1. [Legislative] [Scottish Policy] 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. [Economic] [Scottish Policy] 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. [Research and Development] [Scottish Policy] 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. 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 Project Funding shared with Industry -e.g. Tidal Stream “Stingray” project, 2002, Shetland Isles -75% funded by DTI

4. [Environmental Drivers] [Scottish Policy] 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