New Clause 2 - Adjustment of transmission charges for electricity
Climate Change and Sustainable Energy Bill
2:00 pm
Malcolm Wicks (Minister for energy, Department of Trade and Industry; Croydon North, Labour)
It is a pleasure to serve under your chairmanship, Mr. Benton.
New clause 2 will increase the support that can be given to renewable generators on the Scottish islands of Shetland, Orkney and the Western Isles. It builds on a power in the Energy Act 2004 enabling the Government to adjust the charges that renewable generators in a specified area of Great Britain must pay to use the transmission network, if the charges would otherwise deter renewable development in that area. Of course, the Scottish islands have great potential for renewable development—enough, I am told, to power the cities of Glasgow, Edinburgh and Aberdeen. I have been to the Western Isles on two occasions, and I saw the potential for renewables on those wonderful islands. I very much hope that I will have the chance to visit some of the other islands in due course.
Renewable generation has important environmental benefits. The Government have made clear their commitment to supporting the development of such generation, which can help us to tackle one of the biggest challenges we will ever face: climate change. It can also bring important social benefits. Renewable development on the Scottish islands can provide a real boost to local communities. Indeed, a delegation of councillors from the islands came to see me some months ago to make the case for extending the benefits that we can give to renewable projects on the islands. I was impressed by what they told me about the community support for some of those projects and the way in which benefits can be channelled into local communities.
The power that we took under the Energy Act 2004 enables us to reduce the transmission charges that renewable generators on the islands will have to pay. Without that reduction, renewable generation on the islands would probably not be viable. The existing powers allow us to adjust charges for up to 10 years from the commencement of the provision in October 2004, so as things stand, any scheme would have to end in 2014. However, it became clear in the recent consultation exercise that renewable projects on the islands are unlikely to be operational before the beginning of the next decade. A scheme ending in 2014 would give insufficient support and would not make those projects viable. The new clause will enable us to extend any scheme to 2024, which will enable us to give the projects the support that they need to go ahead.
The new clause also makes a couple of technical changes. It will ensure that a scheme can be applied to separate islands and that the consultation requirement in the 2004 Act can be satisfied by consultation taking place before the provision in the Bill is commenced.
In summary, the Government are committed to encouraging renewable development. The new clause will give further support for renewable generation and ensure that the potential in the Western Isles, the Shetlands and the Orkneys is not wasted. I have listened carefully to the representations of colleagues representing the islands and to the local councillors who came to see me. I think that the provision is an important proposal. Amendment No. 15 is consequential, and is required to make the long title of the Bill reflect the inclusion of the new clause.