Marine energy to face £50m Grid costs

Published on Saturday 20 March 2010 12:43

MARINE energy projects in remote waters off the coast of Scotland face paying as much as £50 million a year to connect to the National Grid while some energy schemes in the south-west of England could receive an annual grant of more than £5m, Scottish Renewables has calculated.

Under the UK's current transmission charging system, which is calculated according to location, projects in remote areas such as Orkney face paying as much as 42.13 per kilowatt (kW) for the privilege of connecting to the grid while others in the south-west of England could be subsidised to the tune of 6.98 per kW.

Scottish Renewables has calculated that Langage, a 905 megawatt Combined Cycle Gas Turbine plant in south-west England, is entitled to an annual subsidy of 5.3m under the present system while marine energy projects located in the remote Pentland Firth and Orkney Waters may have to pay up to 50m a year to transport the electricity generated to UK households.

Niall Stuart, chief executive of Scottish Renewables, said: "Marine energy offers massive environmental and economic opportunities for Scotland. We should be doing everything we can to support and nurture this new industry rather than putting hurdles in their way."

Stuart said the National Grid's location-based model is inconsistent with the government's drive to source a greater share of the UK's energy from renewable sources.

"These figures show that transmission charging is swimming against the tide of every other government policy designed to support the growth of renewables," he said. "Fossil fuel plants in the south of England are receiving heavy subsidies from the current system."

Hedd Roberts, electricity charging and access development manager at the National Grid, said electricity generators across the UK collectively share 27 per cent of the cost of installing, operating and maintaining the UK's transmission system.

In order to export their electricity, Roberts argued that Scottish households face the lowest transmission charges in the country.

While charges for areas south of the Border, which import large amounts of electricity, can be as much as 25.6 per kW, Scottish households pay 3.4 per kW. Roberts said: "Consumers do very well out of the Transmission Network Use of System Charge."

But Martin McAdam, chief executive of Edinburgh-based marine energy company Aquamarine Power, said the charging structure "fundamentally makes no sense" if the UK government wants to encourage renewable energy projects.