A growing north-south divide could risk future investment in major
renewable energy projects worth billions of pounds to Scotland, according
to a leading industry figure.
By Perry Gourley
The concern centres on the way charges are levied for using the GB-wide
electricity transmission system which makes it more likely that projects in
heavily populated areas will receive backing under a renewable energy
Adam Morrison, project director of the proposed Moray West offshore wind
farm off the Aberdeenshire coast, has now called for immediate reform to
address the problem.
He argues the current mechanism – known as Transmission Network Use of
System (TNUoS) charges – risks making projects that are more distant from
population centres prohibitively expensive as it increases costs to
generators depending on how far they are from the big demand centres in the
south-east of the UK.
Higher costs for northern generators makes it more difficult to win subsidy
support under the Contract for Difference auction system developed by the
UK government where only projects bidding the lowest price to produce power
Morrison said the financial burden of grid charges which were affordable
when renewable prices were high becomes uneconomical at the sub-£50 per
megawatt hour (MWhr) level seen in the last CfD auction in 2019 after huge
industry progress on cutting costs.
“When renewables were £150MWhr, TNUoS represented only about 4 per cent of
the cost per unit generated in the north, and could be absorbed,” said
But the falling cost of offshore wind has meant TNUoS charges now represent
a much greater burden of around 17 per cent, making northern projects more
expensive compared with projects in the south.
“New projects in the north, which like Moray West have planning consent and
are ready to provide benefits, are becoming stranded on the drawing board
just because of their location,” said Morrison, who was head of electrical
at sister site Moray East which is now under construction.
“Reform is needed now to encourage, rather than discourage, the development
of renewable resources where they are found.”
Morrison’s comments came in an article published by Scottish property
consultancy Galbraith’s energy magazine.
Partner Richard Higgins said: “The Crown Estate in Scotland has recently
opened the bidding process for the next round of offshore windfarm projects.
“As offshore wind has become increasingly competitive, all aspects on the
project and operational cost side, including TNUoS, will be vital in
determining project viability.
“The wider returns to the developers, supply chain and local as well as the
Scottish economy to an extent hinge on a more level playing field.”