Renewables Obligation Certificates
From Wikipedia, the free encyclopedia
The Renewables Obligation (RO)[1] is designed to incentivise the generation of electricity from renewable sources. It was introduced in England and Wales and Scotland in April 2002 and in Northern Ireland in April 2005.
The RO places an obligation on licensed electricity suppliers in the United Kingdom to source an increasing proportion of electricity from renewable sources. In 2006/07 it is 6.7% (2.6% in Northern Ireland).
Suppliers meet their obligations by presenting Renewables Obligation Certificates (ROCs). Where suppliers do not have sufficient ROCs to cover their obligation, they must make a payment into the buy-out fund. The buy-out price is a fixed price per MWh shortfall and is adjusted in line with the Retail Prices Index each year. The proceeds of the buy-out fund are paid back to suppliers in proportion to how many ROCs they have presented.
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[edit] What is a ROC?
A ROC is the green certificate issued for eligible renewable electricity generated within the United Kingdom and supplied to customers in the United Kingdom by a licensed supplier. ROCs are issued by Ofgem to accredited renewable generators (or in the case of generating stations subject to a NFFO (non-fossil fuels obligation), SRO or Northern Ireland NFFO contract, to the nominated electricity supplier).
One ROC is issued for each Mega Watt hour (MWh) of eligible renewable output. ROCs are issued into the ROC Register and so are electronic certificates.
[edit] The legislation
The Utilities Act 2000 gives the Secretary of State the power to require electricity suppliers to supply a certain proportion of their total sales in the United Kingdom from electricity generated from renewable sources. From this came the three Orders. The Renewables Obligation (England and Wales) was introduced by the Department of Trade and Industry, the Renewables Obligation (Scotland) was introduced by the Scottish Executives and the Northern Ireland Renewables Obligation was introduced by the Department of Enterprise Trade and Investment (DETINI). The Orders were subject to review in 2005/06 and new Orders came into effect on 1 April 2006. The relevant pieces of legislation are:
- The Renewables Obligation Order 2006 (Statutory Instrument (SI) 2006 No. 1004)
- The Renewables Obligation (Scotland) Order 2006 (SI 2006 No. 173), and
- The Renewables Obligation Order (Northern Ireland) 2006 (SI 2006 No. 56).
All pieces of legislation are published on the Office of Public Sector Information website [1].
[edit] What is Ofgem’s role?
The Orders detail Ofgem's powers and functions to administer the Renewables Obligation. These functions include:
- Accrediting generating stations as being capable of generating electricity from eligible renewable sources
- Issuing ROCs and revoking these as necessary
- Establishing and maintaining a Register of ROCs
- Monitoring compliance with the requirements of the Orders
- Calculating annually the buy-out price
- Receiving buy-out payments and redistributing the buy-out fund
- Receiving late payments and redistributing the late payment fund, and
- Publishing an annual report on the operation of and compliance with the requirements of the Orders.
Ofgem also administers the Northern Ireland Renewables Obligation (NIRO) on behalf of the Northern Ireland Authority for Energy Regulation (NIAER).
[edit] Types of energy eligible
The following sources of electricity are able to attract ROCs:
[edit] See also
[edit] External links
- October 9, 2006, ePolitix.com: Granting of renewables obligation certificates to be reformed
- August 9, 2006, Guardian Unlimited: Tickell, O: Treasury takes £150m out of renewable energy fund
[edit] References
- ^ Ofgem and ROC Ofgem: What is the Renewables Obligation
