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27/06/13 10:33

Scottish Government welcome islands strike price

Energy Minister welcomes significant breakthrough.

Energy Minister Fergus Ewing has welcomed today’s announcement by the Department of Energy and Climate Change (DECC) around draft strike prices and a future capacity market and that they will bring forward a specific islands strike price as part of their Electricity Market Reform (EMR) plans. An islands strike price is a major step forward in ensuring that the huge renewable energy resources of Scotland’s islands can be realised – bringing much needed electricity to the grid and jobs and benefits to island communities.

The Scottish Government also welcomed the publication of the range of strike prices for different types of electricity generation but stated that more work is still to be done with DECC to ensure the fairest strike prices are agreed and consumer confidence is maintained. We will now work closely with DECC to ensure the capacity market and strike prices finalised later this year play to Scotland’s’ energy strengths and that and industry consumer confidence is maintained. We will do this through an Energy Bill Concordat, to embedding effective cross Government working in an integrated future GB market, with increasing opportunity for cross border trading in Renewable Energy where Scotland will play a key role.

The Scottish Government will now work to analyse and influence the final strike prices which will be determined later this year. We will publish our assessment of them and have develop programme of engagement with Scottish industry and other interests in hand to input to the consultation on the draft strike prices;

Going forward, we will look for rigorous engagement with – and detail from – DECC on how the strike prices will support and impact on low carbon and renewable generation in Scotland. We will also look closely how strike price levels will reflect the bandings in Renewable Obligation Scotland which differ from in the Renewables Obligation in England.

To make sure investment continues as we transition to EMR, the Scottish Government is committed to working with developers to enable final investment decisions to be taken ahead of EMR implementation.

Welcoming the announcement Energy Minister Fergus Ewing said:

“For months, and in many letters and meetings, the Scottish Government has been making the case for a better deal for the islands in the new UK Energy Bill and I’m delighted that the UK Government has now accepted our arguments for addressing the challenges island generators face and has announced its intention to work with us to deliver effective and targeted market support for island renewables developers.

“This significant development today comes further to the Scottish Islands Renewables Project and much work from the Scottish Government, council leaders and officials to ensure that the islands can reap the benefits of connections. However, it is disappointing that we have not received the consultation from DECC on the draft CfD and we will ensure that Scotland’s voice is heard in the months up to finalisation of these strike prices.

“Today’s announcement also comes further to Scottish and Southern Energy’s announcement that they are to submit the Needs Case to Ofgem on the way forward to develop the Western Isles transmission link. Giving consideration to whether the cable project is efficient and economical is now for Ofgem. I am now urging Ofgem to respond quickly and positively. And SSE to keep progressing.

“Together these developments show significant progress for islands generation and we will work with all stakeholders to ensure this momentum continues.”