SSEN Transmission is calling for views on the current Transmission Network Use of System (TNUoS) charging regime, which it has described as “unfair and volatile”.
It has released new analysis on this that shows how renewable generators located in Scotland pay “significantly” higher costs to connect their electricity to the grid than those in other parts of Great Britain (GB).
It gave the example of the Beinneun wind farm in Scotland, which pays £5.54/MWh compared to an equivalent wind farm - Pen y Cymoedd - in Wales, which will get paid £2.80 per unit.
SSEN said that the TNUoS costs are in turn driving up the costs of renewable energy generated in the north of Scotland and can act as a barrier to renewable generation developments being built, SSEN warned. The impact of the charges on generators also has a knock-on effect on SSEN Transmission’s ability to efficiently plan and invest in the transmission network.
This is a result of the relatively high cost of TNUoS charges, the year-on-year volatility of tariffs and the difficulties in being able to accurately forecast charges even a year ahead, with these factors initially being brought to SSEN’s attention from generators in the north of Scotland before it undertook its own analysis.
The transmission operator said its analysis shows that all generators regardless of technology or location experience significant year-on-year volatility.
When it comes to the predictability of the charges, SSEN used National Grid ESO’s five year ahead view of the TNUoS tariffs to assess the predictability of the 2021/22 wider TNUoS charge for nine representative generators. Overall, its analysis shows “material differences” between the forecast charges, with this variability experienced by all generators, regardless of technology or location.
TNUoS charges are compulsory for users of the GB transmission system, with generators charged based on their declared capacity, known as Transmission Entry Capacity.
Each generator has a bespoke TNUoS tariff, with these varying by location and changing over time to reflect the changing overall use of the transmission network. The rationale behind this, as set out in the Connect and Use of System Code, is that charges should reflect the impact that users of the transmission system at different locations would have on the Transmission Owner’s costs if they were to increase or decrease their use of the systems.
Aileen Macleod, SSEN Transmission’s director of business planning and commercial, said that with the UK and Scottish governments putting "ambitious policies" in place, the TNUoS charging regime is "a blocker" that raises "serious questions about whether it is still fit for purpose".
"We are publishing our analysis to widen the discussion about transmission charging and seek views on potential solutions. Our findings suggest there is a clear case for reform, and we want to hear what others think too.”
The full analysis can be found here.