United Kingdom

United Kingdom

Action pledge on final sums liabilities

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A key bone of contention among UK wind developers -- particularly offshore -- is being looked at by government and energy market regulator Ofgem, says energy minister Malcolm Wicks. Final Sums Liabilities (FSL) are the upfront cash guarantees that wind project developers are obliged to pay to power system operator National Grid for any new investment in the electricity network needed to connect a wind farm. The sums involved can be large and must be paid at a time when the developer is not even certain the project will go ahead. They are intended to cover the costs National Grid incurs when preparing to connect a new generator. "I want to assure you that it is recognised that the existing system does not easily facilitate project development; the issue is being considered alongside Ofgem's current transmission price control review process," Wicks told delegates at last month's offshore wind conference in London organised by the British Wind Energy Association. Meantime, while a solution is sought, the Department of Trade and Industry and Ofgem are to engage with National Grid to ensure that the current arrangements do not unnecessarily delay connection of viable renewable energy projects, he added. Nonetheless, Wicks defended the principle behind FSL. "The government cannot and should not provide that security." Final sums liabilities have increased due to the huge demand for transmission access by some 16 GW of renewable generation in Great Britain, he said. "I know it is no comfort to you but the problem is one of success for the industry bringing forward so many projects."

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