Kevin Keane<\/span>Scotland environment, energy and rural affairs correspondent<\/span><\/p>\n<\/div>\n <\/span><\/div>\n<\/div>\n A huge wind farm planned off the north coast of Scotland will not be built unless “unfair” transmission charges are overhauled, the developer has warned.<\/p>\n The 125-turbine West of Orkney wind farm had planned to generate enough electricity to power two million homes by 2029.<\/p>\n But the consortium behind the project says the cost of connecting to the electricity network \u2013 which is highest in Argyll and the north of Scotland – makes it impossible to compete against projects proposed in England.<\/p>\n The UK government says it is considering the charges as part of a wider review.<\/p>\n<\/div>\n Transmission charges are imposed on power generators to build and maintain the network of pylons and underground cables which carry high-voltage electricity around Great Britain.<\/p>\n The charges for connecting to the grid were designed to encourage generators to build power stations close to where it is consumed.<\/p>\n It means they are the lowest around London and the south of England, where the electricity travels the shortest distance to reach the most densely populated group of consumers.<\/p>\n<\/div>\n Some regions even receive payment subsidies to connect their projects to the transmission network. <\/p>\n But with the switch from fossil fuels to renewable generation, the prevalence of wind is now considered the most important factor in selecting a location to build a wind farm.<\/p>\n The West of Orkney development’s project director, Stuart McAuley, says it is “an unfair system” for projects located in the north of Scotland. <\/p>\n “That is where the highest wind speeds are, and therefore the highest resource for renewable energy,” he says.<\/p>\n “However, with the existing system we are penalised for that.”<\/p>\n He says the transmission charge can increase costs by up to 30%, which makes the project uncompetitive when bidding for government contracts against renewables developments further south which do not have the same burden.<\/p>\n<\/div>\n McAuley says \u00a3100m has already been spent on the two gigawatt wind farm, which would be located west of the Orkney mainland and north of the Sutherland coast.<\/p>\n Cables on pylons would carry the electricity from Caithness to Peterhead in Aberdeenshire, where it will link to a planned subsea cable running to Lincolnshire in the East Midlands.<\/p>\n At its peak, 80 people were working on the project \u2013 but that has been cut to a handful of skeleton staff until the transmission charging issue is resolved.<\/p>\n He added: “At the moment, the investment has to stop, into the project, until we can see a clear route to market.”<\/p>\n West of Orkney is being developed by a consortium involving Corio Generation, TotalEnergies and Renewables Infrastructure Development Group.<\/p>\n The project is about half the size of the proposed development at Berwick Bank, off East Lothian, which could become the world’s largest offshore wind farm.<\/p>\n<\/div>\n Last week the UK government announced that it had guaranteed a minimum price for electricity supplied from Berwick Bank.<\/p>\n It was one of two offshore wind projects in Scotland to be awarded a Contract for Difference, along with the smaller Pentland floating offshore wind farm off Dounreay.<\/p>\n However, industry body Scottish Renewables has warned that transmission charges make it too expensive for most new projects to be built in Scotland.<\/p>\n It says the problem is most acute in the north of Scotland because it is furthest away from the UK’s biggest population centre around London and the south of England.<\/p>\n West of Orkney is the first project to explicitly say that deveopment has stalled because of transmission charges.<\/p>\n But Scottish Renewables CEO Claire Mack says: “If we look at the economics around that project versus some others, we can see there are many in the same boat.<\/p>\n “That’s deeply worrying for me because I want to see Scotland being at the heart of the energy mix.”<\/p>\n<\/div>\n Projects like Berwick Bank and West of Orkney will play a significant part in the UK government’s clean energy commitments.<\/p>\n Its Clean Power 2030 plan is for 95% of the UK’s electricity to come from low carbon generation by the end of the decade.<\/p>\n Announcing backing for the Berwick Bank project last week, UK Energy Minister Michael Shanks insisted the government was looking at transmission charges as part of a review of electricity markets.<\/p>\n But he said there needed to be a more strategic approach to planning the country’s energy system.<\/p>\n He added: “At the moment it is market signals that drive this.<\/p>\n “We actually think we should take a much more holistic, strategic approach and say: ‘Where do we want power, where does it benefit the system’.”<\/p>\n The Scottish government expressed its disappointment that only two projects were awarded contracts in the latest allocation round.<\/p>\n Its draft energy strategy describes the transmission charges as “counter-productive”, while the Just Transition Commission says the system inflates costs and needs urgent reform.<\/p>\n<\/div>\n<\/div>\n![\"BBC](\"https:\/\/ichef.bbci.co.uk\/news\/480\/cpsprodpb\/2b30\/live\/03c3eb70-f522-11f0-ba9e-6162a5db7583.jpg.webp\")
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