Cut in charges to boost green energy firms

By Terry Murden
Published on Sunday 13 November 2011 00:00

ENERGY regulator Ofgem is poised to hand the Scottish renewables sector a substantial benefit by lowering the cost of transmitting the power generated from wind and wave technology.

The proposal, contained in a paper seen by Scotland on Sunday, would mean huge savings for green energy companies and make Scotland more attractive to investors.

A 32-page report produced for Ofgem by consultancy firm Redpoint Energy, will go out for consultation early next month and has already encouraged lobbyists to expect the cost of transmission to come down.

Significantly, the proposals will rebalance costs which currently favour generators operating close to population centres. Those in the north of Scotland, the most expensive region, pay £22 per kilowatt while an operator in the south receives up to £15 in subsidy.

The current system is designed to give a strong signal to investors about where to site their operations, but it counts against many renewables plants, which tend to be in more remote hillier or coastal areas.

Ofgem announced a review of the system last year in order to support the transition to a low carbon economy. It has worked with National Grid and 14 industry representatives from companies such as ScottishPower, SSE, smaller renewables firms and the Scottish Government.

The report has come up with a number of what it terms provisional proposals which would reduce the cost of transmission for the north of Scotland to a best-case £10 per kilowatt but possibly as low as £5. Costs will come down in Scotland under all the proposed options, including the possibility of every generator paying the same.

Niall Stuart, chief executive of Scottish Renewables said: “These are still draft proposals but the options for change would result in significant reductions in charges for renewables generators in Scotland.

“They are in line with Ofgem’s objective of promoting investment in renewables to support the transition to a low carbon economy.

“This will reduce a significant barrier to investment in clean electricity generation in Scotland, and can only help secure progress towards both the UK and Scotland’s renewable energy and climate change targets.

“However, it is still unclear what this would mean for charges on Scotland’s islands, where development is being held back by crippling fees to access the grid and we will continue to work with the UK government, Ofgem and our members to ensure that we can harness the fantastic wind, wave and tidal resources in the Western Isles, Orkney Islands and Shetland.”

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SlyFifer

Sunday, November 13, 2011 at 08:14 AM

This is like the 'Fuel Duty Derogation' to benefit the Highlands and Islands, much talk, very little action. Level playing field, believe that's what the SDA propose. Hardly rocket science is it, more common sense and an acceptance that Scotland is a very physically diverse country as far as population centres is concerned. Same petrol price per litre across Scotland, same cost per kwh. Simpules and fair.

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a33

Sunday, November 13, 2011 at 06:51 AM

Another back door subsidy to the profiteering renwables brigade paid for by electricity consumers and a further handicap to UK manufacturers already being forced to export jobs to China and other low cost energy locations.

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