Chancellor’s £40million energy raid
WESTMINSTER will plunder nearly £40million a year in “windfall” profits from Scotland’s renewable energy industry.
In a move similar to the one which saw billions of revenue from Scottish oil fields diverted to London, the Crown Estate will levy a “stealth tax” for every megawatt generated offshore.[>
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It will also demand onshore power stations pay for grid connections and carbon capture facilities.[>
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And the Estate will charge green energy firms rent for wind and wave turbine sites and for the subsea cables needed to export electricity to England and other countries.[>
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The revelations sparked claims Scotland was heading for a repeat of the North Sea “robbery” which saw billions in revenues from Scottish oil and gas diverted to Westminster.[>
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The Crown Estate owns the foreshore and seabed around the UK to a distance of 12 nautical miles. It also has further rights out to the extent of Britain’s continental shelf, at 200 miles.[>
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The bulk of the proceeds from all seabed developments go directly to Chancellor Alistair Darling. [>
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Output from offshore renewables around Scotland is forecast to top 10,000 megawatts by the year 2020, putting the Crown Estates share of revenue at around £37.7m a year from electricity generation before Revenue and Customs tax operators’ profits.[>
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The bombshell revelation comes just days after First Minister Alex Salmond formally opened the UK’s biggest wood-fired power station - called Steven’s Croft – in Lockerbie and hailed it as a “green energy milestone.”[>
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Dr Gordon Edge, the Director of Economics & Markets for the British Wind Energy Association, said offshore leases included a clause which required the developers to pay a royalty fee on each MWh produced in addition to the ongoing charges for site rentals and connections to the grid. [>
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The Nationalist’s Energy spokesman Mike Weir MP condemned the move.[>
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He said: “Offshore windfarms will bring yet another Scottish cash bonanza for the London Treasury.[>
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“First it was North Sea oil, now the Treasury is going to pocket another windfall from Scotland’s offshore renewable energy industry.[>
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“Scotland must not miss out again on our offshore entitlement.”[>
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The focus for wind projects so far in Scotland has been on onshore and offshore-island based wind, with one offshore project beyond the territorial limit in the Moray Firth. [>
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The previous Executive approved a £200m wind farm project at Robin Rigg, a sandbank in the Solway Firth midway between the Galloway and Cumbrian coasts. [>
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But in November last year the Government set a new target of generating 50 per cent of Scotland’s electricity from renewables by 2020, with an interim target of 31 per cent by 2011. [>
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The Crown Estate has also proposed a £4.8bn high-capacity offshore electricity line to run down the east coast from Shetland to Norfolk then coming onshore to continue to London, charging a rent per mile of cable and fees for connections to power stations like Torness in East Lothian. [>
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The net income from the Crown Estate – £147.7m in 2001/01 – is paid into the Exchequer and made part of the Consolidated Fund.[>
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A spokesperson for the Crown Estate failed to answer questions about the anticipated income from offshore developments, but said: “Just as landowners charge rent to onshore green energy developers, offshore wind developers pay the Crown Estate for the placement of turbines on the seabed.[>
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“The charge is typically around one per cent of the value of electricity generated and applies only to commercial projects, not just research and development. [>
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“All profit goes to public spending for the benefit of everyone.”[>
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The spokesman added: “The Crown Estate is supporting the renewables industry in various ways through the EMEC testing centre in Orkney, research into the viability of an east coast sub-sea cable and through the Pentland Firth Tidal Energy Project.[>
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“We are investing around £20m in Scottish renewables.”[>
