News / Viking updates trust and makes no comment
SHETLAND wind farm developer Viking Energy appears to be confident that their 457 megawatt project will be viable once the current transmission charging and subsidy regimes have been changed to suit island generators.
Company chairman Alan Bryce was in Shetland on Thursday to update members of the Shetland Charitable Trust.
The meeting was held behind closed doors. Afterwards, Bryce as well as trust chairman Bobby Hunter declined to comment.
Last week, Bryce admitted in an interview with BBC Radio Shetland that the £700 million project was not viable unless transmission charges were lowered and subsidies increased.
In saying so, he reacted to the government’s Scottish Islands Renewable Project report, that concluded that “a coordinated policy and regulatory response” was needed to help renewables from the Scottish islands to become viable.
The report was hailed as a breakthrough by energy secretary Ed Davey who went on the record by saying that the UK government was “keen to unlock the potential for the development of renewable energy on the Scottish Islands”.
He added: “The report being published marks a considerable step in progress towards making decisions about supporting renewables investment on the Scottish islands.”
These statements have been described as “significant” by industry sources who have detected a fundamental change in the way renewable energy projects in the Scottish islands are seen by policymakers and civil servants in London.
Viking Energy has however so far declined to explain why such a radical change was needed for a project that received only last year, £6.3 million of extra funding from Shetland Charitable Trust on the basis that it would earn the trust at least £20 million per annum by 2018.
In his report of 28 June 2012, the trust’s financial advisor Jeff Goddard told trustees that with planning consent in place the Viking Energy project was estimated to be worth between £50 and £130 million.
Neither Jeff Goddard nor trust manager Ann Black were available for interview this week to explain what their latest estimates were.
Head of development at Viking Energy Aaron Priest said that with the delay of the interconnector cable until at least 2017 all the parameters for the project had changed.
“A range of policies, costs and incentive issues that affect all projects and not just the Viking project have been changing, particularly in the last year.
“That creates a degree of uncertainty. This is government providing investment clarity for the benefit of island renewables, which underpins our viability.
“Viking stands to benefit from that – and so do the people of Shetland. The report highlights the economic benefits of renewable energy and the many jobs it will bring here.
“We look forward to seeing the detail of what policy interventions the government is proposing in due course,” he said.
Meanwhile, speaking last week, the trust’s chairman Bobby Hunter said he would not comment on a statement his predecessor Bill Manson had made in May last year when he said that the Viking project would even be viable with transmission charges as high as £127 per kilowatt.
Hunter said: “I am open-minded. I am not making any conclusion on the current estimates. There wouldn’t be a project, if there was no profit. We have to wait and see what the final figures are and then make a decision.”
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