Orkney electricity transmission link worth up to £807 million to Orkney economy

A new electricity transmission link between Orkney and the Scottish Mainland could be worth at least £371 million to the Orkney economy, according to a recently commissioned study into the potential value of the cable.

This would rise to £807 million if the wave and tidal energy industry makes use of the cable too.

For Scotland the figures are a minimum of £606 million, rising to up to £1.48 billion.

The independent report – put together by specialists at global professional services firm GHD – also found that the three wind farms under ‘Orkney’s Community Wind Farm Project’ are vital in securing a cable for Orkney.

Ofgem has conditionally approved a Need Case for the new cable, requiring 135MW of new projects to trigger the 220MW cable. With just 45MW of projects currently consented, the 86.4MW that could be generated by ‘Orkney’s Community Wind Farm Project’ would make an essential contribution towards meeting this target.

Ofgem recently extended the deadline for the Needs Case conditions to be met by a year to December 2022, in light of delays experienced as a result of the Covid-19 pandemic.

The report also draws attention to the fact that the Council projects could provide close to four times more benefit to the economy than privately owned developments, due to the fact that they would be publicly-owned – and therefore the income would remain in the county.

Orkney’s Community Wind Farm Project encompasses three 28.8MW, six turbine, wind farm developments at Quanterness in St Ola, at Wee Fea in Hoy and on Faray in the North Isles.

Relatively few suitable sites remain in Orkney for commercial scale developments and the three sites were chosen following a rigorous selection process, taking account of factors including proximity to homes and designated areas.

The planning applications for Quanterness and Hoy are currently with the Scottish Government for determination and an application for Faray is due to be submitted early next month.

As well as generating significant income for the county, the projects could also provide an estimated annual payment of £144,000 per project into a ‘location-specific community benefit fund’, for local communities to drive transformational projects of their own.

The projects will also help the Council to meet not only its own carbon reduction aspirations, but also contribute to Scottish and UK Government targets too.

John Mundell is Interim Chief Executive of Orkney Islands Council. He said: “The findings of this independent economic report unequivocally demonstrate just how important a transmission link is to Orkney’s economic future, not only in bringing much-needed income to the county but also in retaining and securing high-value jobs – giving us great hope as we look to stabilise Orkney’s economy post-Covid.

“The report also shows just how important the Council’s own proposed projects are to securing the cable – without the Council’s projects, to be frank, the cable will not happen.

“As the new Scottish Government cabinet ministers settle into their new roles, we hope that the report will strengthen their understanding of how critical  this piece of infrastructure – and ‘Orkney’s Community Wind Farm Project -  is to our islands – and Scotland as a whole.

Claire Mack, Chief Executive of Scottish Renewables, said: “Reaching our net-zero climate ambitions is going to require a significant increase in deployment of renewable energy technologies, many of which will be located is some of Scotland’s most remote regions.

“In order to harness the full benefits of these projects it is essential that our electricity transmission system, which was built more than half a century ago, is upgraded to ensure there is sufficient network capacity to support these new ways of generating and using power.

“Renewable energy projects not only help reduce Scotland’s carbon emissions but also bring billions of pounds of investment and significant socio-economic benefits to the communities in which they are located, particularly through new skilled employment opportunities. 

“This report clearly demonstrates the importance of improving our network infrastructure, the considerable benefits this can bring to Scotland’s economy, our remote communities and our fight against climate change.”

Matthew Finn is Commercial Director of EMEC. He said: "I welcome the findings of the report commissioned by Orkney Islands Council which clearly sets out the substantial economic benefits of securing a new electricity transmission link for Orkney. Importantly for EMEC it shows the enabling role that the link will have in providing a route to market for our world-leading marine energy industry, unlocking the full potential of an industry which has the potential to set Orkney and Scotland at the very heart of a clean green future.”

The report is available here.