ABERDEEN, Scotland -- Germany has feed-in tariffs. California offers credits. In the U.K. they have a carrot and stick program.

To encourage renewable energy, the country offers what it calls Renewables Obligation Certificates, or ROCs, according to Tom Lamb, the head of the energy division of Scotland Development International, the government's industry development arm.

The ROCs work as follows: Utilities in the U.K. are required to get a certain portion of their power from renewable resources. By 2020, the U.K. wants to receive 15 percent of its power from renewables while Scotland alone wants to get 50 percent of its power from renewables, including hydroelectric, by 2020 (see Tidal Power on the Cheap?). By 2011, Scotland expects to get 31 percent of its power from renewables including hydroelectric with about 20 percent of the overall total coming from wind, wave and other non-hydro resources.

To get it, independent power providers generate clean electricity. When they do, the government gives them a ROC. The base price of a ROC is around £37 per megawatt/hour, he said. Utilities then buy these. But, because they are in high demand, the actual selling price is around £51 per megawatt hour.

"Utilities buy them to offset their obligations," he said. If they don't, they have to pay penalties. Renewable energy developers are thus encouraged to build wind farms to get ROCs while utilities are compelled to buy what they can. It's arguably simpler to maintain than a feed-in or credit program because it depends on less direct, active government involvement and administration.

The demand for ROCs exceeds supply, says Allan MacAskill, business development director for SeaEnergy Renewables, which wants to build offshore wind platforms. In five years, the company hopes to have 1 gigawatt of offshore wind under its belt (see When Oil Rig Met Wind Turbine).

The ROC system is also being tweaked to favor certain kinds of renewables, the kind that primarily help local businesses sell equipment and power. A ROC on offshore wind, a specialty of Scotland's, counts as 1.5 ROCs. ROCs generated from tidal power, when it comes online, count as 3 ROCs. Wave power ROCs will count as 5. The government is helping foster all of these businesses. It has set up wind and wave testing facilities in the Orkney Islands where companies can test prototypes, and it is expected to get funding for an offshore wind-testing lab in Aberdeen.

Right now, of course, there is little offshore wind while wind and tidal power are in the experimental stages. The picture, however, should change. The Scottish government next week will announce the winners on auctions for offshore wind leases. In all, the three leases could lead to wind farms that generate up to 2.3 gigawatts of power. A wind farm just off the coast of Aberdeen in the center of one of the major oil producing fields in the North Sea could generate close to 1 gigawatts when fully built out. (Right now, there are two experimental jacket style turbines that can crank out up to 5.5 megawatts each. These turbines provide power right now to oil drilling platforms)

Scotland wants 10 megawatts of tidal and/or wave power by 2010, according to Edwina Cook, business development director of the European Marine Energy Centre (EMEC) in Stromness.

The U.K. is also looking at a feed-in tariff for heat, he said. In this scenario, large industrial power users would get credits for providing their waste heat, presumably to themselves. The details are being worked out, SDI's Tom Lamb said.