Keith Findlay, 18th September 2011
SCOTLAND’s wave and tidal-energy sector faces charges of £56million every year to connect their projects to the grid, while developers south of the border will get millions of pounds in subsidies, indu-stry figures out today show.
The uneven playing field is being highlighted by industry body Scottish Renewables (SR), which warns that high charges are stifling investment and development in the sector in Scotland and threatening progress towards 2010 renewable-energy targets.
According to SR, 2,600 Scottish jobs and £2.4billion of investment are at risk.
The transmission charging system currently used by industry regulator Ofgem is based on where the generators are located.
Scotland has ended up with the highest charges in the UK, while projects in some parts of Britain – such as Cornwall – get subsidies.
Figures being announced at the SR Marine Energy Conference in Inverness today show that plans to bring 1,600 megawatts of electricity on stream from wave and tidal projects in the Pentland Firth and Orkney would invoke grid charges totalling £56million a year.
SR says that if the same projects were sited off England’s south-west coast, they would get annual subsidies totalling £11million. Niall Stuart, SR’s chief executive, said: “Scotland has long been recognised internationally as the leader in pioneering wave and tidal research and development, and is home to 25% of Europe’s tidal and 10% of its wave resource.
“However, these charges could actually result in development going elsewhere.”
He added: “High charges are acting as a barrier to investment and development in Scotland, and costs threaten to slow progress towards both the Scottish Government and UK Government’s 2020 renewable-energy targets.
“Any slowdown in the industry’s development will place in jeopardy the significant potential economic benefits of this new sector and its supply chain identified in the (joint industry and Scottish Government) Marine Energy Road Map.”
Energy Minster Fergus Ewing said Ofgem’s current approach made no sense and was a barrier to renewable-energy generation in Scotland.
He added: “It is not fit for purpose to deliver a more sustainable, low-carbon energy mix, ensure security of energy supply and meet Scottish, UK and EU renewable-energy targets.
Mr Ewing called for “fundamental and effective change” to create a charging system which did not penalise generators and developers in areas with the best renewable resources.
Ofgem is currently reviewing the charging regime, which is known as the Transmission Network Use of System.
Mr Stuart said: “It is essential that Ofgem’s review of charges delivers the right framework to encourage investment in our world leading wave and tidal sector, and supports progress towards our ambitions for marine energy development around Scotland’s coastline.”
According to SR, the likely grid connection bill for Pentland Firth and Orkney projects in their first year of operation is £2million more than all the direct public sector support to the wave and tidal industry in its development.
Mr Stuart said: “This is hardly the way to support and build this new industry.”
The SR Marine Conference, held in association with Highlands and Islands Enterprise, is on at Eden Court, Inverness, today and tomorrow.