By RYAN TAYLOR
CALLS by Viking Energy for a fairer system of transmission charges were given further backing by the Scottish government this week.
Energy Minister Jim Mather called for the current charging regime, believed to work against rural areas like Shetland, to be transformed.
Speaking at a conference in Edinburgh organised by energy regulator Ofgem, Mr Mather said a flat charge should be made for every unit of electricity entering the national grid.
It follows news in recent weeks the Westminster government had withdrawn plans to place a cap on transmission charges, because it believed rural organisations like Viking Energy could make enough profit without them.
Earlier this year, First Minister Alex Salmond pressed the “unanswerable case” for a radical reform of the current charging system.
Shetland’s windfarm company aims to set up a major development in the Lang Kames, which will connected to the UK grid via a 550 MW cable.
But it is the cost of transmitting that power that has caused such an uproar.
The current system allows energy to be transmitted much more cheaply in the far south of England, because the energy being sent would have a much shorter distance to travel.
Viking Energy says it is the far flung places like Shetland that can best harness the wind to produce energy, and the charging system should be altered to reflect that.
A new fly in the ointment for Viking has come in the form of an open letter from Ofgem, which casts doubt on the legality of the proposed connection to Shetland.
The letter states the connection would require investment in transmission outside Britain’s internal waters.
“As a consequence of the need to explore further these legal issues, the authority (Ofgem) has not yet made any decision relating to the proposed Shetland connection.”
Viking Energy project manager Aaron Priest said it was a “legal technicality” which would be “sorted out” before long.
He added the main issue of concern from the Ofgem letter was its out of date estimates over how much cash the Shetland link would cost.
“The legal side is an anomaly that’s got to be sorted out. Of more relevance in the Ofgem letter is the indicative cost they have got there for the connections to Shetland.”
Mr Priest said the cost given in the letter of £272 million was an out of date figure that went back to 2006. It would actually cost in the region of £450 million, he said.
“It needs to be brought up to date. It’s important everybody takes a view on things and reaches a decision based on current information.”
He welcomed the support by Mr Mather, but was sceptical over how much of what he said would be taken on board by Ofgem.
“I asked Jim Mather what he thought the response might be and he said he thought there would be a dialogue and everybody would work together.
“But the chairman of Ofgem said he would be taking a `realistic view’, and you can read into that what you will. I think there is a long discussion ahead.”
Chairman of anti-windfarm group Sustainable Shetland Billy Fox said he believed Viking Energy must have known about the legal issue over where the cable should lie.
“They either did know about it and felt it was something that could be ironed out, and didn’t make it clear to the public, or perhaps they didn’t realise, and that shows a degree of ineptitude.”
He disputed the widely held view Viking Energy had been denied a level playing field.
“Ofgem would say that renewable energy is already subsidised to the hilt because of the renewable obligations certificate, and if they capped the transmission charges it would double the level of subsidy.
“I think it’s ironic the government sets up these watchdogs to get value for the consumer and when they do their job the politicians start jumping up and down.”
In a letter to The Shetland Times this week, Mr Fox also comes out against the appointment of PR firm Weber Shandwick for a £10,000 fee.
The move has been made to help Viking Energy raise awareness about its plans before it submits an application to the council’s planning department.
Mr Fox said the move was nothing more than a “blind crusade” which was being pursued with little consideration given to local opinion.