September 29, 2010

Going green will push Scots fuel bills up £100

By SHÂN ROSS, The Scotsman, 28 September 2010

Cash-strapped consumers face a hike in fuel bills of up to £100 a year to pay for the switch to renewable energy in Scotland, industry experts have warned.

The claim came after First Minister Alex Salmond told delegates at an international conference in Edinburgh that he was confident Scotland would be generating 100 per cent of its electricity needs from renewable energy within 15 years.

The average customer’s annual dual fuel bill is currently £1,030, with £19 of that going towards renewables.

But Nick Horler, chief executive of ScottishPower, yesterday warned consumers will have to pay more to finance the renewable revolution. Mr Horler told the Scottish Low Carbon Investment Conference that huge investment was needed to generate the power and get it to customers through a massive expansion of the electricity supply grid.

Mr Salmond’s latest ambitions for wind, wave and tidal power come less than a week after he raised the target from 50 to 80 per cent of Scotland’s electricity to be generated from renewable sources by 2020.

Yesterday he went further, saying: “By 2025, we should be up past 100 per cent.

“The level and scale of our ambition exceeds mere self-sufficiency. The future of Scotland is not just clean, green and self-sufficient but as a massive exporter of electricity from renewable sources.”

But Mr Horler said the renewables industry and the government needed to be more honest with consumers about these costs.

His call was echoed by consumer groups and fuel poverty campaigners who said it was unfair that renewables costs were being forced on consumers regardless of income and that little was being done to actively draw it to customers’ attention unless they read the small print on the back of their bills.

Accountancy firm PricewaterhouseCoopers recently produced a report which claimed the Scottish Government would have to provide funding of up to £4 billion over the next decade if the burgeoning renewables sector was to be a success.

The overall bill to pay for the renewables and low-carbon economy has been estimated at more than £200bn – including about £100bn on upgrading the grid alone. The vast majority of costs for renewable energy projects such as off-shore wind farms are financed through consumers’ energy bills.

“Top up” premiums known as Rewnewable Obligation Certificates are paid to private firms when they start producing megawatt hours of renewable energy to reimburse them for the risks taken in financing projects.

Mr Horler cautioned that a massive expansion of the electricity grid would be needed to generate the power and supply it to customers.

“Someone has to make the investment and ultimately someone has to pay,” he said.

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