Proposed new subsidies for Scottish wave and tidal power

Scottish Executive consultation (15 pages, PDF) on a draft order to provide additional subsidies to wave and tidal power on top of the Renewables Obligation (Scotland). As previously indicated, the proposed mechanism involves a new Scottish marine supplier obligation (in fact two separate obligations for wave power and tidal power) alongside the renewables obligation. The Executive acknowledges widespread opposition to this proposal but considers that support for wave and tidal power is needed now, and that the UK energy review endorsed the concept of a banded renewables obligation.

The buy-out prices would be £105/MWh for tidal power and £175/MWh for wave power (several times the buy-out price under the renewables obligation), guaranteed in money terms until 2027. Buy-out revenues would be recycled to suppliers who present marine supplier obligation certificates, as with the renewables obligation, meaning that effective support to generators would be higher than the buy-out price if the obligation is not reached. A specific headroom mechanism is proposed to set the volume of the obligation in a way that ensures that it is not likely to be reached, provided that the qualifying capacity is less than a 75MW cap for the first phase (2008-2015).

The document states that a submission to the European Commission for State aid clearance is being prepared. See Renewable cat out of bag | viewpoint: Franck for a comment on this point.

The intended implementation date is 1 April 2007. Responses to the consultation are due by Tuesday 12 December 2006.

The Executive also launched a consultation on exempting the European Marine Energy Centre from the Section 36 consent requirement for offshore power stations. Responses on this issue are due by Monday 16 October 2006.

For further information or advice please contact Franck Latrémolière.

Filed under Electricity, State aid.

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