Island energy schemes hit by charging plans 22/12/11
Electricity industry regulator Ofgem has thrown a serious obstacle in the Western isles’s ambition to be a major exporter of renewable energy.
It plans to make island windfarms and wave schemes pay the most to transmit electricity generated in the western Isles to energy hungry cities in the south.
This means that the proposed 150MW Stornoway Wind Farm on Lewis would pay £11 million every year to link into the national grid while the same size of scheme in the South of England would only fork out around £300,000.
The regulator plans to rule out a ‘postage stamp’, or ‘socialised’, formula where all generators pay the same charge regardless of where they are located. It says this method would add £7 billion to consumers’ bills.
Ofgem is consulting on its proposals before introducing a new regime in 2013
The plans have shocked Comhairle nan Eilean Siar which had strongly hoped it convinced Ofgem that such a system is unfair.
At the moment, these charges are preventing island developers from underwriting the cost of the proposed 450MW radial connector which could bring unprecedented benefits to the islands in terms of fabrication, renewable energy research and opportunities throughout the wider supply chain.
It was largely because of these concerns that Ofgems review consultation was set up .
While the present charging formula would alter -
Comhairle leader, Angus Campbell, said: “Excessive transmission charges are currently blocking renewable energy development in the Western Isles. The benefits from this industry will be transformational for our fragile economy but there is little in OFGEM’s report to suggest that the current situation will improve.
“The Comhairle is committed to making a disproportionate contribution to the achievement of Scottish, UK and European carbon reduction targets and it is clearly in the national interest to access the world leading energy resource blowing over these islands and crashing on their shores.
“There is something fundamentally unfair in the way the islands are being treated and the Comhairle will continue to lobby the UK Secretary of State for Energy & Climate Change, his Energy Minister and the regulator for a fair deal for the Western Isles.”
Cllr Angus McCormack said: “I hope the Scottish Government will get behind us on this. The current regime is very unfair. The revenues from windfarms alone could regenerate our islands but not under this regime.”
SNP MSP Alasdair Allan said he was dismayed at the plans.
Mr Allan commented: “For far too long the UK Government has penalised renewable energy projects in the islands through excessive transmission charges. At the same time as continuing to subsidise transmission costs for power stations in the South of England."
He added: “Given that Scotland’s islands have some of the best resources, not just for wind power, but also for wave power in Europe, I find it difficult to see why the UK Government seem intent on discriminating against Scotland’s islands.
“I have today written to Ofgem asking them to clarify this report’s intentions, and will also be raising this issue with the UK Energy Minister, pointing out the unfairness of treating Scotland’s islands in this way.”