Scottish Offshore Renewable Projects Face Risks From Grid Delays

Scotland’s planned offshore tidal, wave and wind power plants face risks from delays in building links to transfer electricity between the nation’s islands and the mainland, according to renewable energy developers.

Scottish Hydro Electric Transmission, a unit of SSE Plc (SSE), said on Dec. 20 links to the Orkney and Shetland Islands won’t be complete until 2018, two years later than planned, because of challenges including planning approval, land acquisition and delivery of subsea cables. A government spokeswoman said it’s disappointed by the delay and will discuss the matter with SSE.

More than two-thirds of wave and tidal energy developments are reliant on the new links to deliver electricity from Orkney, Shetland and the Western Isles to the Scottish mainland, said Richard Yemm, founder and director of Pelamis Wave Power Ltd.

“This news is clearly a concern for the emerging marine industry in general,” Yemm said by e-mail. “Pelamis will continue to work closely with all parties involved to try and minimize this delay and its impacts.”

EON SE and Iberdrola SA’s Scottish Power Ltd. are testing two Pelamis machines in Orkney and Vattenfall AB is helping it build a 10-megawatt project off the Shetlands. In addition, Pelamis is developing two other sites in Scottish waters.

Aquamarine Power Ltd., an Edinburgh-based developer of wave energy technology also said the delays were a cause for concern.

An “urgent” fix is needed to give developers confidence to commit to capital costs in the early summer, Chief Executive Officer Martin McAdam said in an e-mail.

Ofgem, the U.K. energy regulator, in 2010 began a review of transmission costs to assess whether generators in remote areas such as offshore marine developers should pay more for power transmission than those closer to centers of demand. A proposal is being studied that would partly set rates on the location as well as taking into account the renewable power being generated.

“This news underlines the need for swift action to end the discriminatory treatment of the Scottish Islands regarding grid connection charges,” the Scottish government spokeswoman said.

To contact the reporter on this story: Louise Downing in London at ldowning4@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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