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U.K. to Raise Scottish Island Wind Subsidy to Spur Remote Plants

Sept. 18 (Bloomberg) -- The U.K. plans to pay wind farms on the Scottish Islands a higher subsidy to encourage development of plants in remote regions that benefit from strong breezes.

Developers on the islands will receive 115 pounds ($184) a megawatt-hour for power produced from 2017, according to a consultation by the Department of Energy and Climate Change. Projects in the rest of the U.K. will receive 95 pounds.

The higher cost of transporting power from plants on the Western Isles, Orkney and Shetland has stalled developments, often located in sparsely populated, windy regions. The U.K. is seeking to get 30 percent of its electricity from renewables by 2020, up from about 12 percent now, and the islands could provide about 1.5 percent of generation in that year, DECC said.

The cost per unit of power produced on Orkney and Shetland is about 25 percent higher than on the mainland and 50 percent higher on the Western Isles because of higher transmission and operation expenses, according to the document published today.

The regions could accommodate more than 1.2 gigawatts of renewable power, including about 1 gigawatt of onshore wind, by 2020, the consultation showed. Marine projects such as wave and tidal plants off the islands won’t receive increased support under the initial plans. The consultation closes Oct. 30.

To contact the reporter on this story: Sally Bakewell in London at sbakewell1@bloomberg.net

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