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Storm brewing over cost of wind farm electricity  

Energy generated by the wind, tide and waves may hold the key to economic prosperity for far north and island communities, but they would have to pay about the highest charges in Europe to connect to a national electricity grid.

This is the conclusion of a study commissioned by Highlands and Islands Enterprise published yesterday.

The research, undertaken by consultant Xero Energy, should strengthen the case the First Minister, Alex Salmond, is taking to electricity regulator Ofgem when they meet next Thursday.

It examined EU directives relating to renewable energy and the grid and compared UK practice with other European countries, notably the three leading renewable energy producers: Denmark, Germany and Spain.

The report was positive about Britain’s “super shallow” charging policy – which means that energy producers are charged to connect to the grid, but do not have to meet the costs of grid reinforcement to handle new energy sources.

However, the cost of connecting in north mainland areas was found to be many times greater than other UK countries – and 30 times higher than Denmark, one of Europe’s leaders in renewable energy production.

The message will be reinforced by Scottish Council for Development and Industry (SCDI) chairman Shonaig Macpherson at the SCDI Highlands and Islands Awards in Nairn tonight.

She will tell a sell-out audience of more than 270 people from business, the public and voluntary sectors, and politics, that a transmission charging system which does not penalise renewable energy projects where the resources are most plentiful is critical for high growth in the Highlands and Islands’ economy over the next decade.

She will say: “SCDI applauds the ambitions for higher generation, nascent technologies and offshore grids. But none of these will come to pass without a transmission charging regime which does not penalise projects where the renewables resources are most plentiful and streamlining of the planning systems north and south of the border in a joined-up way to enable the development of the UK grid infrastructure.

“SCDI was disappointed to hear that Highland Council’s renewables planning policy has had to be withdrawn. We hope that government – both at Holyrood and Westminster – can provide more direction. But we are concerned that energy may become a political football. If ever there was an issue where all Scotland’s political representatives could usefully work together it is this one.”

The Xero Energy report details how costs for Scotland’s island communities are ” almost certainly higher than any other European country”.

Elaine Hanton, Highlands and Islands Enterprise head of renewables, said: “The potential to produce marine and wind energy in coastal areas, offshore and on islands is absolutely vast.

“These places have some of the strongest waves, tides and winds to be found anywhere in Europe, a fact which ought to be giving Scotland and the UK an advantage over competitors.”

However, a spokesman for Ofgem said that these costs had to be put in the context of the support developers receive through the government’s renewables obligation: “We calculate that a 100mw windfarm in the north of Scotland would have an annual revenue of £19.71m per annum, but their transmission charges would be £2.16m which we don’t think is unjustifiably high.

“In addition, since 2005 there have been 160 proposals for renewable energy projects, mostly in Scotland and mainly onshore windfarms. So clearly the locational charges are not putting developers off pursuing their projects.”

By David Ross
Highland Correspondent

The Herald

14 September 2007

This article is the work of the source indicated. Any opinions expressed in it are not necessarily those of National Wind Watch.

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