Scotland's marine energy sector 'swimming against the tide'
20 September 2011
Scotland’s wave and tidal sector face charges of £56 million every year to connect their projects to the grid while developers south of the border would receive millions in subsidy, new figures from Scottish Renewables has revealed.
The current transmission charging regime issued by Ofgem is calculated according to where the generator is located. The north of Scotland has the highest charges anywhere in the UK with projects in some parts of the UK, such as Cornwall, receiving a subsidy payment.
Figures published todayat the Scottish Renewables Marine Energy Conference in Inverness will show that the proposed 1600MW (Megawatts) of wave and tidal projects in the Pentland Firth and Orkney Waters face an annual grid charge of £56 million, compared to an £11 million subsidy if they were sited off the south west coast of England - home to Wave Hub, the only other test site for marine renewables in the UK.
Commenting on the figures, Niall Stuart Chief Executive of Scottish Renewables, said: “Scotland has long been recognised internationally as the leader in pioneering wave and tidal Research and Development and is home to 25 per cent of Europe’s tidal resource and 10 per cent of its wave resource. However, these charges could actually result in development going elsewhere, despite Scotland’s fantastic wave and tidal resource.
“High charges are acting as a barrier to investment and development in Scotland, and costs threaten to slow progress towards both the Scottish Government and UK Government’s 2020 renewable energy targets.
“Any slowdown in the industry’s development will place in jeopardy the significant potential economic benefits of this new sector and its supply chain identified in the Marine Energy Road Map – 2,600 jobs and £2.4 billion of investment.
“The projected grid charge bill for the Pentland Firth and Orkney Waters in the first year of operation is £2 million a year more than all the direct public sector support to the wave and tidal industry in its development. This is hardly the way to support and build this new industry.
Ofgem is currently reviewing the charging framework known as the Transmission Network Use of System (TNUoS) through Project TransmiT.
Mr Stuart added: “It is essential that Ofgem’s review of charges delivers the right framework to encourage investment in our world leading wave and tidal sector, and supports progress towards our ambitions for marine energy development around Scotland’s coastline.”
The Scottish Renewables Marine Conference, in association with Highlands & Islands Enterprise, is taking place at Eden Court, Inverness, 19 & 20 September 2011.
Swimming Against the Tide: the impact of TNUoS on marine energy development in Scotland paper is available from Scottish Renewable website.