Renewable energy firm Infinis is to press ahead with two major wind farm projects in Scotland, despite the UK government’s decision to close the existing subsidy scheme a year early.
The firm, chaired by former SSE boss Ian Marchant, said its 43 megawatt (MW) A’Chruach development in Argyll and the 66MW Galawhistle project Douglas in South Lanarkshire remain eligible to be built out under the existing renewables obligation (RO) regime.
Under plans announced by the Conservative government yesterday, the RO initiative, through which subsidies are paid to renewable power generation schemes, will be closed to onshore wind farms from 1 April next year.
Scottish energy minister Fergus Ewing described the decision as “deeply regrettable” and said it would have a disproportionate impact north of the Border, as about 70 per cent of UK onshore wind projects in the planning system are in Scotland.
However, Infinis said that up to 5.2 gigawatts of onshore wind capacity in advanced stages of development could be eligible for grace periods, and it was waiting for further clarity from Westminster.
Chief executive Eric Machiels, pictured, said: “At a time when the government has pledged to meet its international obligations to reduce carbon emissions and decarbonise power generation, Infinis continues to believe that onshore wind remains the most effective renewable energy technology that is best placed to help achieve these goals at the lowest cost to consumers.
“Given the good progress of our A’Chruach and Galawhistle construction projects and the maturity of some of our other consented projects, we remain confident that we will deliver on our 130 to 150MW growth target by 2017.”
Infinis has secured a £52 million funding package from Royal Bank of Scotland and National Australia Bank to build the A’Chruach wind farm, while Barclays is the joint lead arranger of an £83m project finance facility for Galawhistle. The lender arranged the seven-year deal alongside Santander.
Ally Scott, managing director of Barclays Corporate Banking Scotland, said: “We have a strong track record in supporting quality renewables projects like Galawhistle, which has all the elements of a successful development, including a reputable operator and a power purchase agreement with Npower.
“The funding will enable construction to commence as the project continues towards its landmark first exportation of power next year. This deal also reiterates our position in the Scottish marketplace where we are robustly growing our market share and client base across all sectors.”
Infinis, which floated in November 2013, is expected to deliver first power from Galawhistle by the end of next year, and Machiels said: “This is a key milestone as we continue to deliver on our growth aspirations that we committed to at the time of the initial public offering.”