Renewable energy to receive cheaper grid connection charges

The cost of connecting renewable energy to the National Grid could be made cheaper in Scotland, after electricity regulator Ofgem published new proposals. Ofgem wants a fairer system where connection charges are similarly priced.

The proposals come off the back of complaints that connecting renewable energy to the grid is too expensive for projects further away. And the change could see wind farms in the northern part of Scotland having 60% reductions in their connection charges.

Renewable energy generators further away from areas of high electricity demand are currently charged more expensive rates as it costs more to transport the energy to consumers. So while renewables in the Scottish highlands are charged top rates, projects in southern England are subsidised.

Ofgem say the proposals to make rates fairer won’t result in increased costs to homeowners, who are already paying record prices for gas and electricity through the National Grid.

Ofgem’s senior partner for transmission, Hannah Nixon, said: “The current formula was designed for a different era when Britain’s power all came from conventional sources like coal and gas. The mix of generators producing power is changing rapidly. More renewable and low carbon generators are connecting to the grid.

“So the charging formula needs to be updated to reflect the new realities of the generation mix.”

However, there are growing fears Scottish islands will miss out on the scheme, where renewable energy is rife. Renewables on the Scottish islands account for 4% of the country’s power.

But while Scottish Renewables say Ofgem’s proposals will save large scale wind farms £1.5 a year, a spokesman said he was still concerned about the extravagant rates Orkney, Shetland and the Western Isles will be charged. The reforms would charge £77,000 per MW of energy from the islands but just £2,000 in the south west of England.

Labour’s Shadow Energy Minister said: “The costs must be met by those who benefit commercially from the transmission network – the Big Six energy companies. The new regime must be transparent and fair, without deterring renewable generation.”