The project, one of three onshore wind farms proposed by the local authority, is expected to play a key role in boosting renewable energy production and supporting Orkney’s net-zero ambitions.

However, plans for a similar development at Wee Fea on the island of Hoy have been paused whilst a reappraisal of the project is carried out, in light of the current grid connection costs attached to the project. No timeline has been confirmed for when the proposal may be revisited.

A decision on a third project in Faray will come in front of councillors in 2027. 

Orkney Islands Council has been developing proposals for council-owned wind farms since 2016, with a view to securing a new interconnector for Orkney, as well as generating income for the local authority to protect council services.

The project at Quanterness – which comes at an estimated build cost of £50m - will generate a clear profit of £3.3m per year (in today’s money) for the 25-year lifespan of the project accumulating an expected £120m over that full term.

In addition, the project will provide a £135,000 location specific community benefit scheme for community driven projects – 60% of which will go to Kirkwall and St Ola Community Council as the host community, with the remainder being split amongst the remaining 19 community councils.

The costs for the Hoy project – although identical in size – were expected to reach £77m, with the key additional element being the additional grid connection costs form the project to the Finstown substation which over the last six months have doubled from those previously quoted.

Whilst the Hoy project would still have been expected to turn a net profit, the council felt that the financial risk at this time was too high – and that further options, including other connection solutions, should be explored before any final decision is taken.

The financial models have been subject to substantial due diligence reports from external advisors and significant third-party scrutiny. Both Quanterness and Hoy had secured a Contract for Difference (CfD) a government backed revenue stabilisation mechanism for low carbon electricity generation

Planning permissions are in place for both projects until 2031.

It is intended to fund 100% of the project costs for Quanterness from debt finance, such that no further draw form the council’s Strategic Reserve Fund is required to deliver the project.

Commencement of the construction of the Quanterness project would be expected in 2027 with generation getting underway in 2028.

Council leader Heather Woodbridge said: “This is a significant moment for Orkney Islands Council and a huge decision for elected members, which will now be progressed to full council to approve in two weeks time. The business case for the Quanterness project clearly stacks up and whilst Hoy was not as robust and will therefore not go ahead at this point – the door remains open for future consideration.

“Orkney securing a new interconnector – and the economic benefits that will bring – simply would not have been possible had the council not taken a developer approach, bringing forward proposals for three council-owned projects which all contributed towards the needs case being met.

“As well as its contribution towards securing this vital infrastructure investment, the Quanterness project will also provide the council with much needed income to support vital council services. Through our recent budget challenge survey, our community was clear that they hugely value the services we provide and they want to protect them – to achieve that community aspiration this council must explore all opportunities available to us.

“The officer hours and commitment that have gone into developing this project – and the time spent by elected members scrutinising that work at every step of the way – is immense and testament to the importance and validity of the decision made in the Chamber today.”

The new electricity transmission link between Orkney and the Scottish mainland could be worth at least £371m to the Orkney economy, rising to £807m if the wave and tidal energy industry makes use of the cable too.