Scotland business

National grid access charges cut delayed further

Electricity tower Image copyright PA
Image caption There is now unlikely to be reform of the system before April 2016

The energy regulator Ofgem has said there will be no early cut in the charges electricity generators in Scotland pay to the national grid.

It has announced a second round of consultation with the industry about the issue.

Ofgem conceded that any reduction in charges is now unlikely within the next two years.

Scottish business minister Fergus Ewing said he was "extremely disappointed" by the news.

Critics of the charging system have said it is holding back development of renewable energy projects in the Highlands.

Producers of electricity are charged in a way which reflects their distance from major centres of population.

There is a subsidy for generators in the south of England.

The system is intended to make it more attractive to generate power close to where it is needed.

The additional delay follows an announcement from Ofgem in December 2013 that a revised pricing structure, originally pencilled in for April 2014, would not happen before April 2015.

'Discrimination'

Ofgem has said it is still minded to cut charges in the Highlands.

Mr Ewing said: "I am extremely disappointed in Ofgem's decision to delay yet again the introduction of measures to tackle the long term discrimination against Scottish electricity generators.

"In April 2008 the first minister and representatives of Scotland's electricity industry met with Ofgem and presented an unanswerable case for transmission charging reform.

"It is unacceptable that there is still no change almost six years after widespread political consensus on the need for reform was reached."

In announcing the further delay to Project TransmiT, the review of electricity transmission charging arrangements, Ofgem said: "We consider that it is important to allow generators to respond to any change within the notification period required by the user commitment arrangements, and to give suppliers sufficient lead time ahead of implementation to avoid them building risk premiums in future for fixed tariff offers to consumers.

"We consider these issues are important in order to protect the interests of consumers. This means our current view is that, were we to accept, we are now minded to implement in April 2016."

Supporters of the renewables industry have criticised the Ofgem decision.

WWF Scotland director Lang Banks said: "This is another disappointing delay at a time we should be moving more quickly to clean up the UK's power sector, cut climate emissions, and create more jobs in the renewables sector.

"Scotland already generates about a third of the UK's entire renewable electricity needs and has the potential to do much more in the future once an agreement is in place."

More on this story

Related Internet links

The BBC is not responsible for the content of external Internet sites