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4th Report, 2010 (Session 3)

Subordinate Legislation

Remit and membership

Remit:

To consider and report on the Scottish economy, enterprise, energy, tourism and all other matters falling within the responsibility of the Cabinet Secretary for Finance and Sustainable Growth apart from those covered by the remits of the Transport, Infrastructure and Climate Change and the Local Government and Communities Committees.

Membership:

Ms Wendy Alexander
Gavin Brown
Rob Gibson (Deputy Convener)
Christopher Harvie
Marilyn Livingstone
Lewis Macdonald
Stuart McMillan
Iain Smith (Convener)

Committee Clerking Team:

Clerk to the Committee
Stephen Imrie

Senior Assistant Clerk
Katy Orr

Assistant Clerk
Gail Grant

Subordinate Legislation

The Committee reports to the Parliament as follows—

1. At its meeting on 10 March 2010, the Economy, Energy and Tourism Committee considered the following affirmative instrument—

the draft Renewables Obligation (Scotland) Amendment Order 2010.

2. The details of the draft amendment Order and the explanatory notes can be found on the website of the Office of Public Sector Information1.

Background

3. The Renewables Obligation (Scotland) Order (ROS) was first made in 2001 under powers contained in the Electricity Act 1989 and imposes an obligation on licensed electricity suppliers supplying electricity in Scotland to provide suppliers supplying electricity in Scotland to provide an increasing percentage of that supply from qualifying renewable energy sources.

4. Following reviews of its operation and to accommodate the introduction of a number of changes, the ROS has been revised and replaced each April from 2004.

Changes introduced by the proposed 2010 Amendment Order

5. According to the Scottish Government, the main objective of the ROS is to ensure that it is capable of driving the substantial increases in renewable electricity in Scotland which will be necessary to help meet the Scottish Government targets. The changes will:

  • Remove the existing cap of 20% on renewable generation;

  • Increase the level of ‘headroom’ from 8% to 10%;

  • Extend the lifetime of the ROS to 2037, while limiting participation under the Obligation to 20 years;

  • Introduce a temporary higher band for offshore wind generation accredited after a certain date; and

  • Transfer microgenerators out of the ROS and create an option for other small generators to either stay within the ROS or transfer to a Feed-in Tariff (FIT).

Enabling Powers

6. The 2010 Amendment Order is being made under powers conferred by sections 32(1) and (2), 32a(1) and (2), 32C(1), (2) and (8), 32D(1) and (2), 32G, 32J(3) and 32K(1) and (3) of the Electricity Act 1989, as amended and introduced by the Energy Act 2008.

European Directive

7. The ROS, in tandem with the Renewable Obligation Order (ROO), forms an important part of the UK’s compliance with article 3.1 of the European Directive on the promotion of electricity produced from renewable sources (Directive 2001/77/EC).

Regulatory Impact Assessment

8. A Regulatory Impact Assessment was undertaken in relation to the draft Order.2

Issues raised during the debate

9. During the debate, the Committee sought clarification on the implications of the draft Order not gaining State Aid approval from the European Commission. In his response, Jim Mather MSP, Minister for Enterprise, Energy and Tourism (“the Minister”) said that if the new Order is not granted State Aid approval, the existing legislation will remain in place.

10. The Committee also asked the Minister to give more details about the way in which feed-in tariffs were to be rolled out and how people would be informed of the new scheme. The Minister said that he had had discussions with a wide array of people and that people were really beginning to get the message across as to the implications when they start to co-operate and collaborate to taking advantage of these new opportunities.

11. Committee members also raised the issue of the impact of the increased costs to consumers as a result of the ROS. According to evidence received by the Committee, Ofgem estimates the cost to the consumer, at the moment, as an extra £12 per year. The Minister was asked if any representation had been made by any consumer representative bodies on these additional costs. In response, the Committee was told that the Scottish Government had not received any representations from consumer representative bodies on this subject. Some members of the Committee were concerned that the reason for this was that consumer organisations were unaware of the implications of the draft Order. The Scottish Government said that the Renewable Obligation was long established but that if there was more in the future that it could do to make it more explicit to consumers, then the Scottish Government would seek to do that.

12. The Committee welcomed the suggestion of higher banding for offshore wind at this critical time and asked if there was anything outwith the scope of ROS that the Scottish Government might be doing to enable the offshore wind sector to maximise its supply chain resource in Scotland. In response, the Minister said—

“That is the key function of our continuing dialogue with the sector through FREDS and its sub-groups. I think that, in total 170 people in FREDS and its sub-groups are in regular dialogue. They represent a variety of organisations, from engineering organisations to academic organisations. We intend to keep that dialogue going.”3

13. Finally, the Committee discussed the timetable for the introduction of the new feed-in tariffs and the implications for current owners of microgeneration schemes. The Scottish Government confirmed that if someone went ahead with a microgeneration before 15 July 2009, without applying for support under the ROC scheme, they would not be eligible to apply for the new feed-in tariffs.4

Subordinate Legislation

14. The Subordinate Legislation Committee (SLC) considered this instrument and agreed that no points arose in relation to this instrument5.

Motion

15. After the debate had concluded, the Minister moved motion S3M-05847—

That the Economy, Energy and Tourism Committee recommends that the draft Renewables Obligation (Scotland) Amendment order 2010 be approved.

16. The motion was agreed to by the Committee.

Recommendation to the Parliament

17. As a result, the Economy, Energy and Tourism Committee recommends that the draft Renewables Obligation (Scotland) Order 2010 be approved.


Footnotes:

3 Scottish Parliament Economy, Energy and Tourism Committee. Official Report, 10 March 2010 Col 3321.

4 Scottish Parliament Economy, Energy and Tourism Committee. Official Report, 10 March 2010 Col 3323.

5 Subordinate Legislation Committee 14th Report, 24 February 2010.