He’s been at it again.
Love him or loathe him, when it comes to energising the energy markets, Scotland’s First Minister, Alex Salmond, knows the right buttons to press.
In his opening address at Aberdeen’s All Energy, he was quick to make a show of supporting the sector and of opening his wallet.
Announcing an £18 million marine energy fund to develop wave and tidal power and the first funding award from the £70 million National Renewable Infrastructure Fund (NRIF) – to transform a Scottish dock into a key manufacturing hub – he struck that now familiar balance between magician and politician.
However, once the conference clamour has faded, let’s just hope he’s got a few more tricks up his sleeve. Particularly when it comes to grid connectivity and transmission.
To be clear, grid connectivity is already an area of the market with which many are familiar, Salmond included.
Indeed, it was only earlier this month that the very same man was standing in front of an expectant Norwegian audience, touting the benefits of NorthConnect – a planned venture between British and Scandinavian electricity grids – that is, according to sources, expected to be operational before 2020.
However, it’s not NorthConnect that’s currently causing the bother. Moreover, it’s a domestic dispute that’s much closer to home. And while it’s currently focused on remote Scottish islands, it’s an issue that exemplifies a wider European challenge.
In short, it’s an issue of clarity of transmission charges and its associated cost.
Currently energy regulator Ofgem is in the process of setting the rate National Grid can charge customers, with a new transmission price control expected to provide a more predictable and transparent cost framework in the future.
As a result, developers have been accused of dragging their heels when it comes to hooking up projects to the grid – an issue that the National Grid describes as, “…one of timing and one of regulatory underpinning.”
Whatever the case, it’s got the makings of a headache for all concerned. And it exemplifies the growing challenge of pushing energy efficiently around the system.
The inescapable fact remains that with many western economies making the switch from a fossil fuel focus towards low carbon economies, the traditional radial grid infrastructure no longer works.
Governmental electricity market reform certainly helps with the transition but it should serve as a catalyst for change, not a solution in itself.
Waving a magic wand might seem like a tempting option for politicians, policy makers and project developers alike. However, they’ll need to conjure up more than sharp talk, if we’re to keep the lights on.
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