The UK Government published a consultation on 11 July announcing plans to spread the costs of powering Shetland across Great Britain from April 2020.
The isolated nature of Shetland’s electricity system means it costs £18mn more a year to keep its 23,000 residents’ homes and businesses powered, than it does to provide power on the mainland. The cost is expected to rise to £27mn from 2020. Extra costs are passed onto electricity bills of consumers in the north of Scotland.
The consultation on the Hydro Benefit Replacement Scheme and Common Tariff Obligation, which is reviewed every three years, is part of the review process. The consultation could result in consumers in the northern part of Scotland save around £17 a year on their electricity bills.
Scotland Secretary David Mundell said: “The UK government’s Hydro Benefit Replacement Scheme already provides an annual cross-subsidy of £61mn to protect electricity consumers in the north of Scotland from the high costs of electricity distribution in the region. It is funded by charges on electricity suppliers across Great Britain.”
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