Delay to Northern Isles grid connection upgrade 'threatens Saltire Prize' 21 December 2012 Last updated at 15:06 By David Miller BBC Scotland environment correspondent Plans to upgrade grid connections to Orkney and Shetland have been delayed until 2018 at the earliest, BBC Scotland has learned. The move by Scottish Hydro Electric Transmission, part of the SSE energy group, raises questions over the Scottish government's Saltire Prize. The £10m prize was set up to encourage the development of marine and tidal energy schemes in Scottish waters. Many have focused on Orkney and the Pentland Firth. The decision by SHE Transmission Ltd means the companies involved may be unable to connect to the grid because of capacity problems. It is perhaps not surprising that such a huge programme of upgrades and new connections will take longer than originally expected End Quote Niall Stuart Scottish Renewables The competition is due to run from 2015 until 2017, one year before the upgraded grid connection will be available. The rules of the competition state: "The winner will be the individual, team or organisation that achieves the greatest volume of electrical output over the set minimum hurdle of 100 GWh over a continuous two year period, using only the power of the sea." A Scottish government spokeswoman said: "The Saltire Prize challenge is a deliberately ambitious project, designed to capitalise on Scotland's world-leading marine energy resources, skills and expertise, with projects all over Scotland delivering jobs and investment, many already in the water, which has drawn interest from all over the world. We would encourage competitors to work with grid providers to help them meet their potential, while ministers continue to discuss issues around grid connection with SSE, developers and other stakeholders. Remain optimistic In an open letter, Scottish and Southern Energy said the Orkney and Shetland upgrade projects had "experienced challenges in securing planning consents and land acquisition, and will be subject to delivery constraints in the global supply chain for subsea cables." The company's director of transmission, David Gardner, added: "In addition, the Orkney link is challenged by further changes to the onshore landing arrangements and environmental constraints, which impacted on the proposed cable routing." Niall Stuart, chief executive of industry body Scottish Renewables, said: "This is of course disappointing news for those projects that will be delayed as a result of the new timescales for delivery. However, it is perhaps not surprising that such a huge programme of upgrades and new connections will take longer than originally expected. We shouldn't underestimate the scale of the work required to ensure Scotland's grid infrastructure is fit for purpose and we remain optimistic that we will continue making good progress towards our 2020 target. Maintain momentum Orkney MSP Liam McArthur, the Scottish Liberal Democrat energy spokesman, said: "The news of a further delay in delivering this vital infrastructure is a body blow and will dismay all those involved in Scotland's wave and tidal energy sector. Orkney is at the forefront of marine renewables worldwide. Enabling projects to be connected in a timely and cost-effective manner is critical, therefore, to our ambitions to be a global leader in this technology. It is also essential if Scotland and the UK are to meet our renewables and climate change targets. I have spoken to the Energy Minister, Fergus Ewing, and agreed that urgent action is necessary. We need to fully understand SSE's reasons for this further delay and look at what steps can be taken to ensure confidence, investment and momentum in the marine renewables sector is maintained over the coming years.