Government funding set aside for the 450MW Neart na Gaoithe wind farm off the coast of Scotland will not be reallocated to future Contracts for Difference auction rounds.
Two sources have confirmed that any CfD cash not used by the Mainstream Renewable Power offshore wind farm will return to Treasury green budgets due to overspends in the Levy Control Framework.
The Low Carbon Contracts Company (LCCC) has terminated the £114.39/MWh CfD for the 69-turbine Firth of Forth project, as revealed in subscriber-only reNEWS today.
Mainstream is disputing the validity of the termination notice and has launched an appeal against the decision which is now in arbitration.
Energy minister Andrea Leadsom told Parliament today that the decision to terminate the contract rested with the counterparty.
“That cancellation was a result of the milestone delivery date not being met. There are ongoing discussions about that. I absolutely recognise the termination of a CfD is very disappointing for all partners,” she said.
The government said: “Any decisions on investment contracts and CfDs are for the LCCC to make and DECC has no involvement in this process.”
Scottish Renewables chief executive Niall Stuart said: “Offshore wind could generate significant economic and environmental benefits for Scotland.
“We understand that Neart has disputed the issue of a CfD termination notice by the LCCC, and the matter is now in arbitration.
“We hope that an agreement can be reached that allows the continued development of the scheme.”
Image: Chancellor George Osborne (HM Treasury)
