Ofgem has been consulting on the methodology for determining charges for use of the electricity transmission system, as part of its major “Project TransmiT” review of transmission arrangements.
In its detailed response, the Council argues against Ofgem’s preferred option for setting charges based on a variation of the present distance-related charging regime.
OIC argues this would leave Orkney renewables projects, together with those on the other two Scottish island groups, with much higher transmission charges than projects on the UK mainland.
Ofgem proposes to drop the ‘socialised’ or ‘postage stamp’ option under which charges would be uniform, irrespective of distance – the option favoured by all three Island groups, and by the Scottish Government - in favour of the distance-based model.
Councillor Ian Johnstone, Chair of the Council’s Development and Regeneration Committee said: “The Council has been actively involved with all stages of Project TransmiT over the last 18 months, working closely with Shetland Islands Council and Comhairle nan Eilean Siar (Western Isles Council).
“Charging is an issue of vital importance to the future development of the renewables industry in Orkney.
“The level of transmission charges could be critical to investment decisions on renewable projects.
“Orkney has some of the best renewable resources in Europe, and is at the forefront of the development of wave and tidal energy, and it makes no sense to burden it with disproportionately high transmission charges."
The Council submission proposes several ways of using Ofgem’s own methodology to bring transmission charges for the islands closer to those proposed for the mainland.
The consultation has now closed and a decision is expected from Ofgem in the Spring (2012).
Copies of the Council’s submission are available from Related Downloads section on this page.