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Charging the wrong way - Ofgem's proposals for Scottish islands

13 Feb 12 - Neil Davidson, Public Affairs Manager

Orkney, Shetland and the Western Isles are crucial to our marine renewables future.

Yet that future could be jeopardised by Ofgem's proposals to levy unsustainable transmission charges on Scotland's island communities.

The energy regulator has put forward proposals on how to redraw the map on how generators pay for access to the UK grid.

These proposals, part of their consultation known as Project TransmiT, go some way to levelling out the charges across the UK - but still leave sky-high tariffs for the islands.
It is a technical subject, and it is easy to get mired in detail, but its effect is clear. Under Ofgem's proposals a 100MW wave project in Wester Ross would face transmission charges of £1 million per year.

Nearly eight times the cost

But move the project 40 miles to the Western Isles, and the project would face an annual charge of £7.7 million - nearly eight times the cost, and more than enough to stop it leaving the drawing board. This is a big concern. The majority of proposed wave and tidal development in the UK is island based and would face swingeing island charges.

The Crown Estate has granted 1600 MW of seabed leases to wave and tidal developers in its Pentland Firth and Orkney Waters leasing round and a further 125 MW leases elsewhere. Of these, 1150 MW are island based.

In other words 66 per cent, or two thirds of the UK's total projected wave and tidal energy development aspirations, are dependent on island connections, at a rate which is patently unaffordable.

We think this is not only unfair, but is discriminatory to island communities and the marine energy sector, and may be in breach of EU directives. It also misses the point that marine renewables are a major opportunity for UK plc.

We are not alone. We have been working closely with the Scottish Government, Highlands and Islands Enterprise, the islands councils and trade bodies Scottish Renewables and Renewable UK to put forward reasonable solutions to what appears (in Ofgem's eyes) to be a philosophical point - should Scotland's islands be treated as if they are part of the UK or not?

The answer, to us at least, is clear.

Read Aquamarine Power's response to the Project TransmiT assessment.

 
 
 

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