Proposed increase in transmission costs to hit Scottish renewables

National Grid had recently acknowledged that the plan to raise costs charged to electric companies based in Scotland to transmit energy into the grid may have negative impact to the renewables sector.

Energy Minister Jim Mather, academics, and power companies earlier met with Ofgem and National Grid to discuss the intended change on the transmission charging system. The meeting was attended by firms Scottish & Southern Energy, EDF, ScottishPower and Scottish Renewables as well.

The proposed directive will result in more dues to be charged to Scottish power companies when they connect to the electricity grid. Critics said that the move will put the renewables sector in Scotland out of business.

Electricity generators based in Scotland, which also include renewable energy suppliers, pay over £20 per kilowatt hour to connect to the grid. While in contrast, power generators based in England get £6 subsidy per kilowatt hour. Politicians and renewable companies in Scotland however informed that even without the planned increase, the existing transmission cost faced by energy companies is still biased.

The new charging system proposed by the National Grid will eventually make Scotland-based power generators to pay as high as £100 per kilowatt hour. First Minister Alex Salmond recommended that the proposal be scraped and replaced by a fairer system, where all power generators pay the same when connecting to the electricity grid.

Earlier, Salmond had received unexpected backing from the UK government on his campaign to impede the proposal from being implemented. He believes that the directive could threaten the development of the renewables sector.