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Shetland windfarm - Viking Energy


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http://farm1.static.flickr.com/110/289751008_2d7be4bc04.jpg

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Would people prefer this?

 

Most Shetlanders will moan about anything new. They always have and always will.

 

"everybody is leaving"

"well maybe we should get more people to come up"

"bloody soothmoothers"

 

 

 

:wink:

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The Viking Energy debate is now so polarized that its hard to see masts for the blades or any common sense. I believe that if its a good thing for Shetland then bring it on, if its a bad thing for Shetland then drop it pronto and stop wasting more time & money. How do we get an answer to this dilemma? I have no idea but for the moment put aside peat disturbance, carbon footprints, what Stuart Hill or the RSPB may or may not have said & try this:

 

Anything we do as an individual, group, business etc has to have a basic economic principle (banks excluded). So if you go to the Co-op with a fiver and try to get 20 quids worth of stuff past the checkout you will either be stealing or get stopped and have to put things back. If an organization asks for a grant to do something that costs more than the value of its intended service it wont get a bean. If a business spends more than it takes in beyond its overdraft it goes bust (again banks excluded). So the story continues.

 

Given the above there are 2 fundamental spanners in the works facing Viking Energy & the SIC / Charitable Trust. Firstly the SIC / Charitable Trust who are the guardians of Shetlands public / community funds, have a very poor track record on investment and have lost millions in quite small investment ventures compared with the wind-farm.

 

Secondly Viking Energy's profit & loss sheet (or business plan to use the modern term) does not include actual costs associated with delivering the power to the national grid. They are hopeful that the Government might at some point reduce or scrap the grid connection charges and maybe the Crown Estate will also reduce their annual seabed rental fees. The definitive here being maybe. The total maybe could be anything between annual costs of £25 - £50 million.

 

Does it not seem odd that a project involving such huge sums of money with only a maybe on the true costs, has actually got this far?

 

 

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Vik, to answer your questions

Firstly - The Shetland Charitable Trust’s partner in the Viking project, SSE, is a very experienced player in the onshore wind market and will only take forward a commercially viable project therefore fears that the Trust or SIC will somehow be unable to realise a substantial profit from this activity is unfounded, if it goes ahead.

Secondly – The economics of the wind farm does take into account the cost of the subsea cable. While the Viking Project does not have to fund the cost of the proposed £272m 600MW subsea cable (current proposal) it does have to pay the charges associated with its use and these are already factored into the business plan. The charges associated with distance for connecting remote generation are currently a cause for concern and are being taken up with DECC, NGET, OFGEM and UK Minsters by the Scottish Ministers.

Two solutions are being looked into for the Shetland Viking Project, a transmission charging cap under Section 185 powers (Energy Act 2004) and the potential to include island wind projects in the enhanced ROC mechanism by classing them with offshore wind. This will need to be resolved before the economics of the Viking Project can be finalised. With an income stream in the order of £160m per annum the project could afford fairly high TUoS charges and still be viable.

The reason the there is uncertainty on the cost of the link is that OFGEM have not given approval to SHETL for their proposed single circuit plan nor is there a decision from them on the legal issue of giving such a licence for a cable which crosses the territorial waters boundary. This is due in the next few months.

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Thanks for that. As you seem knowledgeable on this can you answer the suggestion that there are too many wind farms, either in the system now & those in the proposal stage, for the national grid to accommodate?

 

Also that the Shetland wind farm would loose its wind profile advantage (which seems to be its main sales pitch) if a larger, cheaper to build and lower connection fees wind farm were to be built somewhere on the mainland.

 

Thanks

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Thanks for that. As you seem knowledgeable on this can you answer the suggestion that there are too many wind farms, either in the system now & those in the proposal stage, for the national grid to accommodate?

I doubt if this is true, but even if it is, it's not an argument to stop building wind farms. It's an argument to redesign the National Grid.

Also that the Shetland wind farm would loose its wind profile advantage (which seems to be its main sales pitch) if a larger, cheaper to build and lower connection fees wind farm were to be built somewhere on the mainland.

Larger would be more expensive and it would need to be twice the size for the same output. How could something twice the size or bigger possibly be cheaper? The difference in transmission charges would be trivial (in the nature of 1% or less of turnover). The wind profile advantage is the decisive reason for building in Shetland, it far outweighs any disadvantage brought on by distance.

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The reason the there is uncertainty on the cost of the link is that OFGEM have not given approval to SHETL for their proposed single circuit plan nor is there a decision from them on the legal issue of giving such a licence for a cable which crosses the territorial waters boundary. This is due in the next few months.

How much of the cable length is outside the territorial waters boundary?

 

Does the Crown Estates Commission still charge for this length?

 

What has it got to do with OFGEM whether it's outside territorial waters?

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