Overview

Orkney Islands Council is developing Orkney Community Wind Farms to secure a new interconnector for Orkney, to generate significant income and harness Orkney’s natural resources. The project consists of three developments – Quanterness, Hoy and Faray. Each wind farm will contain six turbines that are 149.9 metres in height from base to blade tip.

Orkney Islands Council has been developing Orkney Community Wind Farms since 2016, progressing through key phases for each wind farm. Timeline

Year and brief history of work

• 2016 Council approved principle of becoming developer of wind farms Strategic Projects Team established
• 2017 Early work undertaken assessing 4 sites for large wind farms. EOI process for all landowners in Orkney to come forward. Council decides to develop 108MW ‘Scale Wind’ project on Hoy
• 2018 Council purchase the island of Faray. Bird studies show that the ‘Scale Wind’ development on Hoy will be significantly reduced
• 2019 Ofgem rejects SSE argument that 70MW of new generation should trigger. Needs Case for interconnector and sets out that 135MW of new generation is required. Council approve further development of wind farms at Hoy, Quanterness and Faray. ‘Scale Wind’ is rebranded ‘Orkney Community Wind Farms’
• 2020 Hoy and Quanterness planning applications are submitted
• 2021 Planning permission secured for Hoy and Quanterness. Post consent Advisory Teams appointed for technical, legal and commercial advice
• 2022 Contracts for Difference secured for Hoy and Quanterness. Planning permission secured for Faray. Council approved the location-specific community benefit funding split
• 2023 Owners Engineer appointed to develop projects up to Investment Decision. Ofgem confirms approval of Needs Case for interconnector. BELLA grid connections secured. Ground Investigations survey works complete. Five Public Drop in Sessions
• 2024 Procurement of Turbine Supply and Full-Service Agreements. Desk Based Assessment undertaken by DNO exploring cable route options. Due Diligence works undertaken
• 2025 Positive FID made for Quanterness WF. Decision to pause and undertake Options reappraisal for Hoy WF

Gap the project addresses

The primary purpose for developing the wind farm projects is to secure a new interconnector for Orkney, as recognised in the Council Delivery Plan.

• Trigger the new interconnector – OFGEM has now approved a 220MW interconnector linking Orkney with the Scottish mainland at a cost of around £900 million.Approval was dependent on at least 135MW of new wind farm projects in Orkney. Without the Council’s projects, the cable would not have been approved. Orkney’s grid has been at capacity for over a decade. This unlocks future development of the energy sector, including wave and tidal. Analysis showed potential for £807 million GVA for Orkney, £1.4 billion for Scotland.
• Generate Income – Ensure all profit stays in Orkney and is socialised to benefit everyone. This money will be spent to:
  o Preserve and enhance Orkney services like social care, education, roads and transport.
  o Deliver a location-specific community benefit scheme.
• Contribute to carbon reduction – In May 2019 we joined organisations around the world in declaring a climate emergency. Council plan commitments to work towards becoming net zero and grow our green economy.

Ownership model

100% owned by Orkney Islands Council.

Policy and funding

Orkney Islands Council have funded the development costs of these projects to take the projects to Investment Decision.  Following successful Investment Decision, the intention is to secure debt finance to fund the build out of the projects.

Impact to date

The fact that these projects have triggered the Needs Case for the new Interconnector and construction works have begun on this new cable and substation.  Unlocking of future development of the energy sector as detailed in 2a above.

Carbon savings: We expect carbon savings of roughly 4,000 tonnes per turbine per year which could save 84,000 tonnes of CO2 per year. To put that into context in 2016, Orkney produced 150,000 tonnes of CO2 offering a significant contribution to meet Orkney’s carbon reduction aspirations.

Contribution to just transition

Citizens, communities and place:

• Deliver a location-specific community benefit scheme. Community Benefits – Orkney Community Wind Farms

Jobs, skills and education:

• Job opportunities are created to support this development. Within the Orkney Islands Council there is a Strategic Project Team consisting of three FTE working directly on this project. The SPT also gets support from the wider OIC services including, Legal, Engineering, Procurement and Finance predominately with support from other departments in different forms.
• The civils and electrical work will create job opportunities for local contractors to tender for.
• The turbine suppliers will require maintenance teams and they themselves use apprenticeship schemes which enables training and education.

 Fair distribution of costs and benefits; Business and Economy:

• 100% owned by Orkney Islands Council.
• Profits remain within in the OIC.
• Deliver a location-specific community benefit scheme.

Adaptation and resilience:

• Renewable infrastructure, supporting the transition from fossil fuels.
• As well as generating significant income and community benefit for Orkney, Orkney Community Wind Farms allowed the Council to join other local developers in making a meaningful contribution to a Needs Case for a new interconnector for Orkney, which also supports the vital renewable energy industry in Orkney.
• In June 2023, Ofgem, the UK’s energy regulator, approved the need for a new cable. This followed a public consultation the regulator held regarding the proposals of the project and the need for an electricity link from Orkney to the Scottish mainland.
• To approve the ‘Needs Case’ for the cable, the regulator required a total of 135MW of renewable generation to justify a 220MW cable installation.
• Orkney Community Wind Farms will contribute nearly 90MW, which made an essential contribution to meeting Ofgem’s requirements for renewable generation.
• The cable will also open up opportunity for the development of wave and tidal technologies which will bring additional benefits to Orkney including the creation of new jobs, upskilling our local workforce and investment from external sources.

