/27.

The strike price for Viking’s 2022 award, which also covered 15 years, was for £46.39/MWh, also for the 2026/27 delivery year.

The large wind farm appears to be the only Shetland renewable energy project included in this year’s CfD allocation.

Statkraft’s planned Beaw Field (Yell) and Mossy Hill (outside of Lerwick) wind farms, which are smaller than Viking Energy, previously received a CfD award.

The latest CfD round had budget funding of £227 million and has secured enough to power the equivalent of two million homes, with 95 projects included.

Energy and climate change minister Graham Stuart said: “We are delighted that our first annual Contracts for Difference auction has seen a record number of successful projects across solar, onshore wind, tidal power and, for the first time, geo-thermal.

“This year’s record breaking CfD round builds on years of renewables growth under this government.

“Just seven per cent of our electricity came from renewables in 2010, yet in the first quarter of this year it reached 48 per cent and this first annual auction will allow us to go further in powering more of Britain from Britain.”

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Work has now completed on constructing all 103 of the Viking Energy turbines in Shetland’s Central Mainland.

The project remains on track for completion in late summer 2024, with commissioning works set to continue over the next year.

SSE Renewables has also been offered contracts for its Strathy South, Aberarder, and Bhlaraidh Extension onshore wind farm projects in the Highlands.

The company noted that no offshore wind projects were successful in the latest allocation round, “signalling a challenging time for the industry which is experiencing significant headwinds caused by inflationary pressure, commodity price volatility, interest rate raises and global competition”.

It added: “As a result, urgent reforms to the CfD scheme for offshore wind are now required to ensure that future auctions, notably Allocation Round 6 next year, deliver successful outcomes which boost energy security and benefit consumers.”

SSE Renewables managing director Stephen Wheeler said: “The CfD scheme has been a hugely successful mechanism for deploying renewable energy, but going forward, changes to the framework for offshore wind are required to ensure the UK can enhance its energy security whilst keeping costs low.

“Even at higher strike prices than AR5, wind power will still be far cheaper than other technologies while also delivering highly skilled green jobs and associated inward investment.

“The good news is that we now have a window of opportunity to ensure that the next auction round can bring forward the significant volumes of both onshore and offshore wind we need to achieve our energy security targets, unlock billions of pounds of investment, and enable the UK to retain its global leadership position in renewables.

“We stand ready to make these investments and look forward to working constructively with the Government to build on our past successes.”

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