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HIE responds to CfD announcement

Published: 23/09/2019

Contracts for Difference (CfD) have been awarded to four projects in the Highlands and Islands – Muaitheabhail and Druim Leathann windfarms in Lewis and Costa Head and Hesta Head Windfarms in Orkney.

Gavin MacKay, head of energy industries at Highlands and Islands Enterprise (HIE), said: “We welcome this good news today, which represents a step in the right direction towards interconnection for Orkney with the successful award of Hoolan Energy’s two projects. Ofgem’s conditionality still requires a further 100MW of new generation to come forward by December 2021 to justify investment in the cable for Orkney.  

“However, there is disappointment as other island projects - Stornoway Windfarm in Lewis and Viking Energy in Shetland did not receive CfD awards after a huge amount of work by the teams.

“The combined capacity of the successful Lewis projects is not enough to meet the conditions of building the Western Isles Interconnector. Transmission links to the islands are vital to ensure that the Northern and western Isles can continue to play a vital and strategic role in the UK energy mix for the decades to come.

“While we are disappointed that the Moray West project did not proceed in the timeframe of this round, we look forward to continuing with positive engagement as the project is enhanced for future allocation rounds.

"The prevalence of offshore wind project success in the south of the UK underlines the criticality of having a competitive manufacturing supply chain in the region to supply components to projects clustered around the East of England.

“This allocation round demonstrates just how competitive remote island and offshore wind has become. Participation in the UK electricity market is the big prize both for place based, sustainable and inclusive economic growth opportunities. It also underpins the valuable contribution our region can make to a secure, sustainable, decarbonised UK energy system in our transition to net zero-carbon.

“We will work proactively with all stakeholders to understand the implications and work towards a solution for connecting the islands. Feedback received from island and offshore developers so far has been positive about optimising projects and bidding in the next allocation round."

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