News / Ofgem plan could hinder isles renewables
A PROPOSAL to maintain high transmission charges in the Scottish islands compared to the rest of Scotland could discourage renewable energy companies from coming to Shetland.
On Tuesday energy regulator Ofgem published its proposals to change the way it charges power companies for transmitting electricity to take account of the growth in renewables.
However their preferred approach appears to discriminate against the Scottish islands in favour of the north of Scotland.
The final decision on how much to charge for the use of exporting electricity from Shetland is a key factor for the proposed Viking Energy wind farm and other renewable developments in the isles.
The three Scottish island groups are likely to join forces to lobby the government and Ofgem to ensure they do not lose out when the changes are introduced.
Scottish energy minister Fergus Ewing is backing the islands, saying that if Ofgem is unable to come up with a solution then the UK government must use its powers to cap charges to Shetland, Orkney and the western isles.
“Ofgem must deliver a solution for the whole of Scotland including the main Scottish island groups, which have enormous potential for delivering renewable energy but are currently penalised by high transmission charges,” he said.
The current charging regime increases the cost of transmitting electricity the greater the distance from the main consumers, which at its extreme sees some generators paid to transmit power in the south of England.
A new charging regime will play a major role in helping the UK meets its climate change targets to reduce carbon emissions. It will also encourage development to move northwards, especially to the north of Scotland.
Ofgem proposes adopting a new system that takes into account the variable nature of renewable generation such as wind, recognising it does not make such steady use of the grid.
Viking Energy project co-ordinator Allan Wishart said they were “puzzled” by the Ofgem report and needed to examine it more thoroughly before making comment.
He said that there had been some good news, in that the wind farm would only be expected to pay the cost of transmitting electricity to the new hub being built in the Moray Firth rather than onto mainland Scotland.
“While there is an overall positive message, I think Ofgem have pretty well side-stepped the whole islands issue and I think we now have to consider an approach to the government about this,” Mr Wishart said.
“The government and Ofgem need to realise that Viking Energy will be a catalyst to bringing an interconnector to Shetland, which creates the potential for a whole lot of other generation methods.
“If transmission charges are too high that will be a disincentive in the long term for people to make use of the vast potential for renewable energy that we have up here.”
The consultation will be closed on 14 February. More information is available from www.ofgem.gov.uk and responses should be sent to Project.TransmiT@ofgem.gov.uk.
Any questions can be directed to Anthony Mungall on 0141 331 6010 or at Anthony.mungall@ofgem.gov.uk.
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