Ofgem has announced it is considering to approve a change to the way it calculates what generators pay to use the electricity transmission network across Britain.

It is proposed that the new charges would come into effect on 1 April 2014 and it is thought the cost of linking wind and marine renewable energy to the national grid from the more remote parts of the UK will fall. However, charges in the south look likely to increase.

The regulator revealed their plans to cut the charges per unit of electricity for firms that generate power within the north of Scotland. Currently, the charges are high and are viewed as a potential barrier to renewable energy investment. Whereas the south of England receives a subsidy per kilowatt to encourage generators to build conventional power stations close to customers.


In a statement, Ofgem said it was "minded to approve" a change to the methodology for calculating what generators pay to use the electricity transmission network across the UK.

It said it had reviewed the charges in an effort to create incentives for more green energy.

Ofgem's indicative modelling suggests that mainland network charges for wind generation in the north of Scotland would fall by about 50%, from £25/kW to £12.21, while island renewable generation would also benefit.

Transmission charges for generators and suppliers are set by National Grid, using a formula approved by Ofgem.

In response to the proposed changes, the Scottish Government said they welcomed the decision.

In a statement, it said: "We welcome the changes in transmission charges which go some way to reducing the long term discrimination against Scottish generators.

"This new approach will reduce the scale of charges facing some generators in Scotland. It is a significant success in the long campaign for fairness by the Scottish Government and the Scottish energy sector. It will also substantially reduce the charges faced by renewable generators in the North of Scotland, giving a further impetus to Scotland's renewable revolution.

"However there remains significant transmission charge discrimination which is inhibiting electricity generation in central Scotland and we will continue to press for a fair solution."

(JP/IT)