CLEAN energy projects in Scotland are set to pay £1 billion to use the UK’s electricity network while projects south of the border will be paid to connect, it has been revealed.
Data obtained under Freedom of Information by The Scotsman from industry body the National Energy System Operator (Neso) shows that forecast generation charges in 2030/31 for projects in the north of Scotland will hit £669 million while developments in central and southern Scotland will also be hit by a £291m bill.
Meanwhile, projects in England and Wales are forecast to receive a net payment of £436m that same year.
The industry body representing Scotland’s renewable energy sector has branded the UK’s transmission charging scheme as “not fit for purpose” amid a warning the set up “offers poor value to billpayers and undermines the competitiveness" of Scottish onshore and offshore wind projects.
Data obtained from the National Energy System Operator (Neso) under Freedom of Information, shows that in 2030/31 forecast generation charges for projects in the north of Scotland will hit £669 million while developments in central and southern Scotland will face a bill of £291m.
Meanwhile, projects in England and Wales are forecast to receive a net payment of £436m in the same year.
Transmission charges are currently based on the distance between where the electricity is produced and where it is used.
The fee rises when less energy is consumed close to generation, meaning that renewable projects like onshore and offshore windfarms in Scotland built miles from any residents have to pay more to connect their energy to the grid. The charges were designed to encourage generators to build close to consumers but critics say it ultimately favours projects closer to large cities in the south of England.
Claire Mack, chief executive of Scottish Renewables, told The Scotsman that these new figures show “how the UK’s current transmission charging regime is not fit for purpose”.
She also warned that the system is “seriously affecting the commercial competitiveness of Scottish offshore wind projects”.
Mack said: “Scotland is expected to play a major role in delivering the clean power the UK needs, yet projects here are facing the highest network charges while projects elsewhere are receiving net payments under the same system.
“In effect, northern generators are helping fund payments in England and Wales rather than all generators contributing fairly to the growing cost of the network.
“This offers poor value to billpayers and undermines the competitiveness of Scottish projects.”
She went on: “It makes projects harder to finance, reduces the value that can be recycled into the next generation of developments and risks slowing the build-out of offshore wind at exactly the wrong moment.
“We are already seeing the impact network charging is having on the sector, with some projects, despite having secured planning consent, unable to move forward.
“With vital CfD allocation rounds on the horizon this year and next, UK ministers and regulators need to move with real urgency to fix the current network charging regime so that Scotland can get on with delivering the clean and secure energy system our future generations will need.”
Aberdeen and Grampian Chamber of Commerce CEO, Russell Borthwick, added: “If Scotland is being loaded with the biggest grid charges while projects elsewhere are paid, that is unfair and it sends a deeply damaging signal to investors.
“That risks real consequences for the North-east - not just for developers, but for the engineering firms, ports, contractors and workers who should be at the centre of the move from oil and gas into the next generation of energy projects.”
SNP Energy Minister, Stephen Gethins, said: “The current system of transmission charges is completely unfit for purpose, and unfairly penalises Scottish renewable energy generators, putting them at a commercial disadvantage.
“The UK government has failed to set out a solution to this issue, alongside measures to address the impact of unfair transmission charges on Scottish generators because Scotland is an afterthought to them.
“Scotland is an energy superpower, and yet we find ourselves held back by UK government control of our energy. “ A NESO spokesperson said: “Transmission Network Use of System charges allow transmission owners to recover their costs of constructing, operating and maintaining the transmission system both onshore and offshore in Great Britain.
“NESO has an administrative role in forecasting and collecting these charges in line with existing regulations.”
A UK government spokesperson said: “We are reversing decades of underinvestment and delivering the biggest upgrade to the grid, as we work to halve the time it takes to build new transmission infrastructure by reforming the planning system.
"NESO has made clear that driving for clean energy saves money by fundamentally reducing our exposure to fossil fuel markets - its report shows we could save £36 billion annually if we hit our 2050 goals compared with a scenario in which we slow down.
“We are looking at transmission charges as part of our reformed national pricing review, and will update in due course.”
