Expensive electricity transmission charges remain

THE future of an offshore island wave farm appears stormy as energy-regulators OFGEM announced the intention to retain local transmission charges.

On the brink of establishing the world’s largest fully consented wave farm in collaboration with the community-owned Galson Estate, renewables company Aquamarine Power describe the retention of locational charging as a principle element in the way in which generators pay to use the UK’s transmission network as ‘a bitter pill’

Company CEO Martin McAdam said: “This is a real disappointment for all renewable energy projects in Orkney, Shetland and the Western Isles, and presents a real challenge to Aquamarine Power – and the UK’s nascent marine energy sector.

“It is a bitter pill that Ofgem, despite months and indeed years of debate and lobbying, has directed the industry panel (which will work out the details of the proposal) to continue to penalise renewable generation on Scotland’s islands – home to some of the best wind, wave and tidal resources not just in Britain, but in the world.”

Mr McAdam detailed that ‘all the elements are falling into place’ regarding the 40MW wave energy projects off the west coast of Lewis – adding to the disappointment of the OFGEM decision.

“We have a 40MW lease from seabed owner the Crown Estate; we are about to sign terms with the community-owned Galson Estate for the shore-based power plant; we have applied to regulator Marine Scotland for offshore consents, and are about to apply to local authority Comhairle nan Eilean Siar for planning permission,” he said. “That is why this decision is so disappointing.”

Although no clear figures have been given in the OFGEM recommendation, the Aquamarine Power CEO points to the watchdog’s previous modelling which suggests an annual charge of £77 per KW. This, along with the annual connection costs would equate to over £3.5million each and every year for the Lewis project.

“This is a massive penalty for an early stage technology,” said Mr McAdam. “To put this in context, a renewable energy project the same size in southern England would pay just £40,000 a year. But we cannot choose where the best waves are – we have to put our projects at the periphery of the UK.”

For more on this story check out this week’s Stornoway Gazette, out on Thursday May 10th.