Scottish onshore wind could be allowed into CfD auctions

The government has applied for permission from the European Commission to allow onshore wind farms on the Scottish islands to compete for Contracts for Difference (CfD) subsidies.

Responding to a parliamentary question, energy minister Richard Harrington revealed the government is seeking state aid approval from Brussels to classify remote island wind as a separate technology in group 2 of the CfD scheme.

All onshore wind is currently included in the group 1 pot for established renewable energy technologies. The government wants onshore projects to be classed in the pot for less established technologies, which also includes offshore wind and marine renewables.

Harrington said the application covered onshore wind projects proposed for the remote islands of Scotland, including in Orkney, Shetland and the Western Isles.

The government will argue that the cost and complexity of installing such projects is greater in more remote locations such as these.

Up to £557 million of funding was earmarked for group 2 technologies in October’s Clean Growth Strategy.

Under EU competition rules, state aid approval is required to ensure that companies do not enjoy an unfair advantage when competing for subsidies, which the CfD provides.

The Conservative general election manifesto pledged to back onshore wind farms in remote areas of Scotland while maintaining the clampdown on such projects elsewhere in the country, which has been in place since 2015.

Harrington’s colleague, climate change minister Claire Perry told the House of Commons’ BEIS (business, energy and industrial strategy) select committee last week that the government was exploring how to get around the CfD rules to allow support for projects in remote parts of Scotland.

She said: “Under the current CfD rules it is impossible to bring forward geographically specific wind farms, much as we would like to.

“I am working on ways with the team to see how we might bring forward onshore wind, particularly for areas in the UK that want to deploy it.”

Stephanie Conesa, policy manager at Scottish Renewables, said securing state aid approval was just one of the hurdles standing in the way of onshore wind roll out on the Scottish islands.

“While we welcome the UK Government’s commitment to giving renewable energy on the islands a chance to compete for contracts, there are still a number of challenges ahead – of which securing of State Aid approval is just one.

“It is important that a focus on the benefits of delivering these projects is maintained while these challenges are addressed.”

But she said that onshore wind could supply a big boost for the islands economies.

“The economic impact of deploying large-scale onshore wind on the remote islands may be transformational, with estimates that projects could be worth up to £725 million across the Shetland Islands, Orkney Islands and Western Isles.

“Seeing our island communities benefit from their substantial natural resource will also prove positive for many businesses across Scotland as the projects build their supply chains and create new jobs.”