The backers of a £2billion wind farm planned for the outer Forth Estuary have not been scared off by moves to scrap a subsidy agreement, the project’s developer said yesterday.
The Low Carbon Contracts Company (LCCC), which manages for the contracts for difference (CfDs) for the UK Government, said in latMarch it would terminate the state subsidy for the Neart na Gaoithe (NNG) wind farm.
But developer Mainstream Renewable Power said it was not taking the setback lying down and insisted funding was still in place for NNG, which was expected to result in £1.1billion of spending in Scotland and create 600 jobs.
UK Government ministers scrambled to avoid blame for the decision, which casts doubt on the viability of other offshore wind projects in Britain.
A deadline of March 26 had been set for Mainstream to achieve financial close for NNG.
Mainstream appeared to have taken a step towards meeting its obligations when a consortium pledged £500million for the projected in January.
But the final investment decision has been repeatedly held up by a judicial review ordered by a wildlife group.
Royal Society for the Protection of Birds challenged the Scottish Government’s decision to grant planning application for NNG and three other wind farms on the basis that they could have serious implications for the protection of wildlife habitats across Scotland.
A conclusion has yet to be reached, even though the court hearing took place a year ago.
Mainstream said yesterday it still did not know when a ruling will be delivered.
But it did say the withdrawal of the subsidy, which was initially granted in February 2015, was not a foregone conclusion and that it was “in arbitration” with the LCCC.
It is thought that while NNG’s backers could technically pull out, they have given no indication they will do so.
UK Energy Minister Andrea Leadsom yesterday told the House of Commons the decision was disappointing, but said it ultimately lay with the LCCC and not the UK Government.
LCCC is a government-owned company which was set up to act as counterparty for CFD subsidy deals.
Ms Leadsom said: “The cancellation was a result of the milestone delivery date not being met. There are ongoing discussions about that and obviously I absolutely recognise the termination of a CFD is very disappointing for all partners.”
LCCC declined to comment.
Niall Stuart, chief executive of Scottish Renewables, said he hoped an agreement could be reached that would allow the continued development of the scheme.
CfD’s guarantee energy producers a ‘strike price’ for every megawatt per hour (MWh) they supply to the grid over a 15-year period.
