The European Commission has told the UK government it will not block moves to allow wind farm projects on the Scottish islands to enter the next Contracts for Difference (CfD) auction.

A Commission spokeswoman confirmed to Utility Week it has decided not to object to a UK government proposal to allow remote island wind projects to bid for CfD subsidies.

The government had to seek state aid approval to classify remote island wind as a separate technology in Group 2 of the next round of the CfD auction, which is set to go ahead in the spring of 2019.

It covered onshore wind projects in the remote islands of Scotland, including the Orkneys, Shetlands and the Western Isles.

The Commission’s clearance was required because under the EU’s State Aid rules, which are designed to prevent companies gaining an unfair advantage by receiving subsidies, such as discriminating based on location.

Welcoming the Commission’s announcement, energy and climate change minister Claire Perry tweeted that it was “crucial to future of Clean Growth and an important milestone towards delivering the Industrial Strategy.”

Hugh McNeal, chief executive of RenewableUK, said: “Excellent news. Island wind has a huge amount of local support. New cheap onshore wind projects benefit consumers and contribute much-needed clean energy capacity. A win all round.”

The Businesses, Energy and Industrial Strategy (BEIS) department’s consultation on proposed changes to the CfD scheme, launched in December 2017, proposed the creation of remote islands wind as a separate technology category to compete in future auctions.

It justified this ringfencing by stating that such projects have to bear added costs, such as transmission costs, which set them apart from other onshore wind schemes.

Up to £557 million worth of annual funding will be available for Group 2 technologies in the next auction.

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