Press notice: 13/022
A scheme supporting consumers in the North of Scotland exposed to the highest electricity distribution costs in Great Britain is likely to be retained, under plans set out by Edward Davey in a call for comments published today.
The scheme - called the Hydro Benefit Replacement Scheme - saves a total of £50 million on energy bills across the North of Scotland.
Around a third of this amount contributes to an average bill saving of £31 a year to 690,000 domestic consumers in the north of Scotland, with the rest giving bill savings to the 70,000 non-domestic consumers. It is paid for by all domestic and non-domestic consumers across Great Britain, and costs the average household less than £1 a year.
UK Energy and Climate Change Secretary Edward Davey said:
“This scheme is another example of how Scotland currently benefits from being part of the United Kingdom, providing an annual saving of £31 to 690,000 domestic consumers in the north of Scotland.
“With the size of the Great Britain consumer base we are able to spread the cost of protecting consumers in the North of Scotland.
“I believe wholeheartedly that Scotland is stronger as part of the UK, and that the UK is stronger with Scotland in it.”
UK Energy Minister John Hayes added:
“This scheme cushions consumers in the North of Scotland from the high costs of distributing electricity over a sparsely populated area. It shows that as one nation with a shared energy market, the British are stronger together.
“We are proposing to retain this scheme so that consumers in the North of Scotland will continue to receive this discount.”
The Government also plans to retain a second scheme - the Common Tariff Obligation. This scheme prohibits suppliers from charging comparable consumers different prices on the basis of their location in the North of Scotland, and has been in place since 1990.
This announcement comes as Edward Davey begins a visit to Aberdeen. He will call on Talisman Energy and visit ROVOP, who provide underwater vehicles in both the oil and gas and offshore renewable sector. While in the city he will meet with European Commissioner Gunther Oettinger, and at a separate event he will meet with Aberdeen City Council to discuss their long-standing engagement on energy efficiency.
In the evening, the Secretary of State will attend an event hosted by Oil & Gas UK and Scottish Renewables to discuss interaction between both sectors and how they can best share good practice. Energy Minister John Hayes will also visit Aberdeen on Monday 4 March.
Notes for editors:
The Government’s call for comments on the Hydro Benefits Replacement Scheme and Common Tariff Obligation.
There is a legal requirement for Government to review the Hydro Benefit Replacement Scheme every three years. There is a Ministerial commitment to review the Common Tariff Obligation at the same time. The previous year concluded that there was a continuing need for both schemes.
A map setting out which areas benefit from the scheme is available.
Edward Davey set out the case for a United Kingdom in a speech given on 11 December 2012.
For more information on the visits by Edward Davey and John Hayes, please call the DECC press office on 0300 068 5223.