United Kingdom

United Kingdom

Tribunal backs Neart Na Gaoithe in CfD dispute

UK: An arbitration tribunal has backed developer Mainstream Renewable Power over the cancellation of its contract for difference (CfD) agreement with the Low Carbon Contracts Committee (LCCC) for the 450MW Neart Na Gaoithe offshore wind project.

Neart Na Gaoithe is set for a site off Scotland's east coast
Neart Na Gaoithe is set for a site off Scotland's east coast

The LCCC is responsible to managing the UK's CfD process on behalf of the UK government.

In March 2016, the LCCC issued a notice terminating the deal, stating the project had missed milestones set out in the CfDs.

However, Mainstream disputed this, arguing it had entered arbitration with the LCCC prior to the notice because the project was caught up in a judicial review in Scotland over the its potential impact on bird wildlife, which had delayed the project's development.

In an joint announcement today, the LCCC and Mainstream said: "The arbitral tribunal has made its decision in Mainstream's favour under the dispute resolution procedure set out in the CFD."

This means the CfD deal with the LCCC is still in place and the project can continue towards a final investment decision.

In January 2016, Mainstream announced is was in discussions with a consortium led by power company InterGen, regarding taking its 450MW Neart na Gaoithe project to financial close and into construction.

The consortium also includes Siemens Project Ventures, the Marguerite Fund and Infrared Capital.

Neart na Gaoithe is planned for a site in the Outer Forth Estuary in the North Sea, off Scotland's east coast. It is set to use Siemens' 7MW turbine 

It secured a 15-year CfD subsidy at a strike price of £114.39/MWh in February 2015 in the UK's first auction.

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