The government has agreed to examine transmission costs

DTI minister Malcolm Wicks announced the review on a visit to a wind farm in Dumfries and Galloway.

The move would mean limiting National Grid charges for transmission from Shetland, Orkney and the Western Isles.

It follows opposition concern that the charges could hamper more remote renewable projects.

Mr Wicks said: "Limiting the charges paid to the National Grid by renewables generators on the Scottish Islands is vital if their vast potential is to be realized.

It is crucial that local people with an interest in the renewables sector make their views known Alistair Carmichael Orkney and Shetland Liberal MP

"Given the right incentives, the islands could contribute more than a percentage point towards our 10% target, that's enough to power three quarters of a million households, more than Edinburgh, Glasgow and Aberdeen combined."

The consultation will close on 19 October and the government hopes an agreed new charging regime can come into force in April 2006.

Orkney and Shetland Liberal Democrat MP Alistair Carmichael said: "It is crucial that local people with an interest in the renewables sector make their views known.

"Ministers must be left in no doubt that we in the Northern Isles recognise the important part that our communities can play in generating sustainable sources of energy.

Energy needs

"However, we also realise that this will only be possible if we are given a fair crack of the whip."

The Scottish National Party welcomed the move but expressed concern that the consultation focused on the islands.

Environment spokesman Richard Lochhead said: "The SNP was the only party to raise this as an issue and I am pleased to see that a consultation has been launched.

"However, the outcome of this consultation must be a level playing field for Scottish renewables, otherwise the sector will be crippled."