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UK policy is holding back renewable generation in Scotland

16 September 2009

I am of the view that the UK locational pricing regime for grid access is holding back the development of renewable energy in the UK. I'm not alone. I think it constitutes discrimination, albeit perhaps indirect, against renewables, and on my reading of European Union law that makes it illegal. I do not see the British government changing policy any time soon, so I have called for the European Commission to take the UK government to the European Court of Justice.
You will be aware that we have in these islands a pricing structure that ensures electricity generators seeking to connect to the grid pay increased charges the further away from "the market" they are. This leads to electricity generators in Scotland paying considerably higher charges than those based further south.
Other countries do this better. I sit in Brussels and see other countries taking real steps to encourage renewables with nothing like the natural bounty we have inherited. I previously played an instrumental part in amending the recently approved Renewables Directive which makes clear, for the first time, that discrimination, by whatever mechanism, against the renewables sector is illegal.
The locational transmission charging regime has been challenged previously, by ScottishPower in 2005. The court dismissed the company's representation and upheld Ofgem's decision to approve the formula. However, I believe that the amendment now gives the European Commission the legal power to act.
As a first step, I have lodged a Parliamentary Question obliging the European Commission to state on the record what action it proposes to take on transmission charging in the UK. I have the backing of the renewables sector, and believe the charging regime is one of the biggest hindrances to the development of the renewables sector in Scotland.
First Minister Alex Salmond has described it as a "tax on geography", with projects in areas that can produce most renewable energy being charged more to transmit the power to population centres. Scotland, as a relatively sparsely populated country with significant renewable resources, is in a unique position to demonstrate how the transition to a low-carbon, widely distributed energy economy may be undertaken.
It is just bizarre that Scotland, which should be Europe's green powerhouse, is being held back by a pricing regime operated from London by an organisation that clearly does not have the promotion of renewables as an objective. The SNP government has made great progress in kicking on Scotland's green energy revolution, but the cost of accessing the grid remains one of the biggest obstacles, and it is an obstacle that the Scottish government currently has no power over. I think we can fix it from the European end.
While this has been a long-running saga, it may be nearing an end. Where there was previously uncertainty over the legal powers, the Commission now has muscles to flex, and I want to see them used to force the UK government to reverse this policy.
With the new Renewables Directive now in place, I hope that the Commission will be able to find some teeth and fix this problem once and for all, so the often talked of "potential" becomes a reality.
Alyn Smith, SNP MEP for Scotland
Source: Disconnector

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