A delayed but welcome development

When it comes to the fight against climate change, the development of new technologies for generating the electricity we rely upon is essential. That is why I was delighted to hear recently that Peterhead power station is set to develop a demonstration Carbon Capture and Storage project which will take carbon dioxide emissions generated by the station and store them instead of releasing them into the atmosphere.

This is not the first time that such a development has been proposed for Peterhead. A previous project had to be abandoned in 2007 as a result of the previous UK Government’s refusal to provide financial support or certainty over the policy framework surrounding the technology. This was a massive opportunity to pioneer the technology in Banff & Buchan and to export the expertise that would be built up in developing it to other projects around the world. Yet thanks to incompetence in Westminster, it was an opportunity that seemed lost.

Second chances to lead the world in a particular field do not come along often, particularly during such difficult economic times, which is what makes the announcement by Scottish and Southern Energy particularly welcome. Three years of development at Peterhead may have been needlessly lost and projects in other locations around the world may have stolen a march as a result, but developing this technology still has the potential to provide an important economic and environmental boost to the area. Westminster must not let down Banff & Buchan with their lack of support again.

Of course in this area, the track record of successive UK Governments has been less than stellar. UK policy on transmission charges for electricity generators remains massively discriminatory and penalises suppliers in Scotland. Indeed, Peterhead power station was forced to announce a few months ago that it had no choice but to consider closing unit two of the power station as a result of transmission charges. A system which sees Peterhead forced to pay £29 million a year to sell its energy while an identical power station in the south east of England would receive a £3 million subsidy is manifestly unfair.

Yet while this is clearly a serious problem for existing energy providers, it is the potential it has to hold back the development of Scotland’s renewables industry that should be making alarm bells ring.

Scotland’s renewable potential, particularly offshore through wave, tidal and wind power, is staggering and can create an economic boom to rival the impact of North Sea oil. However, that industry will not simply fall into our hands, it needs to be nurtured and grown through these critical early days. By its very nature, the renewables industry tends to be located in more remote locations and is therefore on the receiving end of the current transmission charge policy.

It is a situation which is untenable and which people across Scotland must continue to push for change in. If the UK Government is serious about reaching its climate change targets then it cannot continue to operate a transmission charging regime that penalises renewable energy developments. There are clear economic and environmental imperatives that transmission charge policy should recognise and reflect.

Scotland, and places like Banff & Buchan in particular, is losing out as a result of UK Government policy and unnecessary obstacles are being put in the way of future economic developments. Putting in place a fairer system would be a real example of the new UK Governments self-proclaimed respect agenda towards Scotland and is something the Scottish Government will continue to press for.