Committee publication · Correspondence · 15 April 2026 · HC 459
Correspondence from Ocean Winds regarding transmission charges impact on Scotland's offshore wind pipeline, dated 26 March 2026
Summary
Ocean Winds warns the Scottish Affairs Committee that current transmission charging arrangements (TNUoS) pose an immediate threat to Scotland's offshore wind pipeline, particularly ahead of the AR8 Contracts for Difference round. The company cites West of Orkney's public warning that transmission charges make projects uncompetitive, and independent analysis showing TNUoS charges in north Scotland forecast to more than double by 2029/30, potentially eroding £2.9bn in project value across existing generation assets.
Key findings
- West of Orkney offshore wind project has warned it will not proceed despite full consent due to 'unfair' transmission charges making it uncompetitive versus English projects
- TNUoS charges for north Scotland projects forecast to more than double from 2024 to 2029/30; typical 500MW farm facing charges quadrupling from £8m to £29m annually
- Scottish generation fleet faces approximately £2.9bn additional lifetime transmission costs versus earlier expectations, risking project viability and early closure of operational assets
- AR7 Contracts for Difference round saw minimal Scottish participation; AR8 bidding timeline risks forcing complex decisions before grid connection process provides clarity on firm capacity and delivery dates
- Ocean Winds' Caledonia Offshore Wind project could participate in AR8 if TNUoS reforms are delivered, but current arrangements threaten Scotland's offshore wind supply chain and workforce
Tone
CriticalTopics
Key actors
Ocean Winds, Patricia Ferguson MP, Scottish Affairs Committee, West of Orkney offshore wind project, Scottish Renewables, DESNZ (Department for Energy Security and Net Zero), Ofgem, Adam Morrison
Notable line
“March 2026 Transmission charges the single biggest threat to Scotland's offshore wind pipeline Dear Ms Ferguson …”
Key Quotes
“… the fully consented West of Orkney offshore wind project warned publicly that, despite significant sunk investment, it will not be built unless "unfair" transmission charges are overhauled”
“For a typical 500 MW offshore wind farm that reached investment decision in 2016, annual charges have nearly doubled from £8m to £14m and are projected to more than double again to £29m in 2029/30”
“Reforming these charges is no longer solely an economic priority, but also a matter of national security.”
“Without action in 2026, there is a real risk that Scotland's offshore wind pipeline stalls at precisely the moment it should be accelerating.”
Source · parliament.uk record ↗