Scottish Power, Mainstream and SSE emerge as winners in energy supply auction, but there was disappointment for Repsol and EDPR in Moray Firth
The UK government’s new Contracts for Difference scheme saw energy producers agree a ‘strike price’ with the DECC to supply energy, but the slow progress in rolling out the scheme has hindered investment decisions on renewables projects in recent years.
The unsuccessful Moray Offshore Renewables bid (a joint venture between Repsol and EDPR) would have seen see three wind farms installed in the outer Moray Firth, with each wind farm playing host to up to 62 turbines.
SNP MSP Rob Gibson commented: “The Scottish Government rightly has ambitious targets to harness Scotland’s enormous renewable energy resources and MORL has a key part to play in that.
“But the Westminster Government’s failure to award MORL a contract to enable it to proceed is a bitter blow to the Highlands economy”.
Fellow SNP MSP Mike MacKenzie – who is also a member of the Scottish Parliament energy committee – added: “This failure to agree a contract with MORL is extremely disappointing.
“This is a key industry for Scotland and it is infuriating that time and again the Westminster Government is preventing investment going ahead and standing in the way of jobs being created.”
Also commenting on the outcome of the first Contract for Difference Auction, Scottish Energy Minister Fergus Ewing said: “It is very disappointing that two key Scottish offshore developments – Moray Offshore Renewables and Inchcape – have not been given the go-ahead by the UK Government.
“However I welcome the news that Neart na Gaoithe and the Scottish Power East Anglia Project has been awarded contracts to supply electricity. With Neart na Gaoithe (Mainstream) and Beatrice (SSE) we now have just over 1GW of offshore wind in Scottish waters with funding support which could generate enough electricity to power the equivalent of over 600,000 homes
“These announcement also shows that the price of onshore wind is now considerably cheaper than nuclear energy and I also welcome that the price of offshore wind has decreased significantly over the last year. The successful projects will also offer substantial opportunities for the supply chain which will help create and secure jobs in Scotland.
“We still have bigger ambitions for offshore wind with another 2,950MW of consented projects in Scottish waters – including Inch Cape and SeaGreen’s Alpha & Bravo. The UK Government must provide the confidence that sufficient money will be available to allow the offshore wind industry to move forward with assurance.”
The contract awarded to Mainstream under a competitive tendering process gives the wind farm an inflation-linked price for the electricity it produces for a period of 15 years.
Mainstream’s 450 megawatt Neart na Gaoithe offshore wind farm – which will consist of up to 75 turbines located some 10 miles off the Fife coast – will also create ‘hundreds’ of direct and indirect jobs during its construction as well as throughout its operational life.
Andy Kinsella, Chief Operating Officer, Mainstream, said: “What’s unique about this project is that it will be the first time a UK offshore wind farm of this scale will be built using project finance alone. “
The Neart na Gaoithe wind farm