Westminster Committee hears Scots offshore wind ambition in peril from electricity network charging issue

A Committee of MPs has been told northern Great Britain is being “penalised to the tune of tens of millions of pounds every year” by outdated rules which govern how the electricity network is paid for – with Scotland worst-hit.

Speaking earlier today (June 17), Scottish Renewables CEO Claire Mack hit out the system, which she said “runs entirely contrary to the government’s levelling-up commitments”.

Presenting a new report on the issue, which could deal a blow to ambitions to increase the amount of offshore wind in Scottish waters tenfold by 2030, she told how the system is:

• Bad for consumers– with the cost of added risk alone worth a possible £14 per UK household by 2030
• Bad for net-zero– by damaging the business case for green power projects outside southern England, the system risks the UK losing its best renewable resources, many of which are in Scotland
• Failing to do what it was designed to do in the early 1990s– with wildly unpredictable charges failing to reflect the cost of running the electricity network, which has remained stable for many years.
• Set to get much worse- increasing on average from £11 per kW in 2016 to a predicted £27 per kW in 2024 – an increase of 145%

A solution to the issue, Claire Mack told MPs on Westminster’s Scottish Affairs Committee earlier today (June 17), lies with the UK Government and with Ofgem, the energy regulator. They must act – as the UK Government committed to do in its energy white paper – without delay to reform “the commercial rules of the electricity system” or risk “excessive costs for consumers or a failure to reduce emissions in line with our net zero target.”

The Scottish Government has ambitions to increase the amount of offshore wind power generated north of the border almost tenfold by 2030.

Ahead of today’s committee, Claire Mack said:

“The rules which govern how the electricity network is paid for were designed 30 years ago and no longer do what they are supposed to do. They are bad for consumers and bad for the action we’re taking to tackle climate change.

“We are extremely concerned that the next auction round through which our members bid for contracts to sell the clean power they produce, which will take place later this year, will return few, if any, of the large offshore wind projects which Scotland needs if the UK is to meet its climate targets.

“The Transmission Network Use of System charges which are levied on them now mean they are almost 20% more expensive than equivalent projects in the south of England. If the UK is to have any hope of meeting net-zero carbon emissions by 2050 we must take advantage of every tool we have.

“Scotland has 25% of Europe's offshore wind resource and to effectively lock it out of the UK energy market because of an inability to see past regulations which were drawn up in the early 1990s, when the energy system was totally different, is enormously destructive.

“In addition, penalising the whole of the northern UK, which has some of the best renewable energy resource in Europe, runs entirely contrary to the government’s levelling-up commitments, through which it has vowed to tackle precisely this type of economic imbalance.”

The Transmission Network Use of System charge is not levied on European renewable energy projects, meaning it is cheaper to build wind farms there and sell the power to the UK through a growing number of interconnector cables than build home-grown clean power plants.

Ends

Notes:​

• Scottish Renewables is the voice of Scotland’s renewable energy industry. Our vision is for a Scotland leading the world in renewable energy. We work to grow Scotland’s renewable energy sector and sustain its position at the forefront of the global clean energy industry.
• Images of Claire Mack are available to download and interviews with Scottish Renewables on this issue are available, contact Nick Sharpe to arrange.
• The UK Government’s energy white paper is available on its website.
• Details of The Scottish Government’s increased offshore wind ambition are contained in its Offshore Wind Policy Statement.
• The new report, which contains graphics to illustrate Claire Mack’s comments and a simple explainer, is available on Scottish Renewables’ website