Page last updated at 15:13 GMT, Friday, 22 August 2008 16:13 UK

Anger over green power link costs

Wind farm
The Scottish Government said the decision "sent the wrong signal"

The Scottish Government has condemned a Westminster decision to shelve a planned subsidy for renewable energy schemes in Scotland's islands.

The UK Government said it was no longer minded to cap electricity transmission charges for Orkney and Shetland.

Renewable firms say their key obstacles are national grid access and planning.

Producers are charged to transmit electricity in Scotland but paid in most of England because they are closer to large centres of population.

Scottish Energy Minister Jim Mather called the move "deeply, deeply disappointing".

The UK Government said the only justification for a capping scheme to go ahead would be if renewable development in a particular area would be likely to be "deterred or hindered".

Developers don't even take projects beyond the drawing board because they know the transmission charges in the north of Scotland and the islands are so severe
Jason Ormiston
Scottish Renewables
When the scheme was first mooted in 2005, UK Energy Minister Malcolm Wicks said: "Limiting the charges paid to the National Grid by renewables generators on the Scottish islands is vital if their vast potential is to be realised."

The UK Government said more information on costs and revenues was now available and it found here was no basis for the scheme in Orkney or Shetland and only a "marginal case" for the Western Isles.

A final decision on the Western Isles has yet to be made. The UK Government said it was now keen to hear from interested parties.

A spokeswoman for the Department for Business, Enterprise and Regulatory Reform (BERR) said: "The government continues to believe that cost-reflective transmission charging is a sensible basis for charging."

She added: "Cost-reflective transmission charging is where the users of the transmission system pay according to the cost of transmitting the electricity.

"In this way, the operators take account of the true cost of transmitting electricity."

'Wrong signal'

But speaking on BBC Radio's Good Morning Scotland programme, Mr Mather said: "We need a level playing field and this is utterly the wrong signal.

"It's the wrong signal from a climate change standpoint, from creating further downward pressure on energy prices and for economic recovery in Scotland."

The move has also been criticised by campaigners. Jason Ormiston, the chief executive of Scottish Renewables, said the move could adversely affect green energy projects.

He added: "We know that developers of wind farms in Scotland don't even take projects beyond the drawing board because they know the transmission charges in the north of Scotland and the islands are so severe.

"So it's undermining investment in renewables in Scotland. I think particularly worrying is that fledgling technologies like wave and tidal will have to also pay these types of charges."

Mr Ormiston argued that could cause developers to look elsewhere.

Mr Mather, who is also the Argyll and Bute MSP, has been attending talks over the planned closure of the Vestas wind turbine tower plant in Kintyre, with the loss of 90 jobs.

Labour attacked what it called the SNP's "failure to deliver consistent support to wind energy".

But Mr Mather denied delays in the planning process were a factor in the company's decision and said efforts were under way to find a way forward.

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