A new report from Scottish Renewables has urged Ofgem to take urgent action on network charges, warning the current system is undermining investment and risking Britain’s clean power ambitions.
The body is calling for interim reforms to the Transmission Network Use of System (TNUoS) regime while a wider overhaul is developed.
Since 2015, existing Scottish generators have faced £2.9billion in unforeseen and unavoidable charge increases, with some projects missing out on UK Government Contracts for Difference (CfD) support as a result.
Scottish Renewables has written to Ofgem seeking rapid changes, including allowing existing projects to fix charges over their operational life and enabling new projects to lock in TNUoS rates when submitting CfD bids.
Claire Mack, Chief Executive of Scottish Renewables, said: “In a strategically planned energy system with assets supported by long-term fixed prices, the role of network charging urgently needs to be re-examined to ensure it aligns with future clean energy objectives.
“It has been clear for some time that the current transmission charging regime is not fit for purpose and we have now seen projects, job and supply chain opportunities lost as a direct result.
"The UK Government and Ofgem must now get on with the enduring reforms that will ensure network charges work effectively within a reformed electricity market to support decarbonisation of the UK’s energy system at best value to consumers."
She added: “We recognise that developing and implementing a comprehensive reform to transmission charging will take time and must align with other, as yet undetermined, aspects of a strategically planned system.
"However, the UK Government’s 2029 deadline for delivering enduring TNUoS reform comes too late for operational projects which will soon become economically unviable. It also comes too late for new projects which need clarity on the TNUoS charges they will face over their operational lifetime before submitting bids in upcoming CfD allocation rounds.
“Our proposals have been developed closely with the sector and we are calling on Ofgem and the UK Government to urgently give clarity on how these will be delivered in time for Allocation Round 8.”
Simon Gill, of The Energy Landscape and author of the report, said: "Transmission charges have long been a challenge for Scottish generators, but recent forecasts indicate that both the scale of these charges and the uncertainty they create are set to increase significantly. For example, charges for generators in the north of Scotland are projected to more than double between now and the end of the decade.
“A comprehensive review of how the transmission network is funded is therefore needed. In the interim, fixing TNUoS charges for both existing and new generators would support investor confidence, drive better outcomes for consumers and support delivery of a more strategically planned energy system."