Ofgem facing legal challenge over ‘obscenely unfair’ grid charges


  By a Newsnet reporter
A leading SNP politician is preparing to take on the UK’s energy watchdog in a bid to strike a better deal for Scotland’s fast-growing green energy industry.
MEP Alyn Smith is putting together a case for legal action against Ofgem to challenge what he says is an “obscenely unfair” system which is crippling Scottish renewable energy generators to the tune of £100 million a year.

Mr Smith is angry about the huge costs inflicted on Scottish based renewable energy generation companies who are penalised to the tune of hundreds of millions in order to send their electricity to consumers via power lines.

Under the current system, Scotland has about nine per cent of the UK’s population and generates some 12 per cent of its electricity.  However it has to shell out a crippling 40 per cent of the so-called transmission charges – while companies in the south of England are actually PAID money to shift their electricity to end users.

Mr Smith (pictured), who is Scotland’s representative on the European Parliament’s Energy Committee, last night hit out at the arrangement, and said:

“We are in the ridiculous position where companies in the north of Scotland, where much of our green energy is generated, pay more than £20 a kilowatt to get their electricity into the National Grid.

“At the same time, companies in Cornwall are actually paid nearly £6 a kilowatt to transmit their power.

“This obscenely unfair system is taking about £100 million a year out of the Scottish energy market and as a result is presenting a major hurdle to our renewable energy sector.”

This week a report by Scottish Renewables highlighted the disparity in charges that sees companies in Cornwall receiving millions of pounds in subsidies in order to supply renewable electricity to the grid but generators in Orkney having to pay over £100 million to supply the same renewable power.

Mr Smith is now asking Scottish renewables companies and rural and island communities to join with him in considering a legal challenge to the current regime.

He wants the European Commission to move against UK electricity regulator Ofgem – a move which could potentially see the watchdog end up in the European Court of Justice.

Speaking at a renewables conference in Inverness yesterday, the SNP MEP said:

“Scotland has been given a glittering prize by nature – the ability to produce clean, green and reliable home energy.

“Following Scotland’s oil and gas bonanza, we should now be winning the power lottery for the second time with renewable energy from sources such as wind, wave and tidal power.

“But – just as with oil and gas – we’re being denied real access to our own assets. This has to change, and I’m working to make sure it does.”