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11/07/14 12:44

FM welcomes boost for Scottish electricity sector

Ofgem announce major grid upgrade and new charging framework.

First Minister Alex Salmond has welcomed today’s announcement from Ofgem that grid charges for electricity generators in Scotland will be reduced from April 2016. The announcement is a boost to the electricity sector, giving certainty to generators in Scotland that charges will better reflect the costs that different generators place on the system.

Ofgem has also given the green light for a £1.2 billion major upgrade of the high-voltage grid in the North of Scotland, including a subsea link between Caithness and Moray – which will transport 1.2 Gigawatts of electricity and support over 600 jobs during construction.

These announcements will enable the connection of more renewable energy generation in the north of Scotland and help to meet renewable targets at a lower cost to consumers.

The news follows yesterday’s meeting of the Scottish Energy Advisory Board in Aberdeen, where industry and academic experts gathered to consider the publication of the independent Expert Commission report on energy regulation in an independent Scotland.

Mr Salmond said:

“Today’s announcements are welcome news for the Scottish electricity sector and consumers. They support the transition to a low carbon economy by encouraging renewable generation in the areas of highest resource and ensure Scotland continues to play a vital role in delivering security of electricity supply across these islands.

“Ofgem’s decision to reduce the level of discriminatory grid charges for electricity generators in Scotland is particularly welcome. It follows lengthy and detailed consultation with stakeholders and the outcome is underpinned by robust analysis that demonstrates clear benefits to consumers.

“The £1.2 billion investment by Scottish Hydro Electric Transmission will ensure continued progress towards our renewable energy ambitions, play a role in supporting future island generation and support hundreds of jobs during construction. It also underlines once again the essential role that renewable energy in Scotland has to play in meeting the UK’s long-term energy requirements.”

Notes to editors

Caithness-Moray transmission link

Scottish Hydro Electricity Transmission (a subsidiary of SSE plc), who own the transmission network in that part of Scotland, will deliver the Caithness and Moray project by 2018.

The project includes a subsea High Voltage Direct Current (HVDC) cable link between Caithness (Spittal) and Moray (Blackhillock) and a number of associated onshore works. The new link, which will feature over 100 miles of underground and subsea cable, is needed to transmit a large volume of electricity from renewable sources in the north of Scotland.

The project support over 600 jobs during construction with an estimated £300m of opportunities expected to be awarded to supply chain contractors.

Network charges

12% of total GB transmission connected capacity in 2014/15 is located in Scotland, but generators in Scotland will pay 35% of GB generation transmission charges (£165.5m out of £468m). Ofgem’s Project TransmiT proposals would lessen this discrimination by reducing Scotland’s share of transmission charges to 25 per cent.