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.

It will also demand onshore power stations pay for grid connections and carbon capture facilities.

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.

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.

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.

The bulk of the proceeds from all seabed developments go directly to Chancellor Alistair Darling.

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.

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.”

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.

The Nationalist’s Energy spokesman Mike Weir MP condemned the move.

He said: “Offshore windfarms will bring yet another Scottish cash bonanza for the London Treasury.

“First it was North Sea oil, now the Treasury is going to pocket another windfall from Scotland’s offshore renewable energy industry.

“Scotland must not miss out again on our offshore entitlement.”

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.

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.

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.

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.

The net income from the Crown Estate – £147.7m in 2001/01 – is paid into the Exchequer and made part of the Consolidated Fund.

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.

“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.

“All profit goes to public spending for the benefit of everyone.”

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.

“We are investing around £20m in Scottish renewables.”

By Vic Rodrick

Daily Express

30 March 2008