Grid connection charges ‘must be reviewed as matter of urgency’

Grid connection charges are hampering the transmission of Scottish renewables across the UK, a panel of MPs has said.

The Scottish Affairs Committee is calling for an urgent review of the energy grid in the UK.

Under the current system, charges apply to connect to the grid in Scotland, but no such charges exist in Wales – where developers are actually paid to connect to the grid.

In a report published on Friday, the Commons committee said: “The grid is critical for renewable energy to reach consumers. Urgent investment is needed in the grid to ensure that net-zero targets are met.

“The grid needs to be reinforced and expanded to ensure that renewable energy generated in Scotland can connect to the grid and benefit the rest of the UK.

“We recommend that Ofgem completes a review of the grid in Scotland as a matter of urgency, and at the latest by the end of 2022 to implement changes in good time for the 2045 target.

“Ofgem should make bold decisions by prioritising reinforcement of the grid in areas where there is potential for a high renewable energy yield.

“Since net-zero targets have already been set in law, Scotland should be enabled to play its part fully in the renewable energy mix of the UK.”

The report also highlighted fluctuations in the charges, which are reviewed and subject to change annually.

“We recommend that the UK Government specifies that, as part of its internal review, Ofgem must consider the financial burden of transmission charges in Scotland.

“Ofgem should consider the long-term impacts on net-zero targets and aim for a way to ensure renewable energy projects have the chance to flourish over the next 30 years, rather than pushing for a short-term, lowest cost view.

“Ofgem should publish the result of their internal transmission charges review as soon as practicable, and certainly within six months.”

Committee convener Pete Wishart said: “In 2019, over 97% of electricity consumed in Scotland was from renewable energy sources. It is a great success, but more can be done to decarbonise the grid.

“In our committee’s latest report, we have identified the need to ensure Scotland is not left behind in the renewables race and nowhere is this more apparent than within the current transmission charging regime.

“We therefore strongly recommend that Ofgem must now address the issues around transmission charges in Scotland and help us meet net zero.

“We found this is not justly shared across the UK as it currently stands. Scottish developers must be incentivised, not disadvantaged.

“The bold net-zero commitments by both the Scottish and UK Governments are welcome, but delivery is essential.

“To meet net zero, the Scottish and UK Governments must work together to champion the opportunities Scotland offers, and to work with Ofgem and industry to modernise the grid for our low-carbon aspirations and tackle climate change.”

A spokesman for Ofgem said: “Ofgem is committed to achieving net-zero greenhouse gas emissions at the lowest cost to consumers while making sure generators pay proportionate costs for using the network.

“The current transmission charges mean large generators that are further from demand pay more, reflecting the higher costs of transporting the energy they generate a longer distance.

“At the same time, energy consumers in Scotland generally pay less, because they are closer to the source of generation.

“There are significant wind generation projects both in development and under construction in Scotland, suggesting that Scottish renewables are an attractive investment.

“However, we recognise the critical importance of renewables in achieving net zero, which is why, as part of our broader work, we are considering whether transmission charging arrangements are right for the future.”