Islanders living near new energy projects could get £250 off bills
ISLANDERS living with 500 metres of new or upgraded electricity infrastructure could be in line for discounts on their energy bills for up to 10 years.
The UK Government is planning to discount energy bills for those living nearest to new onshore energy projects by up to £250 per year, up to a decade.
The scheme will initially apply only to qualifying works which start construction on or after 10 March 2025 and before 1 January 2040.
It would appear that the Viking Energy wind farm, which concluded construction in 2024, will not be eligible for the electricity bill discount scheme.
The UK Government published its scheme design for the project today (Monday), with hopes for the first payments to be made in the first half of 2027.
Applying to England, Scotland and Wales, the scheme will provide eligible households living within 500 metres of new or significantly upgraded onshore transmission infrastructure with electricity bill discounts of up to £250 per year for up to 10 years.
It said that most households will receive the discount automatically from their electricity supplier via the ‘automatic scheme’, paid in two six-monthly instalments of £125 each year.
Suppliers will also be responsible for delivering scheme benefits to their eligible pre-payment meter customers.
A minority of households eligible for the scheme will not have a standard domestic electricity supply contract so cannot benefit via this route.
These households will be able to apply to the scheme via the ‘opt-in scheme’ and would receive either a bank transfer or cash vouchers worth equivalent to £250 each year.
The UK Government said it would be publishing a list of infrastructure projects which would be expected to be eligible for the scheme later this summer.
Currently there are a number of energy infrastructure projects ongoing or forthcoming in Shetland, including a new substation on the outskirts of Lerwick and plans to build 38-metre high pylons near to Voe.
For substations and converter stations, the 500m zone will be measured from the external security fence around the infrastructure and out.
For overhead lines, the UK Government said the 500m zone would be “from the edge of the infrastructure’s limit of deviation specified in the grant of planning permission.”
Energy regulator Ofgem will publish a consultation on how it will administer the discount scheme this summer, before legislation is expected to pass through Parliament later in the year.
The scheme will not apply to care/nursing homes, purpose-built student accommodation and properties for religious communities.
Households will only be able to benefit from the scheme once, even if they fall within the 500m zones for multiple projects.
Vacant properties will also be excluded from benefitting.
There have long been hopes for Shetland to have its own energy tariff, offering people in the isles cheaper electricity for hosting large-scale developments like the Viking wind farm.
However the UK Government abandoned plans for zonal pricing last year, instead saying it would retain a single national wholesale price while “reforming the system”.
It added this was “the right way to deliver a fair, affordable, secure, and efficient electricity system”.
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