Viking Energy wind farm finances


Viking Energy estimate the project cost, in May 2009, at about £800m (up £200m from the previous month!). However the true cost could be greatly in excess of this.

Even taking this £800m figure as an initial guide, Viking Energy Ltd (a company 90% owned by Shetland Charitable Trust) share of the project is about £360m. The remaining £40m from four private shareholders. How these individuals, who include Viking Energy project officer David Thomson, plan to raise with £10m each remains to be seen.

Shetland Charitable Trust has invested funds of around £180m (at October 2009). Much of this is money currently invested on equity markets and subject to rapid change out with control of Charitable Trust. Current return target and annual spend is about £12m a year.

A proposed initial stake of 20% from these community trust funds would be £72m, however, a down payment as high as £81m has been mentioned by a Charitable Trust trustee. This represents about 50% of total funds. It is also equivalent to over 6 years planned charitable expenditure. Nobody is saying what happens to current charitable spending whilst the project is in construction phase.

Charitable Trust funds to Viking Energy debt ratioTotal project share of community funds represents nearly 200% of funds available, i.e. more than double what we actually have available ...

For the first time in its history the Charitable Trust would move from surplus into debt.

In February 2009 Viking Energy consultant, Avayl, gave an estimate of cost per turbine of £1.35m per MW, which places the project in the region of £729m, £129m more than Viking Energy's then headline total of £600m. A report to the Scottish Government estimates costs per MW at around £1.4m per MW installed. This gives around £756m cost for a 540MW wind farm. Clearly Viking Energy have played fast and loose with real costs in the past, their current £800m figure could still be seen as a guess, because no-one has ever built a wind farm of this size, on this terrain, in this area before.

Many large capital projects in Shetland run 20 - 30% over budget. The Viking Energy wind farm may be no exception to this.

Sustainable Shetland considers this wind farm a reckless gamble with community funds, at the expense of the Shetland environment.


Viking Energy have claimed various profit figures throughout the project. The main point in all these figures is to imply the project is a sure fire, guaranteed success. Unfortunately, Viking Energy do not know the final build cost, they do not know the cost of electricity transmission, they do not know the price they will get for this electricity. In short these figures are just models, or to put it more bluntly, pure speculation. The key cost element, the cost of transmission can be changed by national government. Viking Energy are lobbying hard to get the transmission charge subsidised to enable the project to make a profit. On current charging mechanisms the project is not profitable. The subsidised transmission charge would be met by... increases in consumer charges! That's you and me. The trouble with subsidies, being government controlled, they can be given, and they can be taken away. Laws can be changed. Governments come and go. The basis for this project is subsidies by way of renewable obligation certificates, subsidised transmission charges and a hope that none of this will ever change during the 25 year life of the wind farm.

A recent Advertising Standards Authority ruling told Viking Energy that they cannot continue to claim a specific value of profit or community return without actually substantiating the claims with evidence such as contracts for sale of electricity