Select Committee on Environmental Audit Appendices to the Minutes of Evidence


Letter to the Clerk of the Committee from Peter Roper, Director of Regulation, Scottish and Southern Energy plc

  Thank you for your letter of 3 December giving Scottish and Southern Energy the opportunity to make a submission to the new Environmental Audit Committee in respect of its work on renewable energy.


  Scottish and Southern Energy (SSE) is the largest renewable generator in the UK and currently produces over 40 per cent of the renewable output in this country. On 8 November 2001, it announced plans to invest £450 million over the next 10 years in renewable generation. This includes a programme to refurbish its hydro power stations and a programme to develop new renewable generation, including wind and, possibly, new hydro assets.

  As part of the latter programme, SSE announced on 7 December proposals for a £60 million, 100 megawatt windfarm in South Ayrshire. At the same time, the Minister for Energy has unveiled plans for the creation of Europe's largest windfarm on the Isle of Lewis and the Scottish Executive published a study by consultants Garrad Hassan which suggested that Scotland has a potential renewable energy resource in excess of 60 gigawatts (the total installed UK generation capacity is around 80 gigawatts).

  All of this is in direct response to the substance of government policy, which is to encourage investment in renewable generation, but it raises very important practical issues.


  Given its potential, it is likely that most wind energy will be developed in Scotland. Much of this will be in areas remote from the centres of demand—which means that there will be increased reliance on transmission. SSE's transmission network in the north of Scotland has been developed to serve a rural area of low demand. There are, therefore, practical limits on how much electricity can be exported from such remote areas to the rest of Scotland and onwards to England and Wales.

  In its Memorandum to the Environmental Audit Committee in January 2001, SSE commented that one corollary of the upsurge in renewable generation in Scotland will be an increase in the number of UK renewable generators seeking connection to SSE's electricity network in the north of Scotland. This is likely to require large amounts of capital investment locally to upgrade the network to accommodate them. It is critical that the cost of this investment is not borne by the relatively few customers in the north of Scotland area.

  In addition to resolving regional constraints and providing stronger connection in remote areas, the UK's transmission systems will need to be capable of much greater north-south flows within the next few years to allow Scotland's substantial renewable resources to be exploited in full. Again there are issues about "who pays" and how this extra capability is delivered in a timely fashion.


  Moreover, it is not practicable to meet Scottish (or UK) customers' demand from a combination of inflexible nuclear generation and intermittently available wind generation. Indeed, if transmission constraints persist, the increasing concentration of subsidised renewables generation in Scotland could undermine the economics of existing Scottish fossil fuel generation, which is amongst the most efficient and environmentally-benign in the UK. For example, the repowering of Peterhead Power Station was completed in 2000, with the result that the thermal efficiency of the plant increased from 35 per cent to 57 per cent. This reduced the station's fuel intake by 20 per cent and the drop in emissions is the equivalent of removing 400,000 cars from Britain's roads.

  Therefore, not only do various grid security and capacity issues arise in areas with a prevalence of intermittent renewable generation, it will need to be economic to retain local existing fossil fuel generation to satisfy demand and provide system stability, particularly when sources such as wind power are not generating.


  In summary, SSE strongly supports the Government's incentivisation of renewable generation. It does, inevitably, raise some practical issues about the future operation, capability and cost of electricity generation and transmission in Scotland and the UK more generally. Only if these are solved, the UK will be able to benefit fully from the fact it has Europe's best renewable energy resources.

  We would be pleased to provide any further information on request.

January 2002

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