News / Viking Energy not viable, says chairman
SHETLAND wind farm developer Viking Energy has admitted that their project might not be viable with the current subsidy and transmission charging system in place.
The company, partly owned by the local community through a 45 per cent stake of the Shetland Charitable Trust, welcomed Wednesday’s government report that called for an overhaul of the system.
The trust, which holds more than £200 million of community assets, has repeatedly been told by the developers that they can expect to earn as much as £20 million a year from its planned investment in the 457 megawatt wind farm.
Crofters and landowners were promised a further £5 million per annum, while communities were told they could look forward to share a further £2 million every year amongst them.
Viking Energy chairman Alan Bryce said the company faced transmission charges 10 times higher than renewable energy projects in the central belt of Scotland.
He told BBC Radio Shetland: “With the numbers we have seen being mooted by National Grid we did not think we would be able to get the project away.
“We have a big advantage in Shetland with regards to the level of output, but that is not enough in itself to overcome the charges that we would be facing if they were as high as they are mooted, and if the level of revenue support was no higher than what you would get for a mainland wind farm.”
A statement issued by Viking Energy on Wednesday morning added: “Since gaining planning consent, Viking has made good progress, but if we are to secure the best deal for Shetland and investors, it is vital that government, regulators and developers act on the conclusions of this report.
“Investors cannot take the project to completion until they have clarity around revenues and grid access.
“That would be in Shetland’s interest – but it would also, as the ministers indicate, diversify and broaden the country’s electricity supply.”
Only last year, then VE chairman, former councillor Bill Manson rejected suggestions that high transmission charges might threaten the project.
Chairman of anti-Viking group Sustainable Shetland, Andrew Halcrow, said on Wednesday evening he was not surprised by the revelation as it confirmed what the group had been saying for many years.
“Their figures never seemed to add up anyway. I never got any reply to any of our queries for a breakdown of their figures.
“What really annoys me is why trustees have not asked the pertinent questions when investing £10 million in the project. It seems as though they have believed every bit of Viking spin.”
Former Sustainable Shetland chairman, now councillor, Billy Fox said Bryce’s comments was in stark contrast to the statement from VE chairman Bill Manson in May 2012 when Ofgem produced their report on the back of Project TransmiT and said Shetland could expect to pay £70 per kw/yr.
“VE at that time said high transmission charges would not damage plans for the wind farm and chairman Bill Manson stated ‘the figure that has been portrayed as coming from Ofgem is well within the range of costs with which we have done our modelling and therefore it does not make us fear for the future of the project’.
“Chris Bunyan, spokesman for the Windfarm Supporters Group was also quoted in the media saying, ‘when looking at the costs of the wind farm, Viking Energy has been using estimates of up to £127 per kilowatt. So even if the proposed unfair charges do not change, it does not have an effect on investment plans – except to probably make them even more attractive’.
“Well it would appear this is not the case, as many people in Shetland have been saying from day one.
“Some accountability could now be necessary for the euphoric manner in which this fantasy proposal has been pushed through from the very beginning and for the millions of pounds of charitable trust money spent on it.”
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