The cost of power from renewable energy is set to fall after Ofgem changed the way it charges for use of the national grid.
The move will be particularly important for Scotland as it makes renewable developments in remote locations such as Scottish islands more economically viable.
At present electricity generators are charged more the further they are from demand. Renewables are typically situated in more remote parts of the country, far from the energy hungry South East and so end up paying a premium for transmission.
Ofgem’s update will decrease the locational element of the transmission charge and also aim to take into account the type of generator.
According to Ofgem the changes will mean that in 2014 wind generators in the north of Scotland will pay £13/kW less and those in the South West £5/kw more for transmission on the grid.
The regulator hopes to reduce the current discrepancy between generation tariffs between the North and South and bolster investment in renewables, particularly in Scotland, and help accelerate the UK’s transition to a low carbon energy sector.
The development of transmission links between the Scottish islands and mainland have received a major boost. Ofgem says charges for carrying renewable-generated electricity form the islands along the proposed under-sea cables will be lower than at present.
It is proposed the new charges will come into effect on 1st April 2014.
