Scots to hold island RE summit

Early next year Scotland will convene a high-level summit between the UK government and the trio of councils governing the Shetland, Orkney and Western Isles, after recent decisions left the prospects for island renewables looking dim.

Scottish energy minister Fergus Ewing describes as a “missed opportunity” the recent update to the UK’s Contract for Difference (CfD) scheme, which confirmed a previous proposal to offer onshore wind farms on Scotland’s islands £115 ($188) per MWh from 2017/18.

While that is nearly 30% more than the £90/MWh that will be offered to onshore wind farms on mainland Great Britain from that same year, Ewing says the Scottish government had expected “different strike-price arrangements” for each of the islands, reflecting their different circumstances.

“The evidence suggests” that the £115/MWh offer will not work for many planned wind farms on the islands, Ewing claims.

Among the wind farms under development on Scotland’s remote but extremely windy islands are the SSE-led Viking project on Shetland and International Power’s Beinn Mhor project on the Isle of Lewis.

The case for island renewables in the medium term was further tarnished this week when Ofgem, the UK’s energy regulator, delayed by a year the publication date of a critical review into the way energy generators are charged for transmission. The review is now scheduled for publication in April 2015.

At present, UK generators are charged based largely on their distance from population centres, meaning that power plants in England pay much less for than those in mainland Scotland – to say nothing of the Scottish Isles.

A significant build out of wind, wave and tidal capacity on the islands would also require new subsea interconnectors linking to the mainland. But without a clear picture of the level of subsidy available to such projects and the transmission charges they will face, the investment case for such interconnectors is nearly impossible to make.

“The decision from the UK government could result in a huge missed opportunity if it does not work for all three of the Scottish Island groups,” says Ewing, who points to estimates that the islands could provide 5% of Great Britain’s electricity needs by 2030.

The issue is further complicated by Scotland’s planned independence referendum, whose implications for renewables and energy more broadly remain unclear.