The announcement that Ofgem intends to change its transmission charging regime to encourage more low-carbon energy has been welcomed today as “a step in the right direction”.
The SNP and Scottish Government have lobbied the UK Government extensively alongside the energy industry to change the regime which currently discriminates against renewables producers in Scotland.
The changes proposed are expected to see costs for wind power generators in the North of Scotland reduce by £13/kW, narrowing the gap with what generators in other parts of the UK are charged, but will still retain the system of basing transmission charges on location that sees companies in Scotland face far higher costs.
The changes being proposed from 1 April 2014 will see the type of electricity generated and the way in which energy generators utilise the grid factored in to the charges imposed, lowering costs for renewable generators. The new methodology will also factor in the costs of transmitting energy from Scottish islands to the mainland, by reducing the charge such generators face from the level it would otherwise have been.
The current situation sees energy generators in Scotland charged more than in the rest of the UK, with those in remote areas where renewable potential is often greatest facing the highest charges while generators in the south of England are subsidised rather than charged for the energy they produce.
Commenting, SNP MSP Mike MacKenzie who sits on the Economy, Energy and Tourism Committee said:
“Today’s announcement will see the costs faced by renewable generators in Scotland reduced – particularly in the islands – and that can only be considered a good thing.
“There is no doubt that this is a step in the right direction and I believe it should be welcomed as such. The improvements that are being announced are the result of heavy campaigning by Scotland’s energy sector and those who want to see renewables flourish and should be considered a significant victory on their part.
“That said it is a disappointment that Ofgem remain fundamentally wedded to a system that subsidises generators in the south of England while landing those in Scotland with the highest charges in the UK.
“Scotland has enormous renewable energy potential and the transmission charging system should recognise the need to prioritise and develop our renewables sector so that we can meet our ambitious climate change and renewable energy targets.
“I hope that the proposals announced today will be smoothly put into place next year and will help to encourage further growth in the renewables sector across Scotland.”