GDF pulls Beinn Mhor from CfD race
GDF Suez-backed International Power has withdrawn its 140MW Beinn Mhor onshore wind project from the running for an early Contract for Difference (CfD), due to ongoing delays to the proposed interconnector running to Scotland’s Isle of Lewis.
The withdrawal potentially opens the door to other projects taking the early CfD budget that may have been allocated to Beinn Mhor.
Having originally named 16 renewables projects eligible for an early CfD, the UK in December said that just 10 of those were considered “provisionally affordable” and thus likely to win a contract.
Having an early CfD in hand may help developers secure financing for their projects.
Of the 10 projects deemed provisionally affordable, Beinn Mhor was the only one in Scotland – eliciting howls of protest from Edinburgh.
Three important Scottish offshore wind projects – Neart na Gaoithe (owned by Mainstream Renewable Power), Beatrice (SSE), and Inch Cape (Repsol and EDPR) – had made the list of 16 but were dropped when it was whittled to 10.
And it has now emerged that Beinn Mhor has pulled its name out of the running for an early CfD.
The list of provisionally affordable projects on the Department of Energy and Climate Change’s website has been narrowed to nine, with DECC stating that the list was amended on 4 February “following the withdrawal of one … applicant”.
The reason, according to GDF Suez, is that Beinn Mhor will not be in a position to patch into the grid on Great Britain in time to avail itself of the early CfD.
On 17 December – two days before DECC’s “provisionally affordable” announcement – SSE issued a statement saying that the planned subsea interconnector for the Isle of Lewis, upon which Beinn Mhor will rely, will not be complete until 2019.
The 450MW interconnector, which has been under development for a decade, was originally slated for completion in 2015, and then pushed back to 2016.
In addition to being the only Scottish project on the list of projects provisionally eligible for an early CfD, Beinn Mhor was one of just two onshore wind farms – the second being Ecotricity’s 66MW Heckington Fen project in England.
The Scottish government remains indignant with the UK’s treatment of and attitude towards renewables projects on three sets of remote islands – Lewis, Orkney and Shetland.
In December the UK confirmed a CfD strike price of £115 ($192m) per MWh for onshore wind on the islands – already a significant premium over onshore wind farms on Great Britain – but developers and the Scottish government had been pushing for £130/MWh in some cases to make projects economically viable.
Power plants in the UK are charged for their use of the grids based on their proximity to population centres, meaning that Scottish wind farms, and particularly in remote areas, must be significantly more profitable in order to cross the threshold of economic viability.