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A consultation will be launched this week on ways of giving Scottish Water increased flexibility to help build a low carbon economy.
The Scottish Government will launch 'Building a Hydro Nation - A Consultation', examining how Scotland, and in particular, Scottish Water, as a publicly-owned utility, can better exploit its expertise, assets and Scotland's water resources for the continuing benefit of water customers, the environment and the wider Scottish economy.
The consultation will seek views on the range of opportunities for Scottish Water to take on new activities while remaining under public ownership - from converting redundant treatment works into recycling facilities to putting hydro electric schemes in redundant reservoirs; from upgrading sewage treatment plants to harvest biogas to new wind power projects on its land; and playing a role in international development, either on a commercial or humanitarian basis.
Mr Stevenson said:
"Scotland is rightly seen internationally as a leader in the transition to a low carbon future. We have the most ambitious climate change legislation anywhere in the world, and we are now more than half way to reaching that world-leading 2020 emissions reduction target.
"Scottish Water, already a huge success story, has the potential to play a greater role in the development of a low carbon economy and grow from a successful utility to become a widely based, dynamic, world-leading water organisation, while remaining within public ownership.
"For example, we could use Scottish Water's assets to generate enough renewable energy to meet its own needs and export to the grid, making a significant contribution to our targets.
"Our consultation will seek views on the best ways of ensuring Scottish Water is able to take on additional functions and develop new commercial opportunities."