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Charges 'threaten' green energy

Plans to increase charges to remote generators could undermine renewable energy schemes in Scotland, according to campaigners.

Electricity regulator Ofgem said it was “minded to” back changes to the cost of transmission losses.

Generators nearer cities and areas of high demand, which have least losses en route to users, would pay less.

Opponents fear the changes would discriminate against projects such as wind farms in the north of Scotland.

They are concerned that such a move would encourage firms to locate in the south of England instead.

Ofgem said the scheme could lead to an overall saving of about £15m annually.

However Scottish Renewables said large and small renewable schemes could suffer, reducing the competitiveness of Scottish generation in the UK market.

Jason Ormiston, the firm’s chief executive, said: “At a time when the UK Government’s chief scientific adviser has said that climate change is the greatest threat to humanity, here we have the industry regulator penalising renewable electricity generators for generating where the resource is greatest.

“Ofgem wants to encourage more generation in the south of England whilst governments want more renewables to help tackle climate change – this is the proverbial square peg and round hole and it is time that Ofgem matches its decisions with climate change policy.”

He added that the changes could threaten a number of planned onshore wind farm schemes in northern Scotland.

Lib Dem energy spokesman Liam McArthur called on the Scottish Executive to lobby Westminster to ensure that Scottish renewables projects are not affected and consider a cut in business rates for renewables generators.

“My Orkney constituency has some of Europe’s finest renewable resources, yet Ofgem’s proposals will be encouraging potential investors to stay away,” he said.

“If the SNP are serious about encouraging business in Scotland and tackling climate change, they will act now to protect Scotland’s ambitions for renewables.”

‘Lower charges’

SNP Westminster energy spokesman Mike Weir branded Ofgem’s proposal “ludicrous”.

He added: “Scotland has the potential to be the Saudi Arabia of renewable energy but time and again Ofgem put obstacles in the way, rather than promoting this vital national benefit.”

Green MSP Patrick Harvie said the charges would “hit harder on renewable schemes the further they get from London”.

He added: “I hope that the new administration in Edinburgh will challenge this proposal urgently.”

However, a spokesman for Ofgem said the changes could bring benefits.

He said: “The estimated annual savings would amount to around £15m per year in energy terms and a reduction in carbon emissions by around 150,000 tonnes of carbon per year.

“Introducing zonal losses charges could also lead to lower charges for business and domestic customers in Scotland.”

A Scottish Executive spokesman said a transmission charging regime would actively work against the development of renewable energy resources in Scotland.

He added: “We will press for a change to Ofgem’s remit as we build an energy policy that maximises Scotland’s abundant clean, green energy resources.”

BBC News

27 July 2007