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A major offshore wind farm proposed off Scotland’s northern coast faces an uncertain future unless revisions are made to what its developers call “unfair” transmission charges. The West of Orkney project, featuring 125 turbines, aims to supply enough electricity to power two million homes by 2029. However, the consortium behind the initiative argues that the high costs associated with connecting to the national electricity grid in northern Scotland and Argyll put the project at a disadvantage compared to developments in England.
These transmission charges are levied on power producers to fund and maintain the extensive network of pylons and underground cables responsible for transporting high-voltage electricity around Great Britain. The structure of these charges was originally intended to encourage power generation close to consumption centers. Consequently, costs are lowest in London and southern England, where demand is highest and electricity travels the shortest distances. Some areas even receive subsidies to support their grid connections. However, with the shift to renewables—particularly wind energy—the most critical factor for siting projects is access to strong wind resources, which are abundant in the north of Scotland.
Stuart McAuley, project director for West of Orkney, describes the current charge system as “unfair” for projects located in Scotland’s northern regions. He highlights that this area offers the “highest wind speeds” and thus the best potential for renewable energy generation. Yet, the existing grid charges can add up to 30% to project costs, making it difficult for such ventures to compete in government contract bidding processes against developments based further south, which do not face similar financial burdens. McAuley also notes that despite £100 million already invested in developing the two-gigawatt wind farm, work has slowed to a minimal staff presence as the consortium waits for clarity on the transmission charging situation.
The planned West of Orkney site lies west of Orkney’s main island and north of Sutherland, with electricity from the turbines set to be carried via pylons from Caithness to Peterhead. There, it would connect to a planned subsea cable routing power to Lincolnshire. The consortium, which includes Corio Generation, TotalEnergies, and Renewables Infrastructure Development Group, envisions the project as approximately half the size of the Berwick Bank development off East Lothian, which has the potential to become the world’s largest offshore wind farm. Despite recent government support for projects like Berwick Bank—through guaranteed electricity pricing—concerns remain. Scottish Renewables warns that the current transmission cost structure makes many proposed Scottish wind projects economically unviable, especially those in the far north, due to their distance from major population centers.
The UK government has indicated it is reviewing transmission charges as part of a broader electricity market assessment. UK Energy Minister Michael Shanks emphasized the need for a more coordinated, strategic approach to planning the country’s energy infrastructure, stepping away from purely market-driven signals. He stated, “At the moment it is market signals that drive this. We actually think we should take a much more holistic, strategic approach and say: ‘Where do we want power, where does it benefit the system’.” Meanwhile, the Scottish government has voiced disappointment at only two Scottish offshore wind projects receiving contracts in the latest allocation round, referring to the transmission charging system as “counter-productive” in its draft energy strategy. The Just Transition Commission has also criticized the current framework, calling for urgent reforms to reduce inflated costs and better support Scotland’s renewable energy ambitions
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