Council awarded Contract for Difference for Orkney’s Community Wind Farm Project

Orkney Islands Council has been awarded a Contract for Difference (CfD) for the Quanterness and Hoy elements of Orkney's Community Wind Farm Project

The successful bidders were announced today by the UK Government Department for Business, Energy and Industrial Strategy.

Being successfully awarded a CfD means that the Council has been offered a guaranteed price for electricity generated over a 15 year timeframe, thereby reducing financial risk.

Securing a CfD will also help the projects to meet Ofgem's Needs Case requirements for securing a transmission connection - as the projects will no longer need to undergo a financial audit by Ofgem. The Faray site, which is yet to receive a planning decision from the Scottish Government, will require to undergo audit by Ofgem if it is to count towards the Needs Case.

The projects have been offered a price of £46.39/MWh. CfD awards are given in 2012 prices and then index linked - so this represents approximately £55.92/MWh in today’s money.

Locally, Orbital Marine has also been awarded a CfD for two tidal projects near Eday.   Onshore wind projects in Shetland and the Western Isles have also been successful.

Council Leader James Stockan has welcomed the news. He said: "Today's announcement represents a significant positive milestone for our projects - and I congratulate the team for this successful outcome in what is a very competitive market.

"Orkney's Community Wind Farm Project has been borne out of the Council's appetite and drive to make the very best use of our natural resources, to benefit everyone in Orkney.  

If the projects go ahead all profit would stay in the islands, enabling us to preserve and enhance key services that local people value and depend upon and provide a foundation for communities to drive transformational projects of their own. Due to the statutory restrictions around energy markets we wouldn’t actually be able to directly power Orkney homes, but what we can do is use the income creatively to improve life locally – including looking at ways to alleviate fuel poverty.

“The developments will also allow us to join other local developers in making a meaningful contribution to a Needs Case for a new interconnector for Orkney, thereby substantially supporting the vital renewable energy industry in Orkney. The wider economic development value of a new cable to Orkney could be highly significant, particularly if a substantial proportion of local ownership can be secured - which will help employment and income remain in the county.

"There's a long push up the hill yet though, with a decision yet to come from the Scottish Government on the Faray site - we look forward to hearing from them soon."