2022-08-17
http://w3.windfair.net/wind-energy/pr/39566-sowec-scotland-transmission-offshore-wind-farm-great-britain-tariff-zone-grid-connection-charge-ofgem

Scottish offshore wind growth at risk from rising transmission charges

A new report has laid bare the impacts of the higher transmission charges faced by Scottish offshore wind generators compared to projects in the south of Great Britain.

Image: PixabayImage: Pixabay

The research, commissioned by the Scottish Offshore Wind Energy Council (SOWEC), was carried out by independent consultancy ITPEnergised and uses the latest National Grid ESO forecasts for Transmission Network Use of System charges.

While charges are already highest in northern Scotland and lowest in SW England, the report finds that charges in some zones are expected to double, compounding the challenge for Scottish projects to lower the cost of energy, compete for Government subsidies and attract continued investment into the sector.   

The report shows that:

  • The difference in charges between the highest and lowest tariff zones is also projected to double from 2016/17 to 2026/27, increasing from £23 to £48 for every kW of capacity connected to the transmission network. This increased difference is shown in the figure below.

This will see annual charges for a notional 1GW project range from in excess of £33m in the northwest of Scotland to a ‘negative charge’ of -£9m in southwest England in 2026/27.

Figure: How the gradient of zonal charging is growing steeper: 2016/17, 2021/21 and 2026/27 (see p8 of report) (Image: SOWEC)

When translated into the impact on the cost of each energy produced, presuming a constant load factor of 51 per cent:

  • The impact of charges on the cost of energy would range from £7.43/MWh to           
    -£2.04/MWh, a difference of £9.47/MWh.
  • The maximum difference between potential ScotWind and Crown Estate Leasing Round 4 projects is £8.36/MWh (Zone 4 = £7.43; Zone 25 = -£0.93).
  • TNUoS would cost Scottish projects eligible to bid in CfD Allocation Round 4 between £0.96 and £8.09 per MWh more than projects off the east coast of England. The biggest cost differences would occur for projects connecting in the north of Scotland (transmission zone 1 which is the zone closest to the majority of ScotWind leasing zones).

For comparison, successful offshore wind projects in the 2019 CfD Allocation Round secured strike prices of between £39.65 and £41.61 per MWh, meaning that transmission charges represent up to 20 per cent of project bids in the worst-affected parts of Scotland.

While National Grid ESO is yet to  publish forecasts for beyond 2026/27, the report highlights that further increases in the differential between north and south GB are expected, making Scottish offshore wind projects increasingly expensive over time, and adding to costs of existing projects.

SOWEC industry co-chair Brian McFarlane said: “On the eve of the results of ScotWind, we can see a once in a generation opportunity to build a Scottish supply chain to support the rapid offshore wind growth it will stimulate. Industry is working hard to invest in Scottish suppliers, ports and communities. However, rising transmission costs mean that the offshore wind industry in Scotland faces an uphill struggle to remain competitive with the rest of the UK to allow these significant benefits to be realised.”

Guy Madgwick, Chief Executive of Red Rock Power and Chair of the SOWEC Developer Group which coordinated the report, said: “The report shows clearly that Scottish offshore wind projects are not competing on a level playing field when bidding for Contracts for Difference.

“The level of charges is now threatening to constrain investment in Scottish offshore wind, which will in turn impact on progress to Scotland’s and the UK’s net zero targets.

Ofgem is currently looking at options to reform transmission charges and we would urge the regulator to recognise the damage done by the current system and to significantly reduce the difference in costs between northern and southern parts of Great Britain.”

Figure: How TNUoS charges affect offshore wind across the GB network (see p13 of report) (Image: SOWEC)

Source:
SOWEC
Author:
Press Office
Link:
www.offshorewindscotland.org.uk/...
Keywords:
SOWEC, Scotland, transmission, offshore, wind farm, Great Britain, tariff zone, grid, connection, charge, Ofgem




Thematically suitable Windfair.net members in the business directory

  • Newlist_logo.overspeed
  • Newlist_logo.tuev-sued-offshore
  • Newlist_xventum_logo
  • Newlist_cga_logo
  • Newlist_8.2_logo_original_twocoloured_screen
  • Newlist_logo.tuev-sued
  • Newlist_logo.druseidt
  • Newlist_anemos_logo_neu
  • Newlist_rts_wind_ag_logo_652x312px
  • Newlist_prysmian_group_logo
  • Newlist_logo.weigt
  • Newlist_energyconsult_lifecycleservices_logo
  • Newlist_logo.windparkservice-oil
  • Newlist_tuev_nord_logo_blau
  • Newlist_logo.nwea
  • Newlist_bmu_logo
  • Newlist_energiequelle_logo
  • Newlist_windrad_logo-1-rgb
  • Newlist_logo_ro-wind_mtag_e_rgb

more results



Keyword Search

© smart dolphin Gmbh 1999 - 2022 | Legal Notice | Windfair Editors | Privacy Policy | The Windfair Pocket Wind 2020