First Minister Alex Salmond today held constructive discussions with Alastair Buchanan, Chief Executive of Ofgem, about its ongoing review of the electricity transmission charging regime, Project TransmiT.

Speaking after the meeting in London, the First Minister said: "I had a constructive meeting with Alastair Buchanan and other senior Ofgem executives this morning. Our long-standing objective has been to secure fundamental change to the transmission charging regime, to end the discrimination against Scottish generation and to deliver the low carbon objectives of both the Scottish and UK Governments.

"We are looking to establish a position of fairness for electricity generators in Scotland. That's been a long-standing campaign of the Scottish Government and we are hoping that they will make real progress over the summer.


"Alastair Buchanan also reaffirmed to me that Ofgem was ready to write the cheque for Scotland's £200 million that is lying in their bank account and is needed now for investment in renewables projects in Scotland, as was always intended.

"Of course, that requires the agreement of the Treasury that this money will not then been offset from the Departmental Expenditure Limits. That was something I discussed with the Chancellor of the Exchequer in my meeting at the Treasury yesterday."

The Scottish Government has made clear that Ofgem's review of transmission charging, Project Transmit, must result in fundamental change - an end to the current strong locational charge which effectively penalises renewable generators, who do not have the option of choosing where to site their projects.

The Scottish Government and generators in Scotland have made clear that the current system is working against both Scottish and UK Governments' low carbon objectives.

As a result of the strong locational pricing element in the charging methodology, applied by Ofgem, generators in the North of Scotland have the highest charges in the UK (£20.17 per Kilowatt Hour in the North of Scotland, compared to a subsidy of £5.87 per Kilowatt Hour in Cornwall).

Scotland has some of the best renewable energy resources in Europe, yet the locational charging approach to electricity generators results in Scotland facing the highest charges in the UK.

(GK)