Renewable Energy: Changes to the Renewables Obligation (Scotland) Order 2010: Statutory Consultation

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Summary

1. The Renewables Obligation (Scotland), or ROS, came into force on 1 April 2002, and is the key means through which the Scottish Government is pursuing its renewable energy objectives. It operates by obliging electricity suppliers to ensure that a specified proportion of any electricity which they supply to customers in Scotland comes from eligible renewable resources. We have conducted a number of consultative reviews with stakeholders since this legislation was first introduced, examining the ways in which the ROS is structured and the effectiveness of its performance. In the main, these reviews have led to a series of relatively minor amendments to the ROS.

2. The ROS is mirrored by almost identical Obligations covering suppliers in England and Wales, and in Northern Ireland; between them, these Obligations act to create a UK market for renewable electricity and ROCs. The Scottish Government works closely with colleagues in the UK Department of Energy and Climate Change ( DECC) and with the Department of Enterprise, Trade and Investment in Northern Ireland ( DETINI) on matters relating to the UK Obligations.

3. The Scottish Government's Renewables Action Plan, published in June 2009 and available here, sets out our commitment to achieving in Scotland the EU target that 20% of primary energy demand should be met from renewable sources by 2020. Realising this ambition will require renewable electricity to exceed 50% of demand in Scotland by 2020, as well as large increases in the renewable heat and transport sectors. Meanwhile, the adoption of the EU target by the UK as member state has implications for the Renewables Obligations across the UK, and for the size and structure of the obligation upon suppliers.

4. DECC recently published its consultation seeking views on a number of changes to the RO; that document is available here. It contains a number of proposals, including the phasing of support for offshore wind projects, transitional arrangements for projects moving from the Feed-in Tariff ( FIT) mechanism to the RO, transition between the RO and the proposed Renewable Heat Incentive ( RHI), and other issues. These are included within this document.

5. The Scottish Government understands and shares the common view regarding the importance of consistency between and across the UKROs. We wish as always to retain that consistency as far as possible. This means that we propose on this occasion, subject to the outcome of this consultation, to implement the same changes to the ROS. Of course, we recognise that stakeholders may take the view that these issues raise particular questions as regards Scotland - we would welcome feedback on where that is thought to be the case.

6. In addition to these, however, we are proposing to make a small but important change to the coverage of our enhanced bands for wave and tidal power, while leaving the levels at which those bands are set unchanged for the time being. We are also inviting views on the continuation of our support for biomass generation, including the question of grandfathering, and the ways in which the Scottish Government may wish to tailor that support going forward.

Responding to this consultation paper

7. We are inviting written responses to this consultation paper by December 1 st, 2010. Please send your response with the completed Respondent Information Form (see "Handling your Response" below) to:

Neal D Rafferty

Renewable Energy Team
4th Floor
5 Atlantic Quay
150 Broomielaw
GLASGOW
G2 8LU


Telephone: 0300-244-1227
Email: Neal.Rafferty@scotland.gsi.gov.uk

8. We recognise that there may be considerable interest in these proposals, and a number of questions which recipients may wish to discuss with us directly. We wish to engage as fully and as openly as possible with all our stakeholders during this consultation period, and are happy to be approached directly at any time.

9. We would be grateful if you could indicate clearly in your response which questions or parts of the consultation paper you are responding to as this will aid our analysis of the responses received. This consultation, and all other Scottish Government consultation exercises, can be viewed online on the consultation web pages of the Scottish Government website at http://www.scotland.gov.uk/consultations.

10. The Scottish Government has an email alert system for consultations ( SEconsult: http://www.scotland.gov.uk/consultations/seconsult.aspx). This system allows stakeholder individuals and organisations to register and receive a weekly email containing details of all new consultations (including web links).

11. SEconsult complements, but in no way replaces SG distribution lists, and is designed to allow stakeholders to keep up to date with all SG consultation activity, and therefore be alerted at the earliest opportunity to those of most interest. We would encourage you to register.

Handling your response

12. We need to know how you wish your response to be handled and, in particular, whether you are happy for your response to be made public. Please complete and return the Respondent Information Form (which can be found at the end of this document) as this will ensure that we treat your response appropriately. If you ask for your response not to be published we will regard it as confidential, and we will treat it accordingly.

13. All respondents should be aware that the Scottish Government is subject to the provisions of the Freedom of Information (Scotland) Act 2002 and would therefore have to consider any request made to it under the Act for information relating to responses made to this consultation exercise.

Next steps in the process

14. Where respondents have given permission for their response to be made public and after we have checked that they contain no potentially defamatory material, responses will be made available to the public in the Scottish Government Library. You can make arrangements to view responses by contacting the SG Library on 0131 244 4552. Responses can be copied and sent to you, but a charge may be made for this service.

What happens next?

15. Following the closing date, all responses will be analysed and considered along with any other available evidence to help us reach a final position on the proposals identified within this paper. This will lead to the laying of an amended ROS before the Scottish Parliament early in 2011, with the intention that it come into force from 1 April 2011.

State Aid Position

16. In accordance with State aid rules, the current UK renewables obligation scheme was notified to the European Commission in July 2000 for its approval. A State Aid is defined under Article 87(1) of the EC Treaty as any public resource given selectively to an undertaking that could potentially affect competition and intra-community trade.

17. The Commission considered that the redistribution of buy-out funds to electricity suppliers, as under the Obligations at present, constituted State aid to electricity producers and potentially also to electricity suppliers. However, as the scheme met the criteria for green certificate schemes set out in the Commission's environmental guidelines, it was approved: United Kingdom Renewables Obligation and Capital Grants for Renewable Technologies - N504/2000. A number of amendments have since been made to the scheme, all of which have been notified to and approved by the Commission.

18. The proposals set out in this document, and which will apply here and elsewhere in the UK, will require the approval of the Commission.

Comments and complaints

19. If you have any comments about how this consultation exercise has been conducted, please direct them to us using the contact details at paragraph 7. Additional information about the Scottish Government's consultation process more generally can be found at the end of this document.