INVESTMENT in renewable energy is being “held up” by a failure to reform electricity transmission prices.
First Minister Alex Salmond said yesterday the industry could not wait any longer for a decision by energy regulator Ofgem that had been expected this autumn.
This week, a report from the green energy trade association, Scottish Renewables, highlighted how 1,600MW of proposed wave and tidal projects in the Pentland Firth and Orkney faced annual grid charges of £56million, compared with an £11million subsidy if there were sited off the south-west coast of England.
Mr Salmond told MSPs he had written to past and present UK governments arguing for “a level playingfield for generation across the UK”.
He said that, earlier this month, Energy Secretary Chris Huhne had indicated a “broad agreement with that approach”.
But Orkney Liberal Democrat MSP Liam McArthur welcomed an extension to the Ofgem review, Project TransmiT, to allow the issues to be thrashed out in more detail.
Mr Salmond replied: “Our belief . . . was that we would have a resolution of these matters this autumn. Why it is so important is that investment decisions cannot wait for Ofgem to have another six months of talk when we need action.”
Afterwards, Mr McArthur expressed surprise at Mr Salmond’s objection to Ofgem’s decision to allow more time for the review of transmission charges.
“Project TransmiT was widely welcomed when it was set up last year,” he said.
“All along, though, Scotland’s renewables industry has been clear that getting the decisions right is more of a priority than any deadline for reaching a decision.
“That is why the industry has been supportive of moves to give more time for TransmiT to consider the issues.”
An Ofgem spokesman said: “The industry and other stakeholders have told us that they would like more time to provide input into the review.” Ofgem now anticipates consulting on the options in December and making recommendations in the spring.