A £2 billion offshore wind farm is set to be scrapped after it lost a Government subsidy contract due to an ongoing legal challenge over its impact on birds.
The proposed Neart na Gaoithe wind farm would see 64 turbines built nine miles off the coast of Fife and was one of only two offshore wind projects to win a subsidy contract from the Government last year.
Under the terms of the contract, £200 million had to be committed to the project by a deadline of March 26.
But developer Mainstream Renewable Power said it was unable to do so while the wind farm was still subject to a legal challenge by the RSPB, which claimed the 646-feet tall turbines, together with others proposed in the area, would be among “the most deadly for birds anywhere in the world”.
Wildlife groups fear the wind farms could kill large numbers of gannets from the nearby Bass Rock colony, the largest in the world.
While a Scottish judge hearing the case has yet to decide whether planning permission should be revoked, it appears the challenge in itself may have succeeded in killing off the project.
The Low Carbon Contracts Company, the Government-owned body that administers subsidy contracts, declined a request from Mainstream to declare “force majeure” until the legal challenge was resolved and instead terminated the contract when Mainstream failed to hit the investment deadline.
In a statement, Mainstream said it “strongly disputes the validity of the termination notice” and that it was currently “in arbitration” with the LCCC over the contract.
It said: “NnG continues to work hard to ensure that this £2 billion significant energy infrastructure project will be built as planned against a backdrop where the Judicial Review process in respect of the Section 36 consent of four offshore wind farms, including NnG, under the Electricity Act 1989 is on-going.”
Speaking in Parliament on Thursday, John Nicolson MP said: “The Government has cancelled the CfD [contract] for Neart na Gaoithe wind farm off the east coast of Scotland. Without this there will be no project at all in Scottish waters.”
Andrea Leadsom, the energy minister, confirmed that the “cancellation was a result of the milestone delivery date not being met” but insisted it was “not the Government that decides whether a delivery milestone is met, it is the LCCC who manages the CfDs”.
She said there were “ongoing discussions” about the cancellation, adding: “I absolutely recognise the termination of a CfD is very disappointing for all partners.”
The LCCC declined to comment on the decision.
Unless the decision is overthrown at arbitration, the scrapping of the wind farm is likely to help ease pressure on the Government’s budget for renewable energy subsidies, which is currently on track to be overspent.
Aedán Smith, RSPB Scotland’s head of planning and development, said: “It seems that there could be better join up between the project consenting process for offshore windfarms, which is the responsibility of Scottish Ministers, and the management of the financing for offshore windfarms, which is the responsibility of Low Carbon Contracts Company (LCCC) and DECC.
“However, RSPB Scotland’s primary concern is with ensuring that renewable energy is delivered without harming wildlife. The Neart Na Gaoithe project is one of four which were consented conjointly by Scottish Minister in 2014 and collectively they would result in thousands of seabirds being killed each year.
“The manner in which these consents were issued meant that we had no option but to challenge the decision in the courts and the court’s judgement is currently awaited.”
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