Tag Archives: UK Government

UK government to cut electricity bills for consumers in the north of Scotland

Households in the northern parts of Scotland could soon save money on their electricity bills thanks to UK government plans to more fairly distribute the costs for providing electricity to the Shetland Islands.

The isolated nature of Shetland’s electricity system means it costs £18 million more a year to keep its 23,000 residents’ homes and businesses powered, than it does to provide power on the mainland. The cost is currently picked up by consumers in the north of Scotland through their electricity bills.

These costs are expected to rise to £27 million from next year in order to deliver a necessary upgrade to Shetland’s power supply. The UK government is concerned about the burden this would place on consumers in the north of Scotland.

It has today (11 July 2019) published a consultation announcing plans to spread the costs of powering Shetland across Great Britain from April 2020, meaning consumers across the northern part of Scotland – from Thurso to Aberdeen – would save around £17 a year on their electricity bills.

Minister of State for Energy and Clean Growth, Chris Skidmore, said:

The UK government is committed to ensuring everyone across the country, including in the remotest parts of northern Scotland, has access to a reliable energy supply at a fair price. We’ve already shown this through our price cap – intervening in the market to protect loyal consumers in all parts of the union from being overcharged.

Consumers in the north of Scotland should not have to fund the costs of maintaining Shetland’s energy security alone. The ability to share costs more widely is one of the benefits of being part of the United Kingdom and these plans will mean consumers in the north of Scotland will soon receive a welcome saving on their bills.

Shetland is different to other Scottish islands as it’s the only part of Britain’s licensed distribution network that is isolated. It’s unable to benefit from the economies of scale enjoyed by other islands, which are part of the integrated network, which is why costs have always been higher.

Scotland Secretary David Mundell said:

I warmly welcome the UK government’s plan to cut the electricity costs of consumers in the north of Scotland. Spreading the costs across the whole of Great Britain reflects the unique circumstances in Shetland and northern Scotland. ‎The UK government is determined to deliver for all of Scotland’s communities.

The UK government’s Hydro Benefit Replacement Scheme already provides an annual cross-subsidy of £61 million to protect electricity consumers in the north of Scotland from the high costs of electricity distribution in the region. It is funded by charges on electricity suppliers across Great Britain.

The scheme will be used to deliver the new funding arrangement for Shetland’s electricity, meaning that the total assistance provided through to the north of Scotland consumers will be almost £90 million a year.

Energy Systems Of The Future – Local Communities To Benefit Sooner

Just under £10 million Industrial Strategy Challenge Fund investment will support even more people to get value from smart local energy systems.

A new research consortium and funding for business-led innovation projects will speed up the uptake of smart energy systems by local communities to start benefiting from cleaner, cheaper and more consumer-friendly energy.

Funding is by UK Research and Innovation through the Industrial Strategy Challenge Fund for clean energy – a £102.5 million investment in UK industry and research to develop systems that support the global move to renewables.

Rolled out by 2020s

Twelve projects from all across the UK will share £1.5 million to design ground-breaking, local, smart energy systems that are ready for roll out in the 2020s.

They will quickly bring forward energy systems with improved efficiency and productivity, at lower costs, in order to reduce energy bills for consumers and create better user experiences.

Ultimately this should help improve air quality in line with the government’s fifth carbon budget, at the same time as building the UK’s energy supply chain, creating high value jobs and export opportunities.

Projects include:

  • creating an energy marketplace and local trading platform between the predominantly commercial premises in London South Bank and Waterloo, using IoT sensors, predictive algorithms and storage systems
  • maximising existing and planned renewable generation assets in Bridgend, including solar farms and a nearby energy park, to develop a local electricity flexibility market, an electric vehicle charging network and improved service offerings for transport and heat
  • making use of an established energy innovation district group and new digital technologies, such as sensing and control devices, data analytics and artificial intelligence, the Cheshire Energy Hub will better manage energy use by industrial users, decarbonise and lower costs

Developing novel research concepts

To bring forward novel research in local energy systems and accelerate uptake, value and impact, £8 million will go to setting up EnergyREV, an energy revolution research consortium.

The consortium will be led by the University of Strathclyde and include 29 investigators across 22 universities, working to ensure that UK academic expertise delivers impact and a competitive advantage.

It will work closely with the Energy Systems Catapult to provide analysis, evaluation and assessment of the projects funded under the prospering from the energy revolution challenge.

Additionally, EnergyREV will deliver its own strategic research projects that address some of the industrial challenges in developing local, investable, consumer-centred energy approaches.

Improving uptake, value and impact

Professor Stephen McArthur, Deputy Associate Principal for Research, Knowledge Exchange and Innovation, at the University of Strathclyde said:

EnergyREV is excited about its role in supporting innovation in the prospering from the energy revolution programme.

The world-class knowledge, research teams and interdisciplinary expertise available through our university partnership will improve the uptake, value and impact of smart local energy systems.

We are focused on using our novel research to accelerate and help deliver the Industrial Strategy goals and enhance UK competitiveness.

Rob Saunders, Deputy Challenge Director, Prospering from the Energy Revolution, UK Research and Innovation said:

This is an exciting time for energy innovations.

We all rely on energy and we all need it to be cleaner and more cheaper, both as consumers and as a nation. New technologies point towards a new energy future, one of lower carbon and more efficient energy supply, distribution and storage, giving consumers more control.

This energy revolution – a crucial part of the Industrial Strategy – has the potential to unlock investment and create high-quality jobs and grow companies capable of exporting.