Monday, 8 December 2008

Trouble down the line

Published in The House Magazine
Policy focus Issue 1282 Monday 24th November 2008

Scotland has abundant renewable energy but is thwarted by transmission charges, says Rob Gibson

Scotland’s natural resources in renewable energy are amongst the most bountiful in Europe. They offer a tantalising economic prize to build and operate marine and onshore renewables that serve the home market and our European neighbours too.

Renewable energy development is driven by climate-change imperatives and underpinned by sound engineering developed here in Scotland. To succeed it requires rail, roads and harbour facilities to service energy hubs which adapt know-how from the oil and gas industry. It is also regenerating communities, some of which are forming clean power companies, in contrast to a mistaken metropolitan view that wrote them off as peripheral or redundant.

Renewable energy sources are, by their very nature, often distant from the markets that they need to serve, yet the transmission-charging regime set by the UK government actively works against the development of those resources. Prime examples are the huge tidal and wave potential of the Pentland Firth as well as deep sea offshore wind schemes at the Beatrice field in the Moray Firth, and huge offshore wind resources along the west coast.

While the Scottish government is doing all in its power to maximise Scotland’s vast renewable potential, the Labour UK government is holding Scotland back. Current transmission charging undermines the most efficient production by electricity generators in the North of Scotland by over £20 per kW to put energy on the grid, while generators in London would get a subsidy of £8 per kW.

The demise of cheap gas and the search for energy security must favour wind, waves and tides, free and inexhaustible, unlike uranium and hydrocarbons. So the additional charges amounting to £100m per annum for the 10,000MW generated in Scotland must be scrapped. Until the UK transmission charges are cut, Scotland will be hindered in its attempts to fulfil her renewable energy potential.

Other inhibitors include limited production capacity for wind turbines as manufacturers struggle to keep up with demand. A problem case is the threatened Vestas factory in Kintyre. The sizes of turbines and wind towers being demanded are far bigger than the facilities originally built there with public funds. Also refusals and delays in the planning process have forced both Scottish and UK law changes where a nine-month turnaround time is the aim. Grid strengthening via the Beauly to Denny power line is a long awaited key determination.

Complementary to overland transmission, first minister Alex Salmond has consistently sought the creation of a North Sea ‘super grid’ that could transmit clean power from as far north as Shetland to energy-hungry markets in northern Europe. He has welcomed the publication of the European Commission’s Strategic Energy Review which identifies a North Sea Offshore Grid as an infrastructure priority, saying: “Never before have we been so well placed to become the green energy capital of Europe. The Commission’s report designates the blueprint for a North Sea Offshore Grid as one of the six proposed infrastructure priorities. I am delighted that our clear strengths in renewable energy, and our massive renewables potential, have been recognised as contributing to European energy security.”

Meanwhile the SNP government budget has tripled funding for community and micro-generation compared to the previous Labour-Lib Dem Executive – which means £13.5m available each year over the next three years. Also budgeted are increased resources of £30.5m over three years promoting a range of sustainable development and climate-change initiatives, including a Climate Challenge Fund.

The SNP government has also published ambitious climate-change legislation to set mandatory long-term targets achieving an 80 per cent reduction in emissions by 2050; this requires emissions reductions of three per cent each year, which the UK government has now followed.

Renewables capacity in Scotland has grown by one fifth in the last year alone and can now power 60 per cent of Scotland’s homes. Scotland can be Europe’s green powerhouse even faster if it gains full fiscal powers like Norway. For now, in the mouth of recession, the £10m Saltire Prize for marine renewables is accelerating the pace. As Scots aspire to lead the renewables revolution, so greater prizes are eminently within our grasp.

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