Over the coming year Ofgem should complete an urgent review of the grid in Scotland and within six months it should review the financial burden of transmission charges in Scotland, says the Scottish Affairs Committee. It wants transmission charges and grid investment to be shared across the UK to help strengthen the Scottish renewables sector and it wants priority reinforcement of the grid where there is potential for a high renewable energy yield.
In the Committee’s report ‘Renewable Energy in Scotland’, it expresses concerns that some renewable projects in England and Wales are paid to connect to the grid, giving them a competitive advantage over Scottish projects who must pay to connect. It said this affects investor confidence and can hold back renewable energy development.
The MPs also said that the short term visibility of transmission charges – which are subject to annual review and the charges varying year on year – “impacts business cases and does little to instil confidence for long-term investment decisions”.
The committee said that:
• The UK government must ensure that in its review Ofgem “ensure renewable energy projects can flourish over the next 30 years, rather than pushing for a short-term, lowest cost view”. Ofgem should publish the result of its internal transmission charges review within six months.
• The UK government must amend Ofgem’s statutory duties to consider net zero targets in all its decision making.
• The next Contracts for Difference round should prioritise renewable energy systems, not just at the lowest cost, but with a long-term view that focuses heavily on net zero targets and best value for money, up to 2050.
• More financial support should be guaranteed by the UK Government for development of tidal energy through the CfD mechanism.
• The UK government should use part of the £12 billion outlined