 Environmental protection and restoration:

• During the planning application process, stringent Environmental Impact Assessments were undertaken in order for these projects to continue to the next phase. Please see below links to the planning consent which sets out each wind farm’s planning conditions, including environmental protection and restoration measures.
  • Quanterness: Scottish Government – DPEA – Case Details
  • Hoy: Scottish Government – DPEA – Case Details
  • Faray: Scottish Government – DPEA – Case Details

 Decarbonisation and efficiencies:

• Orkney Islands Council is committed to reducing our carbon footprint and seeks to continue supporting the pioneering renewables scene in Orkney. One of our key reasons for developing these projects is to help and create a carbon neutral future for our islands.
• Orkney produced 120% of its electricity needs in 2017/18, but there is still so much more we can do to decarbonise our local industries, heating, and transport.
• In our Council Plan we have a target outcome for A vibrant carbon neutral economy which supports local businesses and stimulates investment in all our communities.
• Although there is already a legal requirement in place for public bodies to reduce carbon emissions, our aim is to go well beyond our legislative duty. That’s why we joined organisations around the world in declaring a climate emergency in May 2019.
• We also have national targets to contribute to – net-zero greenhouse gas emissions in Scotland by 2045 and in the UK by 2050 – and to meet these targets, emissions from homes, transport, farming and industry will all have to be addressed.
• The transmission link is one major step towards addressing these challenges. Once the cable is installed and the three wind farms are operational, there is a clear indication that Orkney Community Wind Farms will provide a substantial benefit in terms of renewable electricity generation and carbon reduction.

Local heritage

Orkney’s wind farms are deeply connected to the islands’ industrial heritage—especially its pioneering history in energy innovation. They aren’t just modern infrastructure; they’re part of a long continuum stretching back nearly 200 years.

Orkney’s modern wind farms are the heirs to a long tradition: from historic mills and the first grid-connected turbine to community-controlled modern arrays and integrated energy systems. These developments echo the islands’ heritage as a testing ground and progressive community in energy—from early industrial use to global leadership in renewables.

Orkney Community Windfarm featured in Stromness Museum: What’s on at Stromness Museum | Stromness Museum

Benefits to local area

As previously mentioned, OIC’s primary purpose for developing the wind farm projects is to secure a new interconnector for Orkney, as recognised in the Council Delivery Plan.

• The benefit to the Orkney economy: The transmission link, and the renewable generation it enables, will have a significant positive impact on the Orkney economy. We have developed two scenarios to evaluate the Gross Valued Added (GVA) impact for Orkney: – The ‘Conditionality’ scenario assumes 135 MW of projects are developed to meet Ofgem’s conditions, including the three OIC projects. ‘Conditionality’ can be considered a ‘minimum benefit’ scenario. – The ‘Enabled’ scenario assumes longer-term renewable growth of around 300 MW is enabled by the transmission link, including tidal flow. The GVA benefit to Orkney is substantial – ranging from £371 million in the ‘minimum’ Conditionality scenario, to some £807 million in the Enabled scenario – a GVA benefit corresponding to between £730 and £1,591 a year over the next 45 years to each household in Orkney.
• The benefit to the Scottish economy: The GVA benefit of the transmission link and renewable generation will extend far beyond Orkney. While the ‘local’ Orkney content of the transmission link and renewable generation is large, the overall Scottish content is significantly higher given its wider and deeper business base and supply chains. Consequently, the GVA impact to the wider Scottish economy of the Orkney transmission link and the renewables it supports is considerable, ranging from £606 million in the lowest case Conditionality scenario, to almost £1.5 billion in the Enabled scenario.
• The renewable energy developed in Orkney will also contribute to achieving the Net Zero aims of the Scottish and UK governments – boosting the potential growth of marine generation and helping diversify the generation mix.
• Location specific community benefit fund
• Jobs – Council staff/capital works and operating – turbine technician jobs
• Wider benefits relating to the transmission interconnector – take from above regarding the GVA values for Orkney and Scotland. A transmission link for Orkney – An impact analysis on the Orkney economy was undertaken by an independent third party.

Lessons learned

• Councils can take on this developer approach and develop viable renewable projects and help contribute to Net Zero whilst creating an income generation stream to preserve and enhance council services.

Constraints and challenges

• Limited local resources – in terms of construction of these projects – require seeking external/non-local companies to undertake majority of the works.
• Council procurement process and governance not designed for building wind farms. Challenging procurement exercises when procuring bespoke services, like procuring wind turbines and at the same time, these companies adhering to the Council’s procurement process.
• Due to the remoteness of the Orkney Islands, we have experienced a significant uplift on capital costs for these projects, compared to similar developments located on mainland Scotland.

Replication and scaling

This project consists of three wind farms located on Orkney and surrounding islands. Which is therefore a replication in essence as they are at different phases.

• Alignment with Scottish Government Fair Work First criteria
• If they have gone beyond Fair Work First by incorporating broader values on fair work
• For larger organisations, whether a union recognition agreement is in place.

This did not apply to co-operatives structures and membership-based initiatives, though all projects and initiatives were given room to provide any detail on fair work practices deemed relevant.

The following information was provided:

• Fair work practices are within OIC policy.
• Please see below links which the Council follow:
• Fair work and procurement – Public sector procurement – gov.scot
• Procurement Strategy