Irish £2bn windfarm hangs on UK ruling
A HUGE £2bn (€2.63bn) windfarm being developed in the UK by Irish firm Mainstream Renewable Power faces an uncertain future if a judicial review is not completed quickly.
The Dublin-based company announced yesterday that it is in exclusive talks with a consortium led by US power company InterGen for the sale of the 450 megawatt Neart Na Gaoithe windfarm that is to be located off the east coast of Scotland. InterGen has its European headquarters in Edinburgh.
The consortium also includes Siemens Project Ventures, The Marguerite Fund and Infrared Capital. Mainstream did not put a price on how much it may sell the project for. Although construction has not yet started, the project has got planning permission and is expected to be fully commissioned and generating electricity by 2020.
As part of the venture Mainstream secured a 15-year Contract for Difference (CfD) from the UK National Grid. The CfD gives the windfarm an inflation-linked strike price for the electricity it produces for a period of 15 years.
Mainstream currently owns the project outright but the Intergen consortium will become the developer if financial close on the project can be achieved by March 26, a deadline mandated in the CfD agreement.
However, the project is currently the subject of a judicial review. The Royal Society for the Protection of Birds (RSPB) is challenging the Scottish government's decision to grant a permission for Neart Na Gaoithe along with three other major windfarms backed by SSE, Repsol and others. The RSPB says that the windfarms are likely to kill hundreds of native birds. The court's decision could be open to appeal even after the conclusion of the judicial review.
A spokesman for Mainstream said that sale of the project "is dependent" on the outcome of the judicial review. He said: "Missing the March 26 deadline would create uncertainty, we don't know for sure what would happen after that, we can't say."
Mainstream's chief operating officer, Andy Kinsella, said the "building blocks" for the project are now in place.
"All consents have been received; the technology and construction contractors are in place and the required debt funding for the project has been sourced from commercial banks," he said, although he said the judicial review casts some doubt on the process.
Neart Na Gaoithe is to create over 500 jobs during construction and over 100 permanent jobs during its 25-year operational phase. It will have the capacity to deliver enough power for 325,000 homes, equal to 3.7pc of Scotland's total demand.
There is £1.5bn of debt funding in place which is secured on the project assets. The InterGen consortium would provide £500m in equity to develop the venture.