Consultation on Renewables Obligation (Scotland) Order 2008 - Summary Report
Background
1. The Scottish Government published its consultation on the Renewables Obligation (Scotland) Order 2008 on 25th September 2007; it was open for 12 weeks to 13th December 2007.
2. We received 18 responses from a variety of organisations. The respondents can be split into three broad organisational types:
- Private sector - 12 responses
- Trade body/ union - 4 responses
- Public sector/regulatory - 2 responses
3. The consultation asked questions and sought views in two specific areas: firstly, and primarily, on setting the MSO level for 2008/09 to zero; and secondly, the consultation requested preliminary feedback from stakeholders regarding the potential introduction of technology banding to the ROS. There were a number of comments which raised issues outside these questions. This report briefly summarises these responses, although it should be noted that a separate and more detailed consultation on a banded obligation in Scotland will take place during 2008.
MSO level
4. The 8 respondents who specifically addressed the proposal to set the 2008/09 level at zero agreed unanimously that it should be set to zero.
5. A number of respondents raised the continued need for and role of the MSO. Several respondents strongly supported the MSO and believed it should be retained as a support mechanism until there is greater clarity on banding the Obligation.
"For the first time in the UK, the availability of the MSO gives a feeder market framework that justifies utility involvement in early small-scale development projects as a stepping stone to larger commercial projects."
"…proposed banding does not offer sufficient support for emerging wave and tidal technologies, and strongly supports the implementation of the Marine Supply Obligation for projects in Scotland."
6. Other respondents took a contrary view. While there was agreement that marine technologies should receive some form of support there was disagreement that the MSO or ROS were the correct way to do this. Several correspondents favoured support being delivered out with the RO system.
"The lack of eligible marine capacity being identified by industry, as mentioned in clause 8 of this consultation, implies that there is no immediate need for this technology to be specifically identified within the ROS at this moment in time."
"We firmly believe that early support for wave and tidal technology development is necessary and desirable, but that revenue support is not necessarily the most appropriate mechanism for fledgling technologies. We maintain that funds should be provided from outside the RO for capital and development support until the costs and risks of new technologies are better understood."
7. Other respondents highlighted the administrative difficulty of operating the MSO and banding proposals together and that MSO may not be capable of delivering second generation marine projects.
Banding proposals
8. A majority (10) were supportive of the proposals to band the ROS, although a few qualified their support on the grounds that banding's introduction seems inevitable.
9. 3 respondents clearly stated they were against banding. Reasons given include the potential to create uncertainty in the ROC market, that support for emerging technologies should be delivered outside the obligation system, and that not enough detail is known on how much additional support will be made available under banding.
10. A number of respondents also stressed the need for consistency across the UK Obligations in order to minimise complexity and increase transparency for electricity suppliers. However, others believed that the Scottish Government should set ROC bands higher than those elsewhere in the UK, arguing that the proposed band of 2 ROCs for wave and tidal energy would not be enough to develop the sector. Similar arguments were advanced in respect of other technologies, including biomass, and in respect of wind energy on the Scottish islands.
11. Several respondents suggested that banding proposals should be explored but must address the carbon benefits, impact on Scottish Renewables sector, headroom and ski slope issues and net neutrality of total cost of the ROS.
Next Steps
12. Based on the responses to the consultation, the Scottish Government intends to table the amendments to the ROS in 2008 as proposed and published, thereby setting the MSO level for 2008/9 to zero. Subject to the Scottish Parliament's consent, the amendments will take effect from April 1 2008.
13. The Scottish Government has also decided that banding should be introduced to the ROS, and that this mechanism is capable of replacing the MSO. However, in the absence of further detail regarding the availability of additional grant support, we do not believe that the band level proposed by BERR for wave and tidal is sufficient. We will publish a full consultation later this year, setting out our thinking in detail and seeking views on a number of aspects around the introduction of banding to the ROS.