Hansard

I am not sure that I entirely understand that point. I apologise for that. The point that I was trying to make was that the Government has compromised. We think that generators should be treated in the same way across the UK—that is the postage stamp solution—but we have compromised to try to get a practicable and deliverable result in recognition of the countervailing pressures that exist.

Yesterday’s announcement of charges by National Grid again reminds us of the perverse outcomes that so-called cost-effective methods can still produce. Such outcomes demonstrate clearly that the basis of charging regimes in the Great Britain electricity market is inadequate; 20th century principles that reward those who are closest to centres of demand while penalising those who are further away from them should surely no longer hold. Successful Scottish generators, including the generators of the renewable energy that will contribute 40 per cent of the UK’s renewables output by 2020, will be made to pay even higher charges than they pay at present to use the transmission network next year and in subsequent years, in order to cover the cost of the generation gap from which England is suffering.

After our coal helped to power the industrial revolution in the 19th century and our North Sea oil and gas boom saw Aberdeen become a global centre of energy excellence and innovation, we find ourselves poised to exploit some of the most outstanding wind, wave and tidal energy resources in the world, but we cannot do that with a system that deters investment. Our island communities are among our most fragile. The renewables potential of the three main island groups is such that its full exploitation would provide jobs, investment and economic security that could underpin the sustainable long-term success of communities there. Those are absolutely priority matters for the Government.

I record my recognition of all the support from island MSPs in the long work that we have done on the issue. Ofgem acknowledged the problem in December, but has still not given a firm direction on how the problem should be addressed or resolved. It has proposed that the issue might be solved with additional renewables obligation certificates or by a cap on charges from the UK energy minister. At best, those would be stop-gap measures that in only a short time would create further uncertainty in an industry in which too much uncertainty already exists, thanks to the lack of clarity on electricity market reform. At worst, the proposals would take too long to implement and would be unworkable. As the First Minister has said, transmission problems should have transmission solutions. It is for Ofgem to deliver the solution through project transmit.

I see that I have come to the end of my time, Presiding Officer. I conclude by repeating that this is a very important debate. Ofgem is represented in the gallery and is listening to the debate. I hope that this will be an opportunity for every party in the chamber to add its support for the shared objective of finding a just, fair and workable solution that will unleash the massive potential that all our islands have to benefit themselves and the planet.

I move,

That the Parliament opposes the current locational charging approach, which levies the highest charges on electricity generators across Scotland, including the areas of the best renewable energy resource, and acts as a barrier to renewable projects that can benefit local communities and contribute to Scottish, UK and EU renewable energy and carbon-reduction targets; continues to support the Scottish Government’s call for significant change to the existing charging regime, recognising that there remain strong arguments for change to a flat rate of charging for all generators; recognises and supports Project TransmiT, the independent review of transmission charging by Ofgem called for by the Parliament in April 2010; supports a transparent, thorough and effective assessment for improvements in the charging regime; welcomes the emerging outcomes for both renewable and conventional generators on the mainland, which will move away from the current status-quo approach by reducing the scale of the variance in charges currently faced by generators in mainland Scotland; urges Ofgem to deliver effective change quickly; supports calls for Ofgem to deliver a pricing structure that does not penalise the development of renewable energy in the Western Isles, Orkney and Shetland, and further urges Ofgem to recognise that the significant renewable energy resources of these island groups have potential benefits for both Scottish and UK consumers that will be best met by their integration with the wider GB market.

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