WHITEFORD SECURES MEETING OVER ENERGY DISCRIMINATION

Banff and Buchan SNP MP, Eilidh Whiteford, has welcomed a commitment from the Secretary of State for Scotland for a meeting over discrimination against Scottish power generators.

Speaking at Scottish Questions today (Wednesday), Dr Whiteford hit out at discrimination in connection charges which threatens to close one third of the plant at Peterhead Power Station in her constituency.

Scottish and Southern Energy (SSE) announced in March that they will be forced to close unit 2 of Peterhead Power Station in 2011 unless there is a change in the pricing regime which has Peterhead paying £20 per kw for a grid connection while London power stations are subsidised by £3 per kw.

SSE are being forced to pay an additional £7 million pounds per year on their older generator which is rendering that part of the plant uneconomic and if it closes it will reduce station capacity by a third to 1200 MW and cost over 50 jobs.

Dr Whiteford said:

“We should say enough is enough to this anti-Scottish bias which works against the development of clean, renewable energy in Scotland by forcing generators to pay millions of pounds more to use the grid.

“Scotland has overwhelming energy potential but our future wealth is being sabotaged by these unfair charges which discriminate against Scotland. Peterhead has to pay £29 million a year for the right to produce power while an identical power station in London would be paid £3million to set up shop. This ridiculous position must be brought to a halt.

“The transmission charging regime has already cost the country dear by slowing up renewable energy projects and now it threatens 600 MW of existing power at Peterhead and vital local jobs.

“The power currently lies with the London Government who regularly defend this anti-Scottish bias. The previous Labour Scottish Secretary ludicrously claimed that connection charges were not a problem for Scottish power generation, but I am pleased that Michael Moore has agreed to look at this afresh.”

Notes:

1. Background

The locational charging methodology levies higher charges on generators furthest from the main centres of demand for connection and use of the grid. This favours generation in the southern part of the UK and presents an inbuilt bias in the UK transmission regulatory system against Scottish based generation.

As a result, Scottish generators produce 12 per cent of UK generation, but account for 40 per cent of the transmission costs, or about £100 million per year more than their fair share.

The average national grid transmission charge in each local authority area is available at: http://www.scottish.parliament.uk/Apps2/Business/PQA/default.aspx?pq=S3W-27749

2. A transcript of Dr Whiteford’s exchange with the Scotland Secretary is set out below:

Dr Eilidh Whiteford: Is the Secretary of State aware that Peterhead power station pays £29m every year in transmission charges while a similar facility in London would attract a subsidy of around £3m per annum and that as a consequence Scottish & Southern Energy are planning to make 50 job losses at the Peterhead plant. Does he accept the transmission charges regime is discriminatory and is discouraging investment in renewable energy in the very parts of Scotland best equipped to produce it and will he – when he comes to the North East of Scotland as he has just pledged – agree to meet with me and with representatives of the management and workforce at Peterhead power station to discuss the transmission charges regime and the future of the Peterhead plant?

Secretary of State for Scotland (Michael Moore): As far as the transmission charging regime is concerned, she’ll be aware that this is primarily a matter for the National Grid, it is an issue that others have raised with me and OFGEM as well. It’s something I’d be keen to talk about further with her and others from the Scottish Government. There have been representations from all sides of the House on this – already it’s been a busy few days and I look forward to taking forward those discussions in the most appropriate form in the future.