Hopes that the east of Scotland can become a leader in offshore wind power have been bolstered by the pre-qualification of three major turbine arrays for the new Contract for Difference subsidy scheme.
Officials at developer Mainstream Renewable Power believe their 450MW, 90-turbine Neart na Gaoithe windfarm, off Fife Ness, could be the first large-scale offshore windfarm to be built in Scottish waters, after it was one of those to be backed by Department of Energy and Climate Change.
Repsol and EDPR’s joint 1GW development at Inch Cape, which would see up to 213 turbines installed around 15km off the coast of Angus, was another to win support at the first selection stage, as was the similarly-sized Beatrice project proposed by SSE and Repsol for the Moray Firth.
Mainstream offshore chief executive Andy Kinsella said DECC inclusion of Neart na Gaoithe in its list of 16 projects to qualify for the Final Investment Decision Enabling for Renewables (FIDeR) process was a “significant step”.
The proposed array has also pre-qualified for backing from a UK Government infrastructure guarantee.
“Today’s announcement is a key driver in enabling Mainstream to reach financial close with the project in 2014 and to start construction in 2015,” Mr Kinsella said.
“The project remains on track to be the first large-scale offshore windfarm deployed in Scottish waters, and the first offshore windfarm in the UK to attract true non-recourse project finance at the construction stage.”
As The Courier revealed last month, Mainstream bosses hope they will receive consent for the £1.4 billion project from the Scottish Government before the end of the year, though they acknowledge this will likely prove “difficult”.
It is expected to boost the region’s economy by many millions of pounds and create hundreds of jobs during its construction and operational life.
The FIDeR announcement came amidst a raft of updates on Electricity Market Reform announced by UK Energy and Climate Change Minister Ed Davey, including revisions to the subsidy ‘strike prices’ to be guaranteed to operators of renewable energy installations from 2015.
Terms have been improved for would-be offshore wind operators since the DECC launched its consultation on the future of EMR in July, while onshore wind will have its subsidy support cut by £5 per MWh to £95 per MWh.
DECC said the updated contract terms could help investment in renewable electricity reach £40bn by 2020, with the deployment of 10GW of offshore wind capacity possible.
“Investors are queuing up to express their interest in these contracts,” Mr Davey said.
“This shows that we are providing the certainty they need, our reforms are working and we are delivering ahead of schedule and to plan.”
Niall Stuart, the chief executive of industry body Scottish Renewables, said DECC’s sharper-than-expected cut to support for onshore wind would result in some projects being abandoned, slowing progress towards decarbonisation targets.
But he welcomed changes to offshore support, which will guarantee expensive-to-build assets receive a higher level of support for longer.
“However, we are still at the earliest stages of developing offshore wind technology and scaling up the industry, and even if projects get consent there is no guarantee that schemes will proceed with the level of financial support outlined,” he warned.
Scottish Energy Minister Fergus Ewing welcomed the “modest” improvement in support for offshore wind, but said UK ambitions for the sector, plus wave and tidal energy, were ”pitched too low”.
“The risk remains that this support will not be sufficient to build capacity in the supply chain and attract the necessary levels of inward investment to Scotland,” he said.
Neart na Gaoithe, Inch Cape and Beatrice will enter a final selection stage later this month, with the first subsidy contracts expected to be signed in the spring.