A planned £2bn wind farm off the coast of Scotland is in doubt after the cancellation of a subsidy deal. The decision, which follows a delay in the project while a judge considers its impact on bird life, is expected to have a chilling effect on the offshore wind industry in the UK. Unless reversed, the decision to terminate its “contract for difference” subsidy is likely to doom the 448MW Neart na Gaoithe project off the Forth estuary, undermining efforts to meet UK and Scottish carbon emissions targets. Mainstream Renewable Power, the international energy company developing the project, said it “strongly disputes the validity of the termination notice” issued by the Low Carbon Contracts Company, a group established by the Department of Energy and Climate Change. The Neart na Gaoithe project is understood to be ready to proceed, but a final investment decision cannot be made without resolution of a legal challenge brought by the Royal Society for the Protection of Birds, which says it and three other offshore wind projects threaten the lives of thousands of seabirds. Edinburgh’s Court of Session held a hearing in May 2015 to review the Scottish government’s approval of the projects, but judge Lord Stewart has yet to issue his ruling. Neart na Gaoithe is one of seven offshore wind farms awarded subsidy contracts since 2014 and one of only two to win subsidies in a competitive auction. Its contract guaranteed it a price of £114 per megawatt hour for its electricity, making it one of the cheapest offshore wind power subsidies issued so far.
FT 12th May 2016 read more »