Energy ministers meet in Edinburgh

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The Scottish Government will continue to work with Department of Energy and Climate Change (DECC) to reform electricity markets and secure Scotland’s low carbon future, Finance Secretary John Swinney said today.

Mr Swinney and Energy Minister Jim Mather this morning met Secretary of State for Energy and Climate Change Chris Huhne.

Mr Huhne is meeting the First Minister this evening, where discussions are expected to cover the UK Government’s Electricity Market Reform (EMR) process, ongoing reviews of the transmission charging regime and of Ofgem’s regulatory role.

Mr Swinney said:

“Chris Huhne, Jim Mather and I had a useful discussion about a range of important energy issues and I was pleased to hear that Mr Huhne shares our desire to further harness Scotland’s vast renewables and clean energy potential.

“I have been pleased with the close joint working we have had so far with DECC, for instance on the Green Deal, where we are seeking to implement a successful UK wide policy to improve energy efficiency in a way which supports our own Energy Efficiency Action Plan. This is a good example of collaborative working which I would like to see more widely emulated.

“We discussed the Fossil Fuel Levy, nearly 200 million pounds of Scotland’s money that is still sitting in a London bank account due to the Treasury’s intransigence to release the money as additional spend on renewables for Scotland. I urge the UK Government to deliver a pragmatic solution that accelerates the release of funding for Scotland for renewable energy projects that are ready to go now in Scotland. We can and must make progress in the short term ahead of longer term solutions needed to meet the renewable energy investment gap and the investment challenge.

“Parliament will tomorrow debate the UK Government’s proposed reforms to the electricity market, which have implications for our powers to support renewables, carbon capture and storage (CCS) and control emissions. We have a strong framework of support in Scotland and we have already said that changes could unnecessarily risk investor confidence, so I again reiterated our desire to see Scotland’s powers maintained or enhanced in the proposed reforms.

“I also raised the fact that the Western Isles interconnector was allowed to be delayed due to a combination of high transmission charges and developer liabilities. We need to fund development of grid network that can connect our Island communities and deliver renewable energy from the areas of best resource. The delay in the Western Isles shows again that the existing regulatory approach does not deliver the strategic long term investment the Scottish Grid needs.

“It is another example of failure in the GB electricity regulatory framework that acts as a barrier to renewable development in Scotland’s communities and islands. I sought assurance from Mr Huhne that he will ensure the existing approach to locational charging – that sees generators in the areas of best renewable resource pay the highest charges for using the grid – must change. I also urged him to be prepared to apply his powers to cap transmission charging to the Western Isles. I also asked that similar consideration be given for Shetland and Orkney.

“In clean energy technologies, Scotland can become a world leader in carbon capture and storage (CCS) – we have a vast capacity in the North Sea, of European significance, to store emissions from industrial coal-fired plants for the next 200 years. CCS offers vast environmental and economic benefits and with our skills and energy expertise, Scotland is the natural home for a carbon capture and storage demonstrator project and I know Mr Huhne will see that potential for himself when he visits Longannet today.

“We will continue to work closely with Scottish energy interests and with DECC to ensure Scotland can successfully become a leading low carbon economy.”