Scottish Renewables Briefing Project TransmiT Debate - 18 April 2012 Introduction
Scottish Renewables has welcomed Project TransmiT as the present Transmission Network Use of System charging arrangements (TNUoS) places higher costs on Scottish renewable energy generators when connecting to the electricity network than generators in other parts of Great Britain.
Ofgem has proposed a revision to the current arrangements entitled, ‘Improved ICRP (Investment Cost Related Pricing). Scottish Renewables has welcomed this as it could: o Significantly reduce the differential in charges between Scotland and the rest of the UK o Deliver lower charges for renewables in recognition of the lower demands they place on the grid. o Lead to greater investment in and deployment of renewables, especially in the north of Scotland.
However, Scottish Renewables still has concerns with Ofgem’s current proposals and these are set out below.
TNUoS tariffs
Scottish Renewables remains concerned that there could be a significant difference between the indicative TNUoS tariffs published by Ofgem (as part of the Project TransmiT review) and the actual TNUoS tariffs that ICRP would deliver in much of Scotland
This is because there is a lack of high load factor plants present in Scottish charging zones with which low load factor plants can be balanced – the principle of balancing network charges between these two types of plant is the essence of the Improved ICRP charging model.
Scottish Renewables believe that the amended indicative TNUoS tariffs could be 25-30% higher than those indicative tariffs provided by Ofgem as part of the review.
Scottish Renewables has sought reassurance from Ofgem on the issue, with the answer to this question materially affecting our support for the introduction of Improved ICRP as proposed.
Scotland’s Islands
Scottish Renewables believes that Ofgem’s treatment of island connections will place a significant hurdle in the way of renewable energy developments in the Western Isles, Orkney and Shetland.
We are concerned that the methodology used to calculate the charges for these island groups is materially different to that used for the mainland, and that these island groups are treated differently to other islands such as the Isle of Anglesey, in Wales, and the Isle of Skye, which are both charged as part of the mainland network.
We believe that the current methodology should be changed to ensure that onshore generators on the Scottish Islands are treated in a consistent manner with onshore generators on the mainland.
If this is not rectified, cheaper onshore wind generated from the islands will likely be replaced by more expensive offshore wind and the cost differential will ultimately be passed on to the consumer.
Renewable Energy Directive
Scottish Renewables has been advised that applying a different charging methodology to the Scottish islands may be inconsistent with the Renewable Energy Directive (2009/28EC) and the Internal Market in Electricity Directive (2009/72EC).
The principle of non-discrimination between generators is clearly enshrined in both directives and the differential treatment of generators located in certain Scottish Islands and those on the mainland looks inconsistent with these European directives.
This is especially the case when the effect of this differential treatment would jeopardise investment in projects on these Scottish islands.
Further Information
Scottish Renewables has made detailed proposals to Ofgem that would ensure greater investment in renewables in Scotland, promote employment, and keep costs down for consumers. These can be accessed at: http://www.scottishrenewables.com/publications/scottish-renewablesresponse-project-transmit/ 2
For more information please contact:
Gavin Donoghue, External Relations Manager Scottish Renewables 49 Bath Street, Glasgow, G2 2DL T: 0141 353 4985 E:
[email protected]
