Electricity News

Tuesday 26 August 2008

Scottish nationalists believe the UK government is hampering the development of renewable energy projects such as the 300MW Viking Energy wind farm (pictured) being proposed for the Shetlands

Scottish nationalist politicians have questioned the commitment of Gordon Brown towards renewable energy north of the border, criticising high transmission charges for generators in remote areas of Scotland.

The Scottish Government has been disappointed at energy regulator Ofgem for failing to cut "crippling" charges for energy generation companies linking up to the grid in Scotland.

Friday saw its energy spokesperson in Westminster, Scottish Nationalist Party MP Mike Weir, suggesting that the UK government was "undermining the development of green energy" by apparently shelving plans to subsidise renewable energy schemes in the Scottish islands.

Mr Weir said: "Instead of encouraging green energy projects, the UK Government seems intent on undermining them. The decision to impose these crippling transmission charges threatens the development of clean, renewable energy in Scotland, and raises fundamental questions about the commitment of UK ministers to carbon reduction."

Consultation

The criticism from the ruling party in Scotland came as the UK government consulted on its decision not to adjust transmission charges for the Scottish islands, a consultation that runs until September 26, 2008.

The government, which published its view towards the end of June, had originally suggested back in 2005 that it could be necessary to reconsider transmission charges for the Shetland, Orkney and Western Isles under section 185 of the 2004 Energy Act.

UK ministers concluded that there was "no case to proceed" with a section 185 scheme, although it conceded there "may be a marginal case for a scheme for the Western Isles".

The Westminster government said: "The government is therefore minded not to try to develop a section 185 scheme for the Shetland and Orkney Islands. The government is also minded to postpone the decision on whether to develop a section 185 scheme for the Western Isles until after the Renewable Energy Strategy consultation to ensure any decision is taken in the light of new support for renewables resulting from that consultation."

As it released the statement, it also published research from consultants IPA Energy suggesting that wind developers saw a section 185 scheme as "important" in developing projects in the Scottish islands. However, IPA concluded that such a scheme was not "crucial" to wind farm development.

Consultants E-connect were then brought in to peer review IPA's findings, pointing out that the study ought to take a fresh look at the economics of wind farm development in the Scottish isles in the light of higher capital costs now being seen.

Mr Weir said the UK government's decision not to adjust the Scottish transmission charges was "ridiculous", pointing to Scotland's potential as the "Saudi Arabia of renewable energy", but suggesting that "time and again obstacles are put in the way".

"Gordon Brown claims to be serious about carbon reduction - now is the time to prove it and stop Ofgem imposing these ludicrous and discriminatory locational charges on the Scottish renewable industry," said the MP for Angus.

"No evidence"

As the story hit the headlines in the Scotsman over the weekend, the chief executive of Ofgem responded to defend the current transmission charging regime.

Alistair Buchanan said there was "no evidence that cost reflective transmission costs are somehow harming the generation of renewable energy in Scotland".

Mr Buchanan said: "There is a substantial queue of renewable generators waiting to connect, many of which are only being held back by the lack of planning consents. We are not aware of any proposed development that has not gone ahead because of network charges."

The Ofgem chief executive denied there were "special levies" on Scottish power generators, explaining that across the whole of the British energy network, charges were higher for generators further away from the users of their power.

"This is because the further a source of gas or electricity is from its end user, the more it costs to transport that energy to them," Mr Buchanan said.

The consultation on transmission charges for the Scottish islands runs until September 26, with the Department for Business, Enterprise and Regulatory Reform promising to publish its final view within three months of that deadline.

Further work on transmission charges for the Western Isles will not take place until the conclusion of the consultation on the draft Renewable Energy Strategy, which also ends on September 26 (see this New Energy Focus report) .