Applications under the Electricity Act 1989: fees charged

Assessment of costs

To inform our review of fee levels, we have undertaken a staged assessment of our current costs.

We began by undertaking a cost of time analysis, by identifying each stage in our process, the time associated with each task and the staff level at which each task is undertaken. Time recording was undertaken across the full range of application types for which fees are charged, looking at applications for different technologies and of different levels of complexity to develop an understanding of typical or average costs to the Energy Consents Unit and Marine Scotland Licensing Operations Team of each stage in our process.

We have critically evaluated where our processes could be made more efficient and could meet the changing priorities due to the diversification of the marine sector. We have already sought to remove duplication from our processes; to ensure that tasks are being undertaken at the appropriate experience/ cost level; and have focussed our resource on those areas which add greatest value to the process and to outcomes.

We have identified further improvements that we would like to deliver. In particular, we would like to respond to demands to more proactively project manage application processes to deliver greater certainty around determination timescales. We intend to continue to support discussion with a range of consultees at pre-application stage to streamline the application process, and to avoid instances where additional information has to be sought from applicants. We intend to continue to proactively engage with communities, interested parties and stakeholders potentially impacted by proposed developments, to increase their confidence in our application processes. We have given in depth consideration and successfully piloted measures to deliver these aims, and have assessed the resource requirement for supporting these services for all applications going forward.

We have considered the wider impact of the introduction of the Electricity Works (Environmental Impact Assessment) (Scotland) Regulations 2017. In introducing these regulations, Ministers sought to minimise any additional regulatory burden and ensure protection of the environment, and there will be some additional process and resource requirements for Scottish Ministers in discharging their regulatory responsibilities.

We have given consideration to alternative models, including charging hourly rates to provide an accurate and application specific cost recovery model. However, we prefer to maintain a fixed fee to avoid uncertainty to applicants and the potential for increasing administrative costs which would be passed on to applicants. We have also given consideration to alternative thresholds for application costs, such as the total area included within red line boundary. However, it is our view that generation capacity or length of line provide a fairer indication of complexity and cost of processing applications for energy infrastructure. We propose to continue to set fee levels by reference to the consented capacity of generating stations or length of overhead lines.

Having developed a detailed understanding of costs that we would seek to recover through our fees, we have balanced the desire for cost recovery against impacts on industry. We are sensitive to market pressures which currently affect developers in energy industries. We have considered the extent to which Scottish Ministers can continue to bear the shortfall in costs experienced to date, having regard to the standard approach to setting charges for public services as set out in the Scottish Public Finance Manual which is full cost recovery. We have undertaken a comparative assessment of our fees against other consenting authorities and jurisdictions to arrive at proposed fee increases which we consider to be reasonable in the context of current market conditions.

The assessment of application costs is not an exact science, but we have given careful consideration to the fee levels proposed in the consultation paper. On balance, we consider that the proposed fee increases are necessary and proportionate. We would welcome your feedback.