Double amount in subsidies for Scots power set to make waves

Published Date: 20 September 2008
By Jenny Haworth

NEW wave energy schemes in Scotland are set to receive more than double the level of subsidies than those in England, it has emerged.

The Scottish Government hopes the new system will help attract the renewables industry to Scotland.The Renewables Obligation system of subsidies would also see wave projects in Scotland get five times the level of subsidy as wind and hydro.Wind projects currently get about £47 for every megawatt hour of power produced. If the new plans are adopted, a wave scheme would get five times this amount, or about £235. In contrast, similar schemes in England are set to get just two-fifths the amount of those in Scotland, and just double the amount paid to wind farms, or about £94 per mega watt hour. In the past year the Renewables Obligation has added £12 to the average fuel bill and Scottish Government officials say the new banding would add a maximum of another 40 pence.A Scottish Government insider admitted the new system, which is out for consultation, was in part a bid to "get one over" on England, by attracting wave projects to Scotland.Jim Mather, the energy minister, said: "The changes we propose give Scotland a lead over other parts of the UK. We are taking every opportunity to make Scotland the place to develop, test and generate electricity from our huge natural resources."In doing so we can create a new, world-leading industry here in Scotland while taking a global role in tackling climate change and reducing emissions."It is estimated Scotland has 25 per cent of Europe's wave renewables potential, and 10 per cent of its tidal potential. The Scottish Government aims to provide 50 per cent of electricity from renewable sources by 2020, and aspires to become the European leader in green energy. It has already announced its £10 million marine energy Saltire Prize.Jason Ormiston, chief executive of Scottish Renewables, the green energy trade body, said he was pleased by the support for renewables.He said: "The industry has always appreciated the support from the Scottish Government by this administration and the previous administration because they have recognised the economic benefit that can be brought to Scotland but also the environmental benefit of tackling climate change. We have a reputation as a world leader in tackling climate change and we have to maintain that."However, he hit out at plans to bring in lower subsidies for tidal schemes than for wave projects. Tidal will get just 50 per cent more than wind, whereas wave will get two-and-a-half times the amount.Liberal Democrat energy spokesperson Liam McArthur MSP said the announcement sends out the right signal, but added: "This ministerial obsession with trumping the rest of the UK misses the point. Pelamis' presence in Portugal (a wave project] demonstrates that the competition is international."The new Renewables Obligation (Scotland) scheme is scheduled to start in April 2009.

BACKGROUND

THE complex Renewables Obligation scheme demands that every supplier provides a certain percentage of its electricity to customers from green sources, such as wind farms or hydro schemes.Currently they must supply 9 per cent of their energy from renewable sources, rising to 15.4 per cent in 2015.The watchdog body Ofgem issues Renewable Obligation Certificates to generators for every megawatt hour of power they provide from renewables. Generators sell these to suppliers, so they can fulfil the obligation. They currently sell for about £47. Any supplier that does not have enough certificates to meet its 9 per cent obligation must pay a fine. The money collected in fines is shared out between suppliers on the basis of the amount of certificates they had.The system does not rely on any money from government, but can affect the consumer because suppliers can pass the costs of paying for the certificates on to their customers, putting up householders' bills.