Scottish ROC bands review

  • Insight

29 November 2011

As with the Department of Energy and Climate Change for the UK, the Scottish Government has opened up its consultation on the proposed changes to the banding levels in the renewables obligation. 

Though there is substantial convergence in the proposals made in both consultations, the dynamics of Scotland’s geography and energy policy mean that there are differences in emphasis north and south of the border.  Scotland is ideally placed to provide a platform for development of on and off shore wind and tidal technologies and the Scottish “Routemap for Renewable Energy” set out the ambitious target of achieve the equivalent of all of Scotland’s electricity demand from renewable sources by 2020.

In both consultations, the proposed levels of support to onshore and offshore wind and marine technologies are generally similar save that Scotland will not set a threshold for marine energy schemes benefiting from ROCs at 30 MW/h.

The list of the proposed bandings can be accessed on the Scottish Government’s website accessible here.

By means of summary, the main proposals are:

  • Marine and tidal technology: support at 5 ROC/MWh for wave and tidal technologies for developments which are running by 1 April 2017 – but no Scottish cap at 30MW capacity on marineenergy schemes aiming to attract the highest ROC banding;
  • Onshore wind and offshore wind: from 1 April 2013, a reduction in the onshore wind banding from 1 ROC/MWh to 0.9 ROC/MWh: offshore wind will decrease from 2 ROC/MWh to 1.9 ROC/MWh in 2015/16 and come down to 1.8 ROC/MWh in 2016/17. This replicates the position in England and Wales; and
  • Solar PV:  here, the current banding level of 2ROC/MWh will stay in place until 2014 but will come down to 1.9 ROC/MWh in 2015/16 and 1.8ROC/MWh in 2016/17.

In general, reductions to bandings will also apply to hydro schemes, advanced conversion technologies (pyrolysis and gasification), energy from waste, and landfill gas.

It is with biomass that we see the main divergence in approach in the consultations despite this technology’s potential in achieving the 2020 targets as identified in the UK- wide Routemap for renewable energy.

England and Wales propose to maintain the level of support for dedicated biomass plants at 1.5 ROCs per MWh until 2014 and then to reduce it to 1.4 per MW/h from 2015. In addition, they are looking to keep the banding for dedicated biomass with CHP generating stations at 2 ROC/MWh – there will be no new accreditations from 1 April 2015 and continued support for these will come from the Renewable Heat Incentive.

Scotland has opted to vary the level of assistance for biomass depending on the size of the development seeking support. Small efficient biomass facilities will attract 1.5 ROCs per MWh and biomass with CHP will take 2 per MWh until 2015 and 1.9 from 2015-16.  However, those developments that have a larger generation capacity will stop receiving subsidies – the exact level at which subsidies will fall away will be decided following dedicated research into the carbon efficiency of biomass. As in England and Wales, there will be no new accreditations issued for dedicated biomass with CHP from 1 April 2015.

The “variable geometry” for the biomass industry in the UK may be seen as a detractor from the direction in the UK as a whole and of concern to the Scottish biomass industry and, therefore, worthy of comment in this consultation. On the other hand, in light of the tangible progress made, and the undoubted potential that Scotland has, in taking forward marine and tidal technologies, the Scottish policy support may be well justified at a time when the resources available are limited.

The closing date for written responses to the consultation is 13 January 2012. The new ROCs, with any changes made as a result of the consultation, will apply from 1 April 2013. The consulation document is available on the Scottish Government website accessible here.

Bruce Farquhar, Partner and Head of our Renewable Energy Team, is happy to discuss any issues arising from the consultation and, indeed, is well placed to take responses to the Scottish Government forward on your behalf.

This bulletin is for general information only and does not constitute legal, investment or other professional advice. Please contact us should you require advice on any particular legal issue. Anderson Strathern LLP accepts no responsibility for any loss that may arise if reliance is placed on any information or opinions expressed in this bulletin.