Neart na Gaoithe wind farm failure brings scrutiny on subsidy schemes

Questions are being raised over the complex management of renewable energy subsidy schemes, after a major offshore wind farm off the coast of Fife was effectively scuppered.

The 64-turbine Neart na Gaoithe project, which, the Daily Telegraph notes, was one of only two offshore developments to win a government subsidy contract last year, has been thrown into jeopardy after its contract was terminated by the arms-length body that manages them on behalf of the UK government.

The Low Carbon Contracts Company (LCCC) pulled the subsidies after a 26 March deadline to invest £200m into the £2bn development was missed.

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This in turn occurred because a judge delayed a verdict on a judicial review launched by the RSPB challenging the plans over an apparent threat to the gannets at the nearby Bass Rock colony, the largest in the world.

It means a project that received planning approval from the Scottish government has been undermined by the decision of a body that reports into the Department of Energy and Climate Change in Westminster.

In parliament this week, Andrea Leadsom, the energy minister, said the decision was one for the independent LCCC and not the UK government.

Ironically, RSPB Scotland itself told the Financial Times that the issue highlighted that there could be "better join up" between the "Edinburgh government's planning process and the management of wind farm financing by LCCC and the UK government".

Global wind and solar developer Mainstream Renewable Power, the company behind Neart na Gaoithe, said the project is still ready to start and the financial backer remain committed, adding that it "strongly disputes the validity of the termination notice".

The company remains in arbitration with LCCC but unless the decision is fully reversed, the subsidies will no longer be available and the project will be effectively killed off, even if the judge rules in its favour.

The Telegraph says the decision could help the government by freeing up "some cash in the government's budget for renewable energy subsidies, which had been overspent". But the FT says it could also undermine "efforts to meet UK and Scottish carbon emissions targets".

Wind power has become a major part of Scotland's renewable energy landscape. The Scotsman reports that turbines provided enough electricity to power 75 per cent of homes north of the border in April, well ahead of a target of 50 per cent.