Chamber and committees

The costs of transmission losses are not allocated to the consumer. They are dealt with through the Balancing Mechanism used by the National Grid as a means of balancing power flows on to and off of the electricity Transmission System in Great Britain. The costs of transmission losses are met by electricity generators and distribution companies drawing the electricity off the transmission network.

Elexon is the body that administers the Balancing Mechanism. More information can be found on its website:

http://www.elexon.co.uk/ELEXON%20Documents/Transmission_Losses.pdf

The location of marine renewables projects around Scotland will be a matter for developers, subject to their obtaining both a site lease and the necessary marine license from the Scottish Government. The estimated additional cost incurred by this forecast capacity is based on the costs being spread across the UK – deliberately and advisedly so, since this is how the Renewables Obligation operates and will continue to do so.

The projects that have secured funding through the Wave and Tidal Energy: Research, Development and Demonstration Support (WATERS) programme have to date drawn down £795,000.

The data collected as part of the project assessment process highlighted that the successful bids would support 261 jobs relating to research, development and commercialisation activities.

The Head Street scheme has completed the statutory process; the Den realignment scheme is currently in preparation and construction of both schemes is dependent on the availability of funding and the competing priorities of other schemes on the network.

At Barrmill Road the A737 Road Safety Route Action Plan is on-going. It will propose measures aimed at reducing the number of injury accidents. Some of the early identified outcomes from the bend assessment section of this Road Safety Route Action Plan will be implemented during December 2011.

The European Commission is currently reviewing responses to its consultation on the review of the Community guidelines on financing of airports and start-up aid to airlines departing from regional airports. The Scottish Government’s response can be found at:

http://ec.europa.eu/competition/consultations/2011_aviation_guidelines/index_en.html.

The Scottish Government believes that the TAC (Total Allowable Catch) for all fish stocks should be set in line with scientific advice. Despite both ICES (International Council for the Exploration of the Seas) and STECF (Scientific Technical and Economic Committee for Fisheries) recommending a 410% increase in TAC for West of Scotland haddock, the European Commission is proposing only a 25% increase. Increasing the TAC by 410% would maintain the level of fishing mortality within the MSY (maximum sustainable yield) framework, which the Commission advocates. The SSB (Spawning Stock Biomass - weight of mature fish in the stock) is now above precautionary limits and is increasing steadily. The stock is showing strong signs of recovery and the Scottish Government believes that limiting the TAC to a 25% increase would result in a significant increase in discards, therefore we would prefer to be closer to 410% as justified by scientific advice. While we accept that a large increase in haddock TAC could risk increasing the mortality of West of Scotland cod, we are keen to work with the European Commission to develop appropriate selectivity measures to try and avoid this.

As part of its Retail Market Review, Ofgem has made a number of proposals to make the market work better for consumers, including simplification of tariffs and enhancing liquidity in the wholesale market by requiring the big six energy companies to auction up to 20 per cent of their power generation. These proposals have the potential to enhance consumer choice and encourage competition in the market.

Ofgem has estimated that referral to the Competition Commission could take up to three years, delaying much needed investment in new generating capacity. We would urge Ofgem to bring forward their proposals as soon as possible, and better still for the energy companies to take rapid voluntary action.

We have not set targets for individual technologies as part of our overall renewable electricity target for 2020. However, we do expect offshore renewables to play a major role in meeting that target, and are making every effort to deliver the support and the infrastructure which these technologies will need to develop and flourish.

As a small, open economy, Scotland cannot expect to be immune from the fragile economic conditions that currently exist in the global economy.

As set out in the Government Economic Strategy the Scottish Government is taking forward a range of actions to support growth and stimulate demand across three priority areas:

prioritising capital investment, including the use of innovative financing mechanisms and through switching resource spending to capital spending;

improving access to finance for medium and small sized businesses through the Scottish Investment Bank which is supporting Scottish companies, and working to leverage new private sector investment through initiatives such as the National Renewables Infrastructure Fund; and

continuing with measures to boost economic confidence and protect household incomes at a time of rising prices, including our policy of no compulsory redundancy for staff in our pay remit and the NHS in Scotland, the Small Business Bonus Scheme, the council tax freeze, the abolition of prescription charges and other core social and economic commitments through the delivery of a “social wage”.

However, we are limited in our powers to stimulate demand as many of the key economic and financial levers are reserved to the UK Government. The UK Government’s lack of a credible plan for growth threatens the recovery and we have called on the Chancellor to implement a Plan B to promote growth and protect jobs.

Analysis carried out in connection with the current consultations on the Renewables Obligation (RO) for wave and tidal stream technologies – based on a deployed capacity of 52 MW during the period to 2017 – estimates a peak cost to consumers through their electricity bills of around 50p per year.

The extent to which the costs of the RO are actually passed through to electricity consumers is a matter for electricity suppliers.