Committee
Net Zero, Energy and Transport Committee 03 March 2026 [Draft]
03 Mar 2026 · S6 · Net Zero, Energy and Transport Committee
Item of business
Subordinate Legislation
Renewables Obligation (Scotland) Amendment Order 2026 [Draft]
:I will take the committee through the amendment order. It makes one technical but important change to the renewables obligation Scotland scheme. Currently, certain elements of the scheme known as the buyout price and the mutualisation cap rise each year in line with the retail prices index. From April this year, subject to parliamentary approval, those values will be updated using the consumer prices index, which will lead to savings in the energy system.The renewables obligation Scotland scheme has supported renewable electricity generation in Scotland since 2002 by issuing certificates to generators that can then be sold to suppliers. Those electricity suppliers can use the certificates to meet their obligations under the scheme, or they can make a payment that is known as the buyout price. The amendment order will ensure consistency across the UK, which is essential for market stability, and it will ensure a level playing field for suppliers and generators that operate across borders.The consumer prices index is recognised as a more accurate and reliable measure of inflation, whereas the retail prices index tends to produce higher inflation figures, which could lead to the buyout price rising faster than is justified. That would add unnecessary and avoidable costs on electricity suppliers, which are ultimately passed on to households and businesses. Switching to the consumer prices index will ensure fairness for consumers, while maintaining strong investor confidence in our renewables sector.The change does not alter how the overall scheme works; it is a simple technical change to the annual indexation mechanism only. With the UK Government and the Northern Ireland Assembly, we jointly consulted to seek views on two options, which were an immediate switch to the consumer prices index or gradual realignment. Following careful consideration of the responses, all three Governments agreed to proceed with an immediate switch to the consumer prices index. We recognise that many industry stakeholders were initially concerned about the potential for change to undermine investor confidence and increase the cost of capital, but we consider that that approach strikes the appropriate balance between reducing costs for consumers and supporting continued investment in the renewables industry.The change has no expected financial impact on the Scottish Government. We will continue to engage with industry stakeholders and monitor the operation of the scheme. It is a necessary and proportionate amendment to keep the scheme fair, efficient and aligned across the UK.
In the same item of business
The Convener
Con
Welcome back. Item 4 is consideration of a further draft statutory instrument. The order changes the index that is used to make inflationary adjustments to t...
Gillian Martin
SNP
:I will take the committee through the amendment order. It makes one technical but important change to the renewables obligation Scotland scheme. Currently, ...
The Convener
Con
If you would not mind, cabinet secretary, can you tell me where the UK Government and the Northern Ireland Executive are in relation to their legislation on ...
Gillian Martin
SNP
:I will go to my officials for that.
Madeleine Plater (Scottish Government)
This order is the first piece of legislation to make the change. All three Governments are looking at amending their respective legislation on the renewables...
The Convener
Con
When will the other pieces of legislation go through?
Madeleine Plater
I do not have the dates in front of me, but it will be in the next few weeks.
The Convener
Con
That would be April.
Madeleine Plater
Yes.
The Convener
Con
That is why I was trying to find out where we were.
Madeleine Plater
The legislation needs to come into force before 1 April so that all the arrangements on the operation of the scheme can be made.
The Convener
Con
If the Northern Ireland Assembly did not agree to such legislation, where would that leave us?
Gillian Martin
SNP
:I think that it will, because that is the recommendation that has been made by the Government, and no substantive concerns were raised in the consultation.
The Convener
Con
The Government does not always get its way—I am sure that you would agree, cabinet secretary.Do members have any other questions?
Douglas Lumsden (North East Scotland) (Con)
Con
Cabinet secretary, you mentioned that this will not affect people’s bills at all—is that correct?
Gillian Martin
SNP
:There will be cost savings across the energy system, but the Department for Energy Security and Net Zero and the Treasury will look at the impact on energy ...
Douglas Lumsden
Con
:Of course. Am I right in thinking that these are the obligations that have been removed from people’s bills and moved into general taxation?
Gillian Martin
SNP
:Yes.
Douglas Lumsden
Con
:Thank you.
The Convener
Con
We will move on to the next agenda item and the debate on motion S6M-20600, which calls on the committee to recommend that the draft Renewables Obligation (S...
The Convener
Con
It seems that no members want to make a contribution. Cabinet secretary, I assume that you do not want to sum up, but you can do so if you want to.
Gillian Martin
SNP
:No—I am fine, thank you.
The Convener
Con
The question is, that motion S6M-20600 be agreed to.Motion agreed to,That the Net Zero, Energy and Transport Committee recommends that the Renewables Obligat...
The Convener
Con
I invite the committee to delegate authority to me as convener to approve the draft of the report for publication. Are members happy with that?Members indica...
The Convener
Con
I thank the cabinet secretary and her officials for attending, and I suspend the meeting briefly to allow for a changeover of witnesses.09:07Meeting suspende...