30,000 reasons why new green power charges must be dropped for good

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THE Scotsman today joins the growing campaign against plans to introduce crippling new charges that threaten Scotland's renewable power industry.

Energy watchdog Ofgem is considering the charges for wind and tidal energy schemes in the Highlands and Islands - where the wind and tides are stronger than almost anywhere else in Europe.

Such a decision would hamper the fight against climate change and jeopardise 30,000 potential jobs.

Today, The Scotsman is calling for Ofgem to drop the idea and work to assist the creation of renewable energy schemes in places where winds blow, waves crash and tidal flows are the strongest.

Scotland has 25 per cent of the available tidal power in Europe and 10 per cent of the continent's wave power. That - plus expertise gained from North Sea oil exploration - has led to the emergence of a fledgling industry that could turn Scotland into the "Saudi Arabia of renewable energy", creating jobs for 30,000 people.

This is no pipe dream: Scotland is already home to world-leading marine companies and one of the world's biggest wave farms is to be built off Orkney.

But a proposal that Ofgem has previously said it was "minded to" approve would put all that at risk, by significantly increasing charges for a connection to the national grid for renewable schemes far from population centres.

Ofgem had been expected to rubber stamp the move, then last Friday announced it was delaying its final decision until next spring. But delay is not good enough: Ofgem must scrap the idea.

On Thursday, the First Minister, Alex Salmond, will meet the energy watchdog to discuss what energy minister Jim Mather described as "the potential implications of the punitive charging regime on Scotland's legitimate aspirations".

The outcome of this meeting will be crucial for Scotland, according to Jason Ormiston, chief executive of Scottish Renewables. "Scotland does have significant potential if you think of wave and tidal and the windiest parts of Britain tend to be around the north and west," he says.

"But these are the places where these high transmission charges are being imposed. There will be good projects that are knocked back in the north of Scotland and more generation taking place in the south of England, more conventional generation and more carbon emissions."

In the north-west and islands of Scotland, the wind blows often enough for wind turbines to produce energy for more than half the time. In England, this figure can be below 20 per cent.

The Ofgem proposal would introduce a system that makes generators pay for the loss of electricity - in the form of heat - as it passes along cables. The longer the cables, the higher the charge. Once this would have made sense, but no longer.

Scottish Renewables warns these "punitive charges" could amount to a "don't build here" warning.

According to a report last week by Highlands and Islands Enterprise, it would mean renewable energy producers would face charges for a grid connection 30 times greater than counterparts in other European countries.

The Highlands and Islands Community Energy Company wrote to Ofgem expressing its "acute concern" that the charges would have a "disproportionate impact" on small projects.

Mike Gilson, the editor of The Scotsman, said: "These new charges would kill what is potentially a successful new industry stone dead.

"Scotland is almost uniquely placed to become a world leader in wave and tidal energy at a time when all over the world countries are trying to find ways to cut greenhouse gases.

"Not only are these charges bad for the environment, they will seriously affect the economic health of this nation. Ofgem must realise this is unacceptable and, if it continues on its present course, government must intervene to prevent what would be a travesty.

"We back Alex Salmond in his attempts to make Ofgem come to its senses.

"If he is not listened to, Westminster must take action and bring in new legislation if necessary to force Ofgem to take environmental issues more seriously."


THE 2 billion annual cost of maintaining the National Grid is paid for by power station operators that supply electricity, and also by energy companies that buy the electricity and sell it on to customers.

The charges levied do currently reflect how far the electricity has travelled.

However, the new proposed charging structure - which Ofgem previously said it was "minded to" approve - would reflect the amount of electricity lost in heat from the cables.

According to Ofgem, these losses cost about 260 million a year and create 680,000 tonnes of extra carbon emissions annually, because the lost electricity is replaced by power largely generated from carbon-emitting means. Ofgem says the new charging structure would reduce emissions by 150,000 tonnes of carbon a year and save 15 million.

However, these figures have been thrown into question by the regulator's latest statement on the matter.

It said an analysis of the environmental and financial effects of the new charges by consultants Oxera had been criticised for not being "robust" enough, using "out-of-date input assumptions and a simplified modelling approach".