February 19, 2013

‘Business as usual’, says new Viking Energy boss as projected community profits lowered

February 18th, 2013 by Adam Civico | The Shetland Times | www.shetlandtimes.co.uk

Viking Energy has scaled down the projected profits the community will earn from its windfarm from £23 million to £20 million a year.

It now hopes the contentious 103-turbine project will start exporting power and earning profit for Shetland Charitable Trust in late 2018.

The new chairman of the Shetland-owned half of the venture, Alan Bryce, said it was “business as usual” with preparations well under way.

Mr Bryce, a former managing director of Scottish Power’s energy networks, joined the team in December as chairman of Viking Energy Shetland (VES), which is 90 per cent owned by Shetland Charitable Trust.

The Scottish Government’s decision to grant consent for the project is being challenged in court by anti-Viking group Sustainable Shetland. A judicial review in the Court of Session began in late January before being adjourned, and is expected to resume in April.

Sustainable Shetland, which has more than 800 members, is arguing that energy minister Fergus Ewing should have ordered a public inquiry. It claims the government failed to comply with its obligations under the EU Birds Directive in relation to the potential impact on the whimbrel, a migratory wading bird.

VES is in a 50-50 partnership with SSE to build the £700 million windfarm, which has consent for 103 turbines in the Central Mainland and a maximum rated capacity of 457 megawatts.

Mr Bryce said updated income projections showed the charitable trust could achieve a return of around £20 million a year for community funds if it proceeds with its investment in the windfarm. The new figure reflects the reduced earning potential due to the Scottish Government’s decision to delete 24 turbines from the application.

Viking said it expected another £6 million a year to be paid to crofters and landowners. It estimates £5 million could be paid out for services and in wages to the permanent workforce of around 30 people.

A new date of November 2018 for connection to the National Grid, rather than the envisaged “switch on” in December 2017, has meant some rescheduling of Viking’s work programme. Some of the detailed ground investigations have been delayed until next year.

The three-year construction period from 2016 is expected to require an average of 140 workers.

VES’s head of development Aaron Priest said this was “an exciting time” for the local team with Mr Bryce and the other two new directors, Elsbeth Johnson and Joe Philipsz, now closely involved following their appointment in December.

Mr Priest paid tribute to the previous board members, Bill Manson, Caroline Miller and Alastair Cooper, for “a sterling effort in bringing the project to its current advanced stage of development”.

Mr Priest said: “The new board’s responsibility will be to ensure that the project continues to move steadily forward from its current consented status, through a Final Investment Decision (FID) and, thereafter, into construction and operation.”

Work is continuing in the local office and within SSE. It includes detailed engineering design, equipment selection, financial modelling and finance options, liaison with stakeholders, finalising land agreements, lobbying on transmission costs and delivery of the grid connection.

Viking expects Scottish Hydro Electric Transmission’s 600MW interconnector cable from Shetland will make landfall in Caithness in preference to previous proposals which would have seen a longer subsea route to either an offshore hub at the Beatrice oilfield or straight to Banffshire.

Mr Bryce said connecting Shetland to the National Grid would “lay the foundations” for development of future industries in wave and tidal power and possibly offshore wind.

He said the windfarm was expected to produce “world class” output levels averaging around 44 per cent of maximum yearly capacity, significantly greater than the 27 per cent achieved by UK onshore windfarms. He said that was “superior even to existing UK offshore windfarms which average around 37 per cent”, according to UK government statistics.

Meanwhile, two new employees have been taken on at Viking’s office at the North Ness in Lerwick. Sharon Powell has joined as administration officer, while community liaison officer John Robertson has been in post since the start of this year. The other employees are Mr Priest, project information officer David Thomson and adviser Angus Ward.

URL to article:  https://www.wind-watch.org/news/2013/02/19/business-as-usual-says-new-viking-energy-boss-as-projected-community-profits-lowered/