Delays to transmission charging reforms to cost £90mn

First Minister Alex Salmond has met with other energy experts, to include Energy Minister Fergus Ewing, to discuss the impacts of further delayed reforms for grid charging. The delays will cost Scottish electricity generators in the region of £90 million and the benefits to consumers will be postponed.

The meeting was held as a result of a recent announcement by energy regulator Ofgem. The regulator’s announcement was to delay a decision on the proposed charging structure - which would have benefitted Scottish electricity generators.

The current proposal, Project Transmit would promote greener energy through the charging structure whilst also limiting transmission costs. Ofgem will now carry out a further consultation period. It intends to then make a decision for a structure to be implemented in April 2016; a two year delay.

Salmond said:

“Today’s discussion was very helpful in assessing the impact of this unwarranted delay in crucial decision-making. There was broad consensus that the review of transmission charging over the last three and a half years has undoubtedly demonstrated the case for change – and the urgent need for clarity on the way forward.” “Wide agreement exists across industry and political circles in Scotland on the changes needed to facilitate the move to a low carbon energy mix. Following today’s meeting, I will look to meet with the Chair and new Chief Executive of Ofgem in the coming weeks to further press Scotland’s case.” Ewing continued:

“The impact of two years delay in implementation of a new system of charges equates to around £90 million of extra transmission charges for Scottish generation. The delay could also put back the long-term benefits to consumers that Ofgem highlighted as part of its proposals in August 2013.” “Scottish generators account for around 12 per cent of capacity connected to Britain’s high-voltage electricity network but pay around 35 per cent of the charges. Ofgem’s proposals have the potential to lessen this discrimination by reducing Scotland’s share to 25 per cent. This would still be double our share of generation capacity installed across Great Britain, but would be a welcome reduction nonetheless.”