[Legislative]

1. [Scottish Policy] [Legislative] • Non Fossil Fuel Obligation (NFFO) • - Equivalent to SRO in Scotland • Subsidies for renewable energy plants • -Funded by Fossil Fuel Levy and DTI • Electricity Pool Established • Electricity Market opened up. • Creation of a trading system based around electricity companies bidding to buy from generators. • Scottish Renewables Order (SRO) • Scottish equivalent of NFFO, subsidised projects: • SRO-1, 1994, 76 MW • SRO-2, 1997, 112 MW • SRO-3, 1999, 150 MW • Scottish Parliament Established • - Responsibility for Energy Policy handed over to Scottish parliament • Renewables Obligation Scotland • Electricity Suppliers obligated to ensure 10% of electricity supplied to be from renewable sources by 2010. • Cost to consumers limited using a price cap • Successor of SRO (NFFO in England and Wales)

2. [Scottish Policy] [Economic] • Climate Change Levy, 2001 • -Energy Tax on non domestic users of 0.43 p/kWh • -CHP exempt from levy, in line with the target of 10,000 MW capacity by 2010 for the entire UK. • -Renewables exempt, Issued with Levy Exemption Certificates (LEC’s). • - LEC’s traded with electricity sold to suppliers who claims CCL exemption on behalf of customers supplied • Renewables Obligation • -Suppliers who do not meet targets are forced to pay buy out price set by the Government. Is constant for all technologies. • -buy out is paid back to suppliers who meet requirements, providing an incentive for compliance with the obligation.

3. [Scottish Policy] [Research and Development] • DTI responsible for R+D • Government Funding, 2001-2004 • -£267 million to promote renewable technologies • Includes: • Capital Grants: • -£39 million for offshore wind • -Around £50 million from the New Opportunities Fund (NOF) for offshore wind and energy crops. • -Maximum grant is 40% of eligible cost • -Future Funding: • -Further £100 million to be made available after the completion of the performance and Innovation Unit’s report on renewable energy. • Project Funding shared with Industry • e.g. Tidal Stream “Stingray” project, 2002, Shetland Isles • -75% funded by DTI • Engineering and Physical Sciences Research Council (EPSRC) • Funds students in sustainable engineering, £11 million worth of projects underway • A new deal for Hydro, 2001 • Funded refurbishment of 30 stations • Expected increase in generation of 10-20 MW

4. [Scottish Policy] [Environmental Drivers] • Kyoto Agreement, 1997 • UK required to reduce greenhouse gas emissions by 12.5% in 2008-20012, compared to 1990 levels. • Greenhouse Gas Emissions • -Government decide to suggest a domestic goal of 20% reduction by 2010, compared to 1990 levels. • -United Kingdom National Air Quality Strategy, 1997. Gives specific targets for a variety of atmospheric pollutants. • Oil Slicks of 1993, 1996 • -Bad publicity for oil industry which already suffered from the Piper Alpha disaster. Public aware of potential problems with oil. • Hydro Potential Realised • Around 10% of current Scottish Generation • Any future developments will be small scale • Huge Renewable Potential • -Windiest country in Europe! High potential for on and offshore supply. • -Wave power potential on West Coast