The Scottish Government

This item was published during the term of a previous administration that ended in April 2007

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Power Contracts Boost for Rural Jobs

09/04/1999

Up to 680 jobs, many in rural areas, could be created following the signing of contracts by 53 renewable energy project winners to supply power to Scotland's two electricity companies, Scottish Business and Industry Minister Lord Macdonald announced today.

Under the Government's commitment to provide more electricity from renewable sources Lord Macdonald said:

"I am delighted to announce that all 53 of the projects recommended by the Scottish Office to supply electricity to ScottishPower and Scottish and Southern Energy have now finalised their contracts. These innovative projects will make a significant contribution to the renewable industry across the whole of Scotland. Renewable energy is not only good for the environment, but good for the economy.

"Although experience has shown that not all of the projects will come to fruition, there remains the potential for up to 600 jobs to be created during construction stages and around 80 permanent posts once projects are operational. These jobs will be especially welcome in rural areas where a significant number are likely to be located.

"The Government is committed to increasing renewable energy sources and by doing so safeguarding the environment by reducing greenhouse gases. These new projects will help achieve the Government's emission targets."

Subject to obtaining all necessary consents the new projects will provide almost 150MW of new renewable electricity capacity from wind, hydro, waste to energy, biomass and wave power. ScottishPower and Scottish and Southern Energy are obliged to obtain this generating capacity under the third round of the Scottish Renewables Obligation (SRO3) which came into force in March.

BACKGROUND

1. The primary purpose of the SRO is to create an initial market in renewable technologies so that in time they might be able to compete with conventional sources of generation.

2. The third order under the Scottish Renewables Obligation came into force in March 1999 and requires the public electricity suppliers in Scotland (ScottishPower and Scottish and Southern Energy) to secure almost 150MW of new renewable generating capacity. A list of the 53 contracts now signed under SRO3 is attached.

3. SRO3 is the third order made by the Secretary of State for Scotland under the Electricity Act 1989. SRO1, which provided for 76MW and involved 30 projects, was made in December 1994. SRO2 provided for 114MW of new capacity involving 26 projects and came into force in March 1997. The SRO arrangements parallel those made under the Non-Fossil Fuel Obligation in England and Wales.

4. Under the SRO premium prices are paid to developers by the public electricity suppliers. The additional costs are met through a Fossil Fuel Levy upon all electricity suppliers which they in turn pass onto consumers. The Director General of Electricity Supply is responsible for setting the annual rate of the Levy. The year's rate is nil because of a surplus of unspent funds under the scheme, but it is expected to rise gradually to around two per cent as projects come on stream over the next five years.

5. The award of a contract under the SRO in no way implies preferential treatment when it comes to the planning process and developers still have to apply for permission in the usual way.

News Release: 0927/99
9 April, 1999