Huge Scottish wind farm development paused over 'unfair' transmission charges
Those behind the project say they are being ‘penalised’ by the transmission charges system
One of the biggest ScotWind-funded wind farms has been shelved over “unfair” transmission charges.
The developers behind the 125-turbine West of Orkney wind farm say they will not be progressing with the project, which would generate enough electricity to power 2 million homes by 2029, unless transmission charges are overhauled.
They say the cost of connecting to the network makes it impossible to compete against other projects being proposed in England.
This is the second ScotWind-funded project to be paused in a matter of months after the CampionWind development was handed back to the Crown Estate in November after Shell pulled out of the project.
ScotWind funding is money generated from leasing the seabed for offshore wind farms - the revenue was initially intended to be spent on green infrastructure projects and the just transition, but the Scottish Government has used it to plug gaps in day-to-day spending in the past.
Transmission charges are imposed on power generations to help maintain cable and pylon networks across the UK.
However charges are much lower in London and the south of England as the electricity is travelling the shortest distance to reach large population centres. Charges are highest in the north of Scotland and Argyll and can increase generation costs by up to 30 per cent.
Stuart McAuley, project director for the West of Orkney development, said: “[The north of Scotland] is where the highest wind speeds are, and therefore the highest resource for renewable energy.
“However, with the existing system we are penalised for that.”
The project is being developed by a consortium of Corio Generation, TotalEnergies and Renewables Infrastructure Development Group. So far a total of £100 million has been spent on the wind farm, which is located in waters west of the Orkney mainland and north of the coast of Sutherland.
If the project goes ahead, cables on pylons would carry the electricity generated from Caithness to Peterhead, where it would then travel by subsea cable to Lincolnshire in England.
Mr McAuley added: “At the moment, the investment has to stop, into the project, until we can see a clear route to market.”
This comes after the UK Government announced last week that it had guaranteed a minimum price for the electricity generated from the Berwick Bank wind farm off the coast of East Lothian.
Once built, Berwick Bank will be the largest offshore wind farm in the world - the West of Orkney wind farm will be about half the size.
When announcing this project, UK Energy Minister Michael Shanks said the UK Government was looking at the issue of transmission charges as part of a review into electricity markets.
He said: “At the moment it is market signals that drive this.
“We actually think we should take a much more holistic, strategic approach and say ‘where do we want power, where does it benefit the system?”
Scottish Renewables has warned that transmission charges are making it too expensive for most new projects to be built in Scotland, especially those in the north of Scotland.
Claire Mack, CEO of Scottish Renewables, said: “If we look at the economics around that project versus some others, we can see there are many in the same boat.
“That’s deeply worrying for me because I want to see Scotland being at the heart of the energy mix.”
Emma Roddick, SNP MSP for the Highlands and Islands, said: “The UK energy market is broken and is penalising Scotland’s energy producers simply for being in Scotland.
“But it’s not just the energy producers that are affected here - it’s jobs, it’s investment, and ultimately, higher costs of production means higher costs for customers.
“This just proves what we all already know - that Scotland’s energy must be in Scotland’s hands.
“Orcadians should see the benefit of developments near them, which is why the SNP wants to increase the community benefit of renewables projects.”
Scottish Energy Secretary Gillian Martin said: “This announcement from the West of Orkney wind farm clearly demonstrates the continued challenge posed by unfair and disproportionate transmission charges, which undermine a level playing field for Scottish projects.
“The announcement underlines the necessity of the UK Government taking decisive action to ensure the Scottish project pipeline can be deployed quickly to deliver the thousands of offshore wind sector jobs that can support a just transition.
“There must be a realisation by the UK Government that they will not reach Clean Power 2030 without Scottish projects and Scottish projects need fair transmission charges in order to succeed.
“Offshore wind presents an era-defining opportunity to grow our green economy for the benefit of communities across Scotland, while supporting our energy security and journey towards net zero.
“We will continue to do everything in our power to support the delivery of our offshore wind pipeline, including through strategic investment to anchor the supply chain and develop port infrastructure.”
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