The Nordic Optical Telescope (NOT) is located at an altitude of 2400 m, and a latitude of +28°, on the Roque de los Muchachos mountaintop, at La Palma, Canary Islands. Above the cloud layer the sky is clear, atmospheric turbulence very low, and conditions for observations excellent.

Dr. Vilppu Piirola was re-appointed as the Director of the Nordic Optical Telescope Scientific Association for another three-year term from May 1998. The staff on La Palma was strengthened by two new members in May 1997, Michael Andersen as a support astronomer, and Jacob Clasen as a software specialist. Heidi Korhonen (University of Oulu) has worked in the PhD student position at the NOT from January 1998, and Lars Freyhammer from July 1998. Dr. Tim Abbott was appointed to a staff astronomer position from November 1998, replacing Dr. Colin Aspin, who accepted a position at the Gemini (Oxford) telescope on Mauna Kea, Hawaii. The total NOT staff on La Palma consisted of 12 employees in the end of 1998.

Work has been continued to implement the active optics system at the NOT for routine use. New CCD camera system for the wavefront sensor (WFS) has been installed to the telescope and the WFS software for the telescope optics alignment and active control of the 2.5 m diameter main mirror (M1) by the pneumatic support bellows system tested during 1997-98. Further software developments have been continued, with the aim to provide a fast and essentially automatic alignment procedure of the mirrors and correction of the remaining low order errors in the M1 surface, to maintain the excellent image quality of the NOT telescope.

A new method of investigating the seeing disturbances from the immediate surrounding of the telescope has been developed at the NOT. It is based on sequences (about 100 ms time resolution) of extrafocal images, and the length of the interval over which the seeing patterns in successive images are correlated. For atmospheric seeing this is typically < 1 s, but for local effects longer, 5-10 s. Thus the time scale of the correlations is a good indicator of deteriorating effects arising inside the dome, sometimes very close to the telescope optics, if temperature gradients exist. The comprehensive temperature monitoring data for the telescope structure and its surroundings are used to look for correlations with the seeing characteristics, particularly for the evening hours when the ambient temperature decreases. There are indications that further improvements of the seeing can be achieved by enhanced daytime cooling of M1, without increasing the total cooling power. The system for cooling the M1 during the day has been installed and regularly used from 1997.

The correlations of the local seeing with the wind direction and speed and other weather chararacteristics have also been searched for, and the contributions from different parts of the telescope and its environment to the total dome seeing 'error budget' and image deterioration have been investigated. Evidence has been found for effects from warmer air above the M1 when observing down wind. The enforced air flow on M1 for up-wind observing directions appears to give better seeing. A forced ventilation of the primary will be implemented to further improve the excellent image quality of the NOT.

The low order adaptive optics system (tip-tilt corrections for atmospheric turbulence) was successfully implemented in 1997. The device (HiRAC I) utilizes transmissive optics in the convergent light beam before the Cassegrain focus and is thereby very compact, as no re-imaging is necessary. The focal position remains essentially unaffected. Improvement of 0".10- 0".15 in seeing values was achieved in good conditions. An upgraded version (HiRAC II) with five-mode corrections, including astigmatism and focus corrections, is under development, and is expected to be ready in 1999.

The NOTCam Near-IR camera (1-2.5 µm) using a 1k x 1k Rockwell array, is under construction and the commissioning is foreseen in summer 1999. The instrument will also provide low resolution spectroscopy and polarimetric facilities in the 1-2.5 µm wavelength region.

The ALFOSC low resolution spectrograph/focal reducer, which has been made available at NOT under agreement with Instituto de Astrofisica de Andalucia, has been successfully used in 1997- 98. An improved quality detector, a 2k x 2 k thinned Loral CCD with high blue and UV sensitivity, was installed in July 1997.

The plan for further major instrument developments also includes a wide-field (17x17 arcmin) Focal reducer with an 2x2 mosaic of 2048 x 2048 pixel CCD's. The construction of this instrument was started at Tuorla in February 1998. In April 1998 the Ministry of Education granted 1 MFIM to the University of Turku for the Focal reducer project in 1999, which completes the funding for the instrument.

The major scientific highlights at the NOT include high resolution (0.1 arcsec) imaging of gravitationally lensed quasars, studies of active galaxies and their nuclei, optical identification and follow-up observations of gamma ray burster optical counterparts, stellar surface mapping of active stars, studies of star forming regions and young stars, investigations of cyclotron emission regions in highly magnetic binary stars, etc., as described in greater detail elsewhere in this volume, and in the Nordic Optical Telescope Triennial Report 1995-97, and the Annual Report 1998 of the NOT.

The worldwide interest in the great potential offered by the NOT for high resolution observations is demonstrated by the large oversubscription factor. The requested amount of telescope time exceeds by a factor of about three what can be allocated, and 15-20 % of all observing proposals come outside the Nordic countries and Spain.

Instrumentation, future development and scientific results obtained with the NOT were discussed in the meeting Astrophysics with the NOT held in Turku in August 12-15, 1998. The meeting was attended by about 70 active users of the telescope from all Nordic and several other countries. Presentations covered a wide range of subjects from gamma ray bursts to quasars, from comets and asteroids to detailed plans for new instruments. The scientific organizing committee was chaired by V. Piirola and the local organizing committee by H. Karttunen.

One concern for the future was whether the NOT can still be competitive when new big telescopes are mushrooming all over the world. As Prof. Johannes Andersen pointed out in his talk about the future of the NOT, the answer is yes, but it requires careful planning and concentration on projects that can best utilize the strengths of the NOT, like high image quality and flexibility in scheduling observations.