Scottish wind farm developers will have their costs slashed by £1.3m a year under an overhaul of network charging that will see power plants in the south pay more.
Wind farms in remote locations currently face far higher network charges, to cover the extra costs of connecting them to the power grid.
But energy regulator Ofgem says they are charged too much under the current system, particularly because they only work intermittently. It plans to cut the charges they face to reflect the fact they do not use the network when the wind isn’t blowing.
Under plans unveiled on Thursday it will more than halve the connection charges for wind farms in northern Scotland, from £25/KW to £12.21/KW. This would save a typical 100MW wind farm in north Scotland £1.3m a year.
The change, due to come into effect in April, will apply to existing plants, potentialy handing a windfall to their owners.
Wind farms in some regions closer to the grid will face higher charges, with a similar-sized farm in south west England facing an extra £500,000 a year.
The overhaul will also affect gas plants. Costs of about £25/KW for a gas plant in northern Scotland would be cut to less than £20/KW, while gas plants in the south would face slightly higher charges.
Consumers face £1.60 extra a year on their bills between now and 2020 as a result of the changes, but Ofgem said that between 2020 and 2030 it could save households £8.30 a year by encouraging power plant developers to build in better locations.
Ofgem said: “The aim of this change is to facilitate the timely move to a low carbon energy sector, while maintaining a robust and efficient supply of electricity across Britain’s high voltage network.
“The main update to the methodology is that it would better take into account the type of generator and how it uses the network to transmit power to parts of the network where the demand for that power is situated.
“In doing this, Ofgem considers that the proposed methodology change would better reflect the costs placed on the high voltage system by all forms of generation, including new kinds of generators, located at different points on the network.”
“This proposal will narrow the difference in generation tariffs between the north and south of Britain. Tariffs in the north will decrease whilst tariffs in the south will increase relative to the status quo.”
Dr Doug Parr, chief scientist at environmental group Greenpeace, said: “Ofgem’s decision to revalue the cost that energy producers have to pay to deliver their power to the national grid is great news for the renewable sector that will particularly help wind generators in Scotland.
“This decision is in line with what many of us have been asking for, the need for a strategic long term plan for the energy industry. As a result not only will this make wind even more viable as an energy source, but help consumers and the planet too.”
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