Lord Smith has said that the responsibilities for designing and implementing energy efficiency and fuel poverty strategies should be devolved to Holyrood.
The report adds the Scottish Government and Scottish parliament should have a “formal consultative role” in designing renewables incentives and strategic priorities.
Lord Smith also states that Ofgem should lay its annual report before the Scottish parliament and appear before committees of the Scottish Parliament.
The Smith report also states that the licensing of onshore oil and gas extraction underlying Scotland will be devolved to the Scottish Parliament.
However, the responsibility for setting the way that money is raised for energy efficiency and fuel poverty schemes should remain with the Westminster government, according to the report.
Scottish Renewables’ chief executive Niall Stuart said: “We think it is right that Scotland should have a formal role in energy market regulation and renewables and we are pleased to see this enshrined in the Commission’s report.
“We have argued for some time that the energy regulator, Ofgem, should be increasingly accountable to the Scottish Parliament, as well as Westminster, to ensure the issues that matter to the people and economy of Scotland are reflected in the organisation’s work.”
However, Scotland’s first minister Nicola Sturgeon welcomed the transfer of those powers recommended by the report but added that more powers should be devolved.
She said: “I am disappointed that the report falls well short of the proposals from the Scottish Government and those from a wide cross section of civic Scotland – proposals which would have ensured a powerhouse parliament in line with the various commitments made to home rule and maximum devolution.”