Its capital expenditure on the wind farm is estimated to be about £580m.
The 443MW Viking onshore wind farm is wholly owned by SSE Renewables having been developed in partnership with Viking Energy Shetland.
This is expected in July 2020. Final approval from Ofgem was conditional on Viking wind farm reaching the positive final investment decision that SSE has now confirmed. The transmission connection is critical for Viking to proceed.
Construction on the enabling works for the transmission link has started, with works on the wind farm starting late summer.
Viking will harness the excellent wind conditions in Shetland, which will result in an estimated load factor of around 48%. Once built, it will be the largest onshore wind farm in the UK in terms of annual electricity output, said SSE. The output is expected to be about 1.9TWh each year.
SSE now awaits the outcome of the consultation on Ofgem’s minded-to position to approve a 600MW transmission connection from Shetland to the GB mainland, expected in July 2020. Final approval from Ofgem was conditional on Viking wind farm reaching a positive final investment decision which this announcement confirms. The transmission connection is critical for Viking to proceed.
SSE’s decision is conditional on the outcome of several industry code modifications which are currently in progress. These include the code changes that facilitate the contribution from the distribution network operator, SHEPD, to the cost of the transmission link. Ofgem is expected to publish a decision on these ahead of the decision on the needs case.
SSE Renewables managing director Jim Smith said: “Viking wind farm will help kick-start the green economic recovery, bringing much needed low-carbon investment to Shetland. In doing so, it will trigger the building of the associated transmission connection to the islands, which will itself help resolve longstanding security of supply issues on the island.”
Scottish government energy minister Paul Wheelhouse said: “This is excellent news for Shetland, and for Scotland’s renewable energy and climate change ambitions. The Viking wind farm project is also a great symbol for the green recovery that the Scottish government is determined to foster and encourage, as we move through and beyond the current coronavirus pandemic.
“This decision is of sufficient scale to act as the trigger to unlock the much anticipated major investment in a high voltage connection from Shetland to mainland Scotland, subject to a final decision by Ofgem which we expect shortly. It is essential that the community of Shetland benefits from this project and we look forward to further news of contracts being awarded to local businesses, as well as Scotland as a whole, during the construction phase.
“I am determined that this excellent outcome should be a starting point for similar investments and connections to unlock equivalent potential and benefits on the Western Isles and in Orkney.”