Ofgem Study Reveals Hidden Nuclear and Gas Subsidies

By virtue of location - often as close to the centres of population as possible, and primarily in the South - Nuclear and Gas-fired electricity production is being subsidised to the detriment of renewable energy.

This is the conclusion of the Ofgem 'Power TransmiT' review.

In simple terms, there is a sliding scale of charges for feeding power into the national grid. It varies from £24 per kilowatt in the north of Scotland, through to a direct subsidy of £5 per kilowatt paid to electricity generators in the south of England.

Were this to be equalised throughout the whole of the UK to support renewable energy, then there would be an equal charge of £5 per kilowat irrespective of location.

The review goes on to say that the current regime provides an incentive for nuclear investment to the tune of £13.2bn and 6.4bn to gas plants. Under equalisation plans, the incentive for nuclear would disappear, and the gas incentive would be geographically redistributed.

Billions of pounds would be redistributed in favour of renewable energy schemes. In addition to benefitting wind farms, there is also the potential for unlocking much needed investment in tidal and wave projects; although this is limited by the fact that the current proposals do not extend to the Scottish islands, where "crippling fees" to access the grid are holding back investment.

The full report can be read at: http://www.bbc.co.uk/news/uk-scotland-scotland-business-15711200