SSE gives go-ahead to 443MW Viking windfarm in Shetland

SSE Renewables has given the go-ahead to the Viking windfarm in Shetland, which will be the actor project for a new transmission link connecting the islands to the mainland power grid for the first time.

The windfarm will have 103-turbines with a combined capacity of 443MW, making it the UK’s largest onshore installation once completed in early 2024. Construction is expected to begin later this summer.

Ofgem is due to make a final decision on whether to approve a new 600MW transmission connection to Shetland next month. The regulator gave preliminary approval to the project in April but said the final decision would be conditional on SSE Renewables proceeding with its investment in Viking.

It had already approved the link once but ultimately withheld funding after Viking failed to secure an agreement in the latest Contracts for Difference in September 2019.

SSE Renewables managing director Jim Smith said: “Viking windfarm will help kickstart the green economic recovery, bringing much needed low carbon investment to Shetland.

“This project will bring benefits threefold for the island: harnessing its renewable potential, securing its electricity supplies for the long term, and helping decarbonise electricity.

“After more than a decade working closely with the community, we are delighted to reach this stage and be playing our part in Shetland’s net zero future.”

Scottish energy minister Paul Wheelhouse said: “This decision is of sufficient scale to act as the trigger to unlock the much anticipated major investment in a high voltage connection from Shetland to mainland Scotland, subject to a final decision by Ofgem which we expect shortly. It is essential that the community of Shetland benefits from this project and we look forward to further news of contracts being awarded to local businesses, as well as Scotland as a whole, during the construction phase.”

The announcement came as SSE released its financial results for 2019/20. Operating profit was down 40 per cent to £963 million, but up 37 per cent to £1.48 billion once adjustments were made. Pre-tax profits plunged 55 per cent to £588 million.

Scottish and Southern Electricity Networks (SSEN) reported a 22 per cent fall in adjusted operating profit to £574 million. The figure for SSE Renewables was up 24 per cent to £567 million.

SSE said the coronavirus pandemic had a negative impact of £18.2 million during the last financial year but is expected to cost the group between £150 million and £250 million over the next 12 months.

The firm assured investors it is a “resilient business with significant opportunities for further low-carbon investment in its core networks and renewables businesses”. Noting its recent decision to proceed with the £3 billion Seagreen offshore windfarm in partnership with the French oil giant Total, SSE said it plans to invest almost £4 million every single day for the next five years.

“It’s easy to talk about a green recovery, but we’re putting our money where our mouth is with £7 billion of low-carbon infrastructure projects that can deliver a win-win for climate and economy,” said SSE chief executive Alistair Phillips-Davies.

“The investment plans we’ve set out today underline our intentions as a British business providing a boost to the economy and we want to work with government to make the green recovery and delivery of net zero a reality. The world is facing twin crises with the economic impact of coronavirus and the climate emergency and the only route forward is to unlock investment.

“Plenty of businesses talk a good game on climate action, but we’re serious. That’s why we will hold ourselves to account with new science-based emissions reduction targets, independently verified and underpinned by evidence.”

SSE completed the sale of its household retail business to Ovo Energy in January. The company said it plans to dispose of a further £2 billion of non-core assets by 2021 in instances “where it is not the principal operator or where they don’t align with the transition to net zero”.