Thank you, convener; and I also thank you, committee members and the clerks for allowing me the flexibility to appear late in your meeting today. I appreciate that you have had a long meeting, so I am grateful for your forbearance.
The order before the committee will, if approved, result in a minor amendment to the Renewables Obligation (Scotland) Order 2009. Before turning to the amendment itself, it might be helpful to provide a little bit of background to the renewables obligation order. There are three renewables obligation orders—one covering England and Wales, another for Northern Ireland, and one for Scotland. The orders place an obligation on United Kingdom electricity suppliers to source an increasing proportion of the electricity that they supply from renewable sources.
Renewables obligation certificates—ROCs for short—are awarded to eligible renewable generators in respect of the output that they generate. Suppliers can buy ROCs and use them to demonstrate that they have met their obligation, or they can pay a fixed sum into a buyout fund for each ROC or SROC—Scottish renewables obligation certificate—that they either cannot or choose not to present.
The obligation, as intended, has provided a hugely effective incentive for renewable generators, with capacity across Scotland having reached 10.3GW, as at the end of quarter 2 of this year. Indeed, the final figures for 2017 show that renewable generation supplied the equivalent of 69 per cent of Scotland’s electricity consumption—a record high level that is slightly higher than the figure quoted in the document, because since it was published we have had updated base figures.
Successive Scottish Governments have largely maintained an approach that is consistent with the other UK obligations. However, there have been important exceptions where we have tailored the Scottish obligation to better reflect Scotland’s particular needs and priorities. For example, in April 2009 we introduced enhanced ROC bands for wave and tidal projects in Scotland, and in April 2014 we introduced two new enhanced ROC bands to provide additional support for innovative offshore wind projects in Scotland.
The committee will recall that those devolved powers were curtailed by the Energy Act 2013, and the contracts for difference mechanism has now replaced the renewables obligation as a means of supporting new renewable capacity. However, although the obligations across Great Britain were closed to new capacity from April of last year, they will continue to run until 2037 for eligible projects.
I now turn to the content of the order itself. When the UK renewables obligations were closed in March 2017, changes were introduced that allowed generators to add capacity at accredited sites. That additional capacity would not be eligible for SROCs, but nor would it affect the eligibility of the existing capacity at those sites. However, article 17(4) of the Renewables Obligation (Scotland) Order 2009 has the effect of preventing any accredited hydro stations from adding capacity where that takes the declared net capacity of any such station above 20MW.
Our amending order will rectify that and allow hydro generating stations in Scotland to add extra renewable capacity while retaining their eligibility for Scottish ROCs only from the originally accredited capacity at their site. That will allow any generators who choose to do so to increase their renewable capacity and production without creating any additional costs for consumers. It will also bring hydro generating stations in line with all other technologies and allow them to compete on a level playing field.
We expect that the order is likely to have limited application, since it will be of relevance only to hydro generating stations that were accredited before 2002 and which are able to increase their declared net capacity above 20MW. Although its impact may be modest, it nonetheless provides a means to encourage additional renewable electricity generation in Scotland, which I believe is an equitable and sensible amendment.
Before I formally move the motion recommending the order, I am, of course, happy to respond to any questions that you or your fellow committee members have, convener.
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