Scotland powers ahead despite North of Scotland charging penalty
Two Scottish offshore wind farms with a joint capacity to generate almost 1.5GW of clean electricity have today (January 14) each been awarded a Contracts for Difference (CfD) in a competitive UK Government auction process.
The 1.4GW phase B of Berwick Bank Wind Farm, which has the potential to deliver more than 4GW of clean power when all phases are fully completed, is the first fixed offshore wind farm in Scotland to be procured by the CfD scheme since 2022.
The Pentland Floating Offshore Wind Farm, a test and demonstration project that will play a key role in providing the expertise required to deliver this technology on a commercial scale in Scotland, has also been awarded a contract as part of Allocation Round 7 (AR7).
Both are expected to boost investor and supply chain confidence in the renewable energy industry.
The UK Government’s CfD scheme is a financial agreement that supports low-carbon electricity generators by providing a guaranteed price determined through competitive auctions, shielding both projects and consumers from volatile market prices, and ensuring new renewable generation is delivered at best value to consumers.
Both Berwick Bank and Pentland will add to the £15 billion of economic benefits and 47,000 jobs already delivered by renewable energy in Scotland each year.
Scottish Renewables has been urging the UK Government to maximise the number of projects brought forward through its Contracts for Difference (CfD) scheme and the two projects procured from this latest allocation round is a much-needed boost for Scotland’s offshore wind sector.
The projects delivered through AR7 will not only support the UK Government’s clean power ambitions but will help protect consumers from future price spikes, create new jobs and play a key role in securing our homegrown energy supply while maintaining confidence in the Scottish supply chain.
Claire Mack, Chief Executive of Scottish Renewables, said:
“Scotland has not been awarded a fixed offshore wind CfD since 2022, so it is hugely encouraging to see the success of SSE’s Berwick Bank which is set to energise Scotland’s offshore wind market and boost confidence in our supply chain.
“It is worth noting that Berwick Bank is the only fixed bottom project to be awarded a CfD and it connects into a significantly lower cost transmission zone in the South of Scotland compared to other eligible projects which missed out that would have connected into those much higher price zones in the North.
“With a strong track record of building major infrastructure projects, Scotland has utilised its expertise and delivery track record to be competitive despite all the additional pressures Scottish projects face when bidding for a CfD, including disproportionately higher grid charges than other parts of the UK.
“While this outcome is welcome news for consumers, achieving a lower-cost, secure, stable and geographically diversified energy system in the long term requires a fairer approach to connecting projects to the grid and enabling them to deliver power, regardless of where they are located.
“Pentland offshore wind farm’s success in the auction is encouraging for Scotland as these smaller floating projects are an important step towards larger, commercial scale developments and the benefits these will bring to the supply chain and wider Scottish economy.
“To build on the success of AR7 and to ensure our world-leading pipeline of offshore wind developments are ready to move forward through AR8, we urge the UK Government to work with industry to urgently find solutions to the prohibitive grid charging regime to allow all Scottish projects to compete fairly in future CfD allocation rounds.”
Ends
Notes to editors
- Contracts for Difference (CfD): Allocation Round 7 – UK Government