Renewable Energy The Renewables Obligation (Scotland) Order 2011 Consultation on Review of ROC Bands October 2011

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Section 1 - Banding Review Proposals

In brief:

  • Scottish Ministers intend - subject to some exceptions outlined in the following sections of this consultation - to introduce the same changes as rest of the UK.
  • However, grateful for and happy to consider views (accompanied by evidence) supporting any argument for Scotland to take a different approach.

1.1 Scotland is a renewables rich country, with enormous potential to generate power from technologies such as onshore and offshore wind, hydro, wave and tidal power. Our draft Electricity Generation Policy Statement, which is currently being updated to reflect the Scottish Government's 100% renewable electricity target, gives a clear view on the need for rapid expansion of renewable electricity across Scotland, as well as the underlying requirement for new efficient thermal capacity as part of a low carbon generation portfolio.

1.2 The Renewables Obligation (Scotland) legislation, the ROS, has played an essential role in delivering new renewables capacity and investment across the country since its introduction in April 2002. Renewable electricity generation, as a proportion of gross electricity consumption in Scotland, has grown from 12.3% in 2002 to 27.4% in 2009. This places the Scottish Government well on course to meet its interim target of 31% by 2011, and provides a platform to move towards the 100% target by 2020.

1.3 Banding, the principle which allows different numbers of Renewables Obligation Certificates (or ROCs) to be awarded to different renewable technologies depending on the costs of producing and transmitting power from those sources, as well as other important factors, was introduced to the Renewables Obligations across the UK in April 2009. This followed moves by the Scottish Government in 2007 to introduce higher levels of support for wave and tidal generation in Scottish waters.

1.4 The ROS Order 2009 provides that, in common with the other UK Obligations, the bands may be reviewed by Ministers at regular intervals, commencing in October 2010; the review of bands and the proposals for change which are the subject of this consultation are the product of this "scheduled" review. The intention in consulting on these changes now, leading to their being confirmed by the beginning of 2012, is to provide developers and investors with as much notice as possible prior to the new bands taking effect from April 2013.

1.5 Work on the necessary studies of renewable energy technology costs and modelling of the proposed amendments to existing bands has been led by the UK Department of Energy and Climate Change ( DECC), with input from both the Scottish Government and the Department of Trade and Investment in Northern Ireland ( DETINI). The study of UK market costs of renewable electricity generation and deployment potential, carried out by Arup and Ernst & Young and which spearheaded this review, was published in June 2010 [4]. A more detailed explanation of the methodology followed, plus the subsequent modelling of different deployment scenarios and their impacts by Poyry, is contained in DECC's consultation document [5].

1.6 Based on that work, we are consulting on the proposal that the following banding levels to be introduced to the ROS with effect from April 1 2013.

Renewable electricity technologiesCurrent support, ROCs/ MWh [6]Proposed ROC support/ MWh [7]Change
Advanced gasification22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Call for evidence
Changes proposed to the definition of this band, plus merger with advanced pyrolysis.
Advanced pyrolysis22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Call for evidence
Changes proposed to the definition of this band, plus merger with advanced gasification.
Anaerobic digestion22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Biomass conversionNo current band, but eligible to claim 1.5 ROCs under current banding arrangements.1Proposal for a new band.
Co-firing of biomass0.50.5Changes proposed to add fossil derived bioliquids.
Co-firing of biomass (enhanced)No current band but eligible to claim 0.5 ROCs under current banding arrangements1Proposal for a new band.
Co-firing of biomass with CHP11Changes proposed to add fossil derived bioliquids, to exclude advanced co-firing and to close this band to new accreditations from
1 April 2015.
Co-firing of energy crops11Changes proposed to the definition of energy crops, and to exclude advanced co-firing.
Co-firing of energy crops with CHP1.51.5Changes proposed to the definition of energy crops, to exclude advanced co-firing and to close this band to new accreditations from
1 April 2015.
Dedicated biomass1.51.5 until 31 March 2016; 1.4 from 1 April 2016Scottish Govt seeking views on possibility of capacity threshold for eligibility.
Dedicated energy crops22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Changes proposed to the definition of energy crops, and to exclude biomass conversion.
Dedicated biomass with CHP22 in 2013/14 and
2014/15
Scottish Govt seeking views on possibility of capacity threshold for eligibility. Proposal to close this band to new accreditations from
1 April 2015.
Dedicated energy crops with CHP22 in 2013/14 and
2014/15
Changes proposed to the definition of energy crops, to exclude biomass conversion and to close this band to new accreditations from 1 April 2015.
Energy from waste with CHP10.5
Geothermal22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Geopressure11
Hydro-electric10.5
Landfill gas0.250
Microgeneration22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Onshore wind10.9
Offshore wind22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Sewage gas0.50.5
Solar photovoltaic22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Standard gasification10.5 Call for evidenceProposed change to definition and merger with standard pyrolysis.
Standard pyrolysis10.5 Call for evidenceProposed change to definition and merger with standard gasification.
Tidal impoundment - tidal barrage (<1 GW)22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Tidal impoundment - tidal lagoon (<1 GW)22 in 2013/14 and
2014/15; 1.9 in
2015/16 and
1.8 in 2016/17
Tidal stream35We are seeking views on the introduction of a project cap to accompany this higher band.
Wave55As above.

1.7 The Scottish Government understands the importance to the vast majority of stakeholders of a common approach across the UK to the setting of support levels, as well as to the eligibility for that support. This is why, based on the work that has been carried out and referred to above, we intend to make an almost identical set of changes to the bands which apply in Scotland under the ROS.

1.8 However, there are some exceptions which we intend to apply to our support in Scotland. These are based on the need for the ROS to reflect wider strategic priorities and Scottish Government policies, included amongst which is our higher renewable electricity target. The following sections look at these areas and exceptions in more detail, and seek views on the proposals and approach that the Scottish Government is minded to adopt with respect to marine renewables, and to the availability of support for both dedicated biomass generation and for stations which co-fire using biomass.

1.9 However, we also want to hear views from those, if any, who believe that there is a particular reason, supported by evidence, as to why the banding levels and changes as set out in the table above should not be applied in Scotland, and a different approach justified here. Specifically, we intend to consider very carefully the projected effects of a proposed change in any band (as set out above) on the development of installed renewable capacity across Scotland. We have to be sure that we are striking the right balance between minimising costs to consumers on the one hand, and making progress towards a low carbon economy, securing economic benefits from technology development, and Scotland's ambitious renewable targets on the other.

1.10 This should include proposals for any new bands. For instance, we are aware that some developers have raised the issue of a separate and higher band to help attract and secure investment in experimental offshore wind turbine technologies and installations, and have held some initial discussions to consider this possibility. While it would certainly be possible to define and to introduce such a band in a way that controlled and limited the availability and the extra costs to consumers, we would want to be sure that any such costs were fully justified in terms of the future deployment in and benefits to Scotland.

1.11 We would be interested in hearing from any stakeholders who have a view on this proposition, and in considering evidence relevant to the argument for or against any such additional support.