Wednesday, 19 May 2010

THE WAVEOF THE FUTURE

In Scotland, the SNP Government is overseeing the development of a new generation of prototype wave power machines. This as Alex Salmond has pointed out is "another significant step" in Scotland's journey to become the green energy powerhouse of Europe.

The wave power machine, which was built in Leith, is some 180m long, weighs 1,500 tonnes and can produce 750kW of electricity. The Vagr Atferd generator is being transported to Orkney, where it will be tested in situ for three years to prepare it for commercial use. 

I mention this for a variety of reasons, one being that if you have proper powers in relation to energy development and the political will it is amazing what you can achieve. Also, energy (and energy cost) is a key issue in Scotland, there was a debate in the Scottish Parliament (on the 21st April 2010) which looked at the charges that Scotland pays to connect to the National Grid.

Basically it works like this; electricity produced not far from me here can cost me far more per kilowatt than it can someone who lives in the south-east of England. In Scotland, electricity industry leaders have been demanding an end to the 'unfair' practice, saying that these costs may have an impact on the development of some renewable electricity generation projects causing some to be delayed or abandoned.

Now transmission charges, which electricity generators pay for the cost of the national electricity grid, are a touchy subject not just for energy producers but also for energy users. The charges vary according to how far a power source is located from the main centre of demand, which is London.

So what this means is that in the north of Scotland for example, generators are charged £20.08p per kilowatt but in Central London a power source receives a subsidy of £6.41p per kilowatt. Subsidies are payable across most of southern England.

The National Grid naturally argues that the differentials encourage companies to locate power plants close to demand centres, cutting the costs of the national transmission network and reducing consumers' bills. National Grid are also on record arguing that stronger winds in northern Scotland meant that wind farms situated there generated more power than their southern counterparts and logically could afford to pay the higher transmission changes.

National Grid, a private company regulated by Ofgem, has been looking at how the costs of providing this infrastructure can be recovered from electricity producers and consumers. It has been using its existing pricing, which is already controversial in Scotland because it imposes higher charges on Scottish electricity producers to compensate for the cost of sending power to the main areas of demand in southern England.

The bottom line is that because Scotland generates more power than it consumes and decide to send it south to England they get penalised. While this may be a fact of life, it is decidedly unfair. This is all relevant because, according Jane Davidson AM, the Environment Minister to Wales (July 31, 2009) in Wales we use around 24 TWhr of electricity per year. WAG back in July 2009 then believed that with sufficient innovation and investment, the right Government framework and public support, Wales could produce over 33TWhr per year of electricity from renewable sources. 

For the record, in Scotland, which has a far stronger devolution settlement, has full powers for energy projects over 50mw. These powers for Wales now lie with New Labour’s lasting legacy - the unelected Infrastructure Planning Commission. The IPC is based outside of Wales and contains no representative or commissioner from Wales, yet is involved (as of 31st March 2010) in 9 projects either or the Welsh coast or in Wales. 

Interestingly enough successive Scottish administrations regardless of their political hue have pursued energy agendas which have ruled out nuclear power. One thing is certain we need a real debate about developing an energy strategy for Wales, one that encourages and empowers small energy producers.

To do this properly we need to make sure that the issue of the devolution of power consents for power stations over 50 Megawatts takes place sooner rather than later. In the meantime, National Grid must be rubbing their hands with glee at the prospects of more revenue. Potential alternative and sustainable energy generators in Wales beware…

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