Appeal to Ofgem
Scottish renewables at risk due to higher grid charges
MPs have called for a review of connection charges
Scotland’s renewables sector is being put an unfair advantage because of the higher cost of transmission, according to a new report.
MPs sitting on the Commons Scottish Affairs Committee say that some renewable projects in England and Wales have a competitive advantage as they are paid to connect to the grid, whereas Scottish projects must pay to connect to the grid.
This impacts the development of renewable projects in Scotland as it affects confidence in investment, which can create jobs and deliver a just transition.
Further, the short-term nature of transmission charges – being subject to annual review and the charges varying year on year – impacts business cases and does little to instil confidence for long-term investment decisions, said the committee.
It said it looks forward to Ofgem’s internal review of transmission charges, and hopes it considers the long-term challenge of net zero needing to underpin renewable energy progress for years to come.
The Committee heard during the inquiry that if the development of the grid continues at the current pace net zero will be challenging to meet. This is due to increasing demands such as electric vehicle charging and home energy. Therefore, a review of the grid in Scotland is urgently needed to identify changes by the end of 2022 if it is to meet the Scottish Government’s target to be net zero by 2045.
Pete Wishart: Ofgem must address the issue
The committee said Scotland has the potential to champion tidal energy production, offering an exportable product for the UK. However, limitations in previous rounds of the Contracts for Difference scheme prevented tidal projects benefiting from Government investment.
MPs welcomed the Government’s recent announcement that tidal energy is included in the fourth round of the Contracts for Difference scheme. The committee argues that the right level of investment is needed and sustained which will permit tidal projects to apply.
Scottish Affairs Committee chairman, Pete Wishart, said: “We have identified the need to ensure Scotland is not left behind in the renewables race and nowhere is this more apparent than within the current transmission charging regime.
“We therefore strongly recommend that Ofgem must now address the issues around transmission charges in Scotland and help us meet net zero. We found this is not justly shared across the UK as it currently stands. Scottish developers must be incentivised not disadvantaged.”
Claire Mack, chief executive of Scottish Renewables, said:“We welcome today’s report from the Scottish Affairs Committee.
“Scotland has some of the best renewable energy resource in Europe and harnessing this to its full potential will only be possible by removing this key barrier.
“We urge the UK Government to take this recommendation and make this a top priority to enable the delivery of our climate change targets.